In the case of Davis, Director General v. John L. Roper Lumber Company (1925), the U.S Supreme Court ruled in favor of the defendant, John L. Roper Lumber Company, affirming a lower court's decision that allowed them to recover damages for breach of contract by Davis as Director General of Railroads during World War I. The plaintiff had appealed against this decision arguing that he was not personally liable and his actions were under governmental authority which should protect him from such claims. However, the court held that even though he acted on behalf of government control over railroads during wartime emergency conditions, it did not exempt him or the government from liability arising out contractual obligations with private entities like Roper Lumber Co., thus upholding principles of fairness and justice in business transactions irrespective of extraordinary circumstances.

In the dissenting opinion for Davis, Director General v. John L. Roper Lumber Company, Justice McReynolds disagreed with the majority's decision to uphold a lower court ruling that allowed a lumber company to recover damages from a railroad due to delayed delivery of goods during World War I. He argued that this interpretation was inconsistent with federal legislation enacted during wartime which aimed at maintaining efficient transportation systems and preventing undue burdens on railroads in service of national defense efforts. He contended that these laws were designed specifically to protect railroads from such claims during periods of extraordinary demand and stress caused by war conditions, thus he believed it was wrong for courts to allow companies like Roper Lumber Co., who had not suffered any physical loss or damage but merely delay in receiving their shipments, to claim compensation under these circumstances.