In the 1903 case of Hodges v. Colcord, the United States Supreme Court addressed a dispute over land ownership in Oklahoma Territory. The plaintiff, Hodges, claimed that he had purchased a tract of land from an individual who had received it as part of an allotment under federal law providing for distribution of tribal lands to individual Native Americans. However, this sale was made before Congress passed legislation allowing such sales and therefore violated existing laws at the time which prohibited alienation (transfer) of these lands without government approval. The defendant, Colcord - who later acquired title to the same property through another chain - argued that since initial sale by original allotee was illegal due to non-compliance with statutory restrictions on alienation imposed by Congress on Indian allotments; his subsequent acquisition held superior claim. The Supreme Court ruled in favor of Colcord stating that any transfer or conveyance done contrary to statutory prohibition is void and cannot be validated retroactively even if statute changes afterwards permitting such transfers. Hence despite change in law after transaction took place between original parties; it did not validate their earlier illegal transaction.

In the dissenting opinion for Hodges v. Colcord, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the court and violated principles of federalism. He contended that it was not within a state's power to regulate interstate commerce, which he believed included insurance contracts made out-of-state but enforced in-state. Furthermore, he asserted that if states were allowed to tax such contracts as they pleased without any restrictions from Congress or the Constitution, it would lead to chaos and confusion in business operations across different states. Therefore, according to him, this case should have been decided based on precedents set by Paul v Virginia (1869) and New York Life Insurance Co v Cravens (1897), both of which held that insurance is not commerce and thus cannot be regulated by Congress under its Commerce Clause powers.