In the case of Erickson et al. v. United States and United States Spruce Production Corporation, 1923, the plaintiffs were shareholders in a corporation that had been dissolved by Congress during World War I to facilitate timber production for military aircraft construction. The corporation was later reorganized as the U.S. Spruce Production Corporation (USSPC). After its dissolution, USSPC's assets were transferred to the government without compensation to shareholders like Erickson et al., who then sued for damages alleging that this amounted to an unconstitutional taking of private property without just compensation under Fifth Amendment rights. The Supreme Court ruled against them stating that when they bought shares in a war-time corporation created by Congress with specific objectives related to national defense needs, they assumed risks associated with those objectives including potential dissolution or reorganization of said entity. It held that no constitutional violation occurred because investors knowingly accepted these conditions upon purchasing their shares.

In the dissenting opinion for Erickson et al. v. United States and United States Spruce Production Corporation, Justice McReynolds argued that the majority's decision was inconsistent with previous rulings of the Court regarding contract law. He contended that a contractor should not be held liable for unforeseen circumstances beyond their control which prevent them from fulfilling their contractual obligations, such as an act of God or government action. In this case, he believed that Erickson and his partners were unable to complete their logging contract due to unexpected governmental regulations related to World War I, which they could not have anticipated when entering into the agreement. Therefore, he felt it was unjust for them to bear financial responsibility for these unanticipated obstacles.