In the case of I.M. Darnell & Son Company v. City of Memphis, 1907, the U.S Supreme Court was asked to decide on a dispute between a private company and a city government over property rights. The I.M. Darnell & Son Company had leased land from the City of Memphis with an agreement that they could remove any improvements made if they chose not to renew their lease at its expiration date. When this time came, however, the city refused to allow them to do so and claimed ownership over these improvements themselves. The court ruled in favor of I.M Darnell & Son Company stating that under common law principles regarding leases for years (a type of leasehold estate), lessees have right to remove fixtures attached during term unless there is express provision against it or removal would cause substantial injury to premises beyond ordinary wear and tear; thus affirming that tenants can take away anything added as long as it does not damage what was originally there when their tenancy ends.

In the dissenting opinion for I.M. Darnell & Son Company v. City of Memphis, it was argued that the city's actions were not in violation of any constitutional rights and therefore should not be subject to federal jurisdiction. The justice contended that while there may have been a breach of contract on part of the city, this did not equate to an infringement upon civil rights or liberties as defined by federal law. It was further asserted that if such cases were allowed under federal jurisdiction, it would open up floodgates for all manner of contractual disputes to be brought before federal courts unnecessarily. This could potentially undermine state authority and disrupt the balance between state and national powers established by the Constitution.