In the 1909 case of Frellsen and Company v. Crandell, Register of the State Land Office of Louisiana, the U.S. Supreme Court was asked to determine whether a state could tax land that had been granted by Congress to a railroad company but not yet sold or developed. The court ruled in favor of Frellsen and Company, stating that until such time as the land is sold or otherwise disposed of by the railroad company, it remains part of their operating property and thus exempt from taxation under federal law. This decision upheld previous rulings which established that lands granted by Congress for specific purposes are immune from state taxation until they have served their intended purpose.

In the dissenting opinion for Frellsen and Company v. Crandell, it was argued that the majority's decision to deny Frellsen and Company their claim on a piece of land in Louisiana contradicted previous rulings by the court. The dissenting justices believed that under established precedent, any ambiguity regarding whether or not a tract of land had been reserved for public use should be resolved in favor of private parties who have made improvements to said land. They contended that this principle applied even if there were errors or irregularities in how those parties obtained their initial title to the property. In this case, they felt that because Frellsen and Company had operated a sawmill on the disputed parcel for many years without challenge from state authorities, they should be allowed to keep it despite questions about its original sale by Louisiana's state government.