In the Eastern Building & Loan Association v. Welling case of 1900, the U.S Supreme Court ruled in favor of Eastern Building & Loan Association. The dispute arose when Welling defaulted on a loan from Eastern and subsequently claimed that he was not liable for repayment because the company was operating illegally under New York law where it had no license to do business. However, since both parties were residents of South Carolina at the time of contract formation and execution, South Carolina laws applied according to principles of interstate comity - respect between states regarding each other's legal systems. Therefore, as per South Carolina law which allowed such operations without requiring a specific license or charter for out-of-state companies like Eastern Building & Loan Association, their agreement with Welling was deemed valid and enforceable by this court ruling.

In the dissenting opinion for Eastern Building & Loan Association v. Welling, Justice Harlan disagreed with the majority's decision to uphold a contract that he believed was inherently unjust and unfair. He argued that the contract in question allowed an association to arbitrarily determine its own profits without any oversight or regulation, which could lead to abuse of power and exploitation of members who had little say in these decisions. Furthermore, he contended that such contracts were contrary to public policy because they undermined fair competition by allowing associations to set their own terms without regard for market conditions or fairness towards consumers. In his view, courts should not enforce contracts where one party has undue influence over another or where there is a significant imbalance of power between parties.