In the 1895 case of Dibble v. Bellingham Bay Land Company, the U.S Supreme Court ruled in favor of the defendant, Bellingham Bay Land Company. The plaintiff, Dibble had purchased land from a company that did not own it at the time but acquired title later on. When he discovered this fact years after his purchase and after making significant improvements to the property, he sued for fraud and misrepresentation seeking compensation for his investments into improving lands which were sold under false pretenses. The court held that even though there was deception involved in selling him land before obtaining its title, since they eventually obtained legal ownership before transferring it to him - no harm was done as far as property rights are concerned. Therefore, Dibble's claim for reimbursement of improvement costs was denied because despite initial deceit by seller regarding their ownership status during sale negotiations; ultimately when actual transfer took place they were rightful owners so buyer received what he paid for i.e., valid title over said lands.

The dissenting opinion in Dibble v. Bellingham Bay Land Company argued that the majority's decision was inconsistent with previous rulings and failed to adequately consider the rights of settlers under preemption laws. The dissent emphasized that these laws were designed to protect settlers' claims on public lands, even if they did not have formal legal title. In this case, Dibble had made significant improvements on the land before Bellingham Bay Land Company purchased it from a railroad company which received it from Congress. Despite having no knowledge of any adverse claim at time of purchase, the court ruled in favor of Bellingham Bay Land Company based solely on their legal title acquired later than Dibble’s settlement but earlier than his application for preemption right registration. This ruling disregarded established principles protecting preemptive rights and unjustly deprived settlers like Mr.Dibble who acted in good faith and invested labor and resources into improving their claimed land.