In the 1903 case Houghton v. Payne, the United States Supreme Court ruled on a dispute involving land ownership in California. The plaintiff, Houghton, claimed that he had purchased a piece of property from Payne under an agreement which stated that if gold was discovered on the land within three years of purchase, then half of any profits would be given to Payne. Gold was indeed found and mined by Houghton during this period but he refused to share his earnings with Payne as per their agreement. The court held that such agreements were not against public policy or illegal and therefore should be upheld; hence it ordered Houghton to pay half of his mining profits to Payne.

In the dissenting opinion for Houghton v. Payne, Justice Harlan argued that the majority's decision was a departure from established principles of law and equity. He contended that it was unjust to allow an individual who had obtained property through fraudulent means to retain any profit derived from such property after its return to its rightful owner. In his view, this ruling would encourage fraud by allowing wrongdoers to benefit from their illegal actions without suffering any financial loss or penalty once discovered. Furthermore, he believed that the court should have considered whether Mr. Payne acted in good faith when purchasing Mrs.Houghton's land at a sheriff’s sale under an invalid judgment against her husband; if not, then he should be held accountable for all profits made during his possession of said land.