In the Gulf and Ship Island Railroad Company v. Hewes case of 1901, the U.S. Supreme Court ruled in favor of Gulf and Ship Island Railroad Company, reversing a decision by the Mississippi Supreme Court. The dispute centered on whether or not certain lands granted to Mississippi by Congress under an Act passed in September 1850 were included within a grant made by that state to the railroad company in February 1856 for construction purposes. The plaintiff, Hewes, claimed ownership of these lands through subsequent conveyances from other parties who had received them from Mississippi after it had allegedly forfeited its rights due to non-completion of railroads as required under federal law. However, Justice Peckham delivered the opinion that there was no forfeiture clause present in either Congressional act granting land to states for railroad construction nor any evidence suggesting such intent; thus, he concluded that Mississippi's right remained intact until voluntarily relinquished or legally extinguished via some process recognized at law - neither condition being met here.

In the dissenting opinion for Gulf and Ship Island Railroad Company v. Hewes, Justice Harlan disagreed with the majority's interpretation of Mississippi state law regarding land grants to railroads. He argued that the railroad company did not have a right to sell lands granted by Congress before they had been earned through construction milestones, as stipulated in their charter. The justice believed this was an attempt by the railroad company to profit from unearned lands at public expense. Furthermore, he contended that even if such sales were allowed under state law, they would be invalid because federal law takes precedence over conflicting state laws when it comes to disposal of public lands. In his view, allowing these sales would undermine Congressional intent behind granting these lands - which was promoting railway development rather than enabling speculative land ventures.