In the Farrugia v. Philadelphia & Reading Railway Company case of 1913, the plaintiff, Mr. Farrugia, was a passenger on one of the defendant's trains when he was injured due to an accident caused by negligence on part of the railway company's employees. The Supreme Court ruled in favor of Mr. Farrugia and held that under Pennsylvania law (where the incident occurred), a common carrier like a railroad is liable for injuries sustained by passengers due to its employees' negligence while performing their duties even if there is no proof or allegation that it had been negligent in hiring or retaining those employees. This decision upheld previous rulings which established that carriers are responsible for ensuring safety during transit and can be held accountable for any harm resulting from employee negligence.

The dissenting opinion in the case of Farrugia v. Philadelphia & Reading Railway Company argued that the court erred in its decision to dismiss the plaintiff's complaint on jurisdictional grounds. The dissent believed that there was sufficient evidence to establish diversity jurisdiction, as required by Article III, Section 2 of the U.S. Constitution and federal statute 28 U.S.C §1332(a). This section grants federal courts original jurisdiction over civil actions where the matter in controversy exceeds $75,000 and is between citizens of different states or citizens of a state and foreign states or citizens thereof. In this case, it was contended that Farrugia was an alien while Philadelphia & Reading Railway Company were Pennsylvania corporations thus satisfying diversity requirement for subject-matter jurisdiction under Federal law which should have allowed his claim to be heard at a Federal level rather than being dismissed outright.