This case was heard by the United States Supreme Court in 1869. It involved a dispute between Jacob D. Cox, the Secretary of the Interior, and William McGarrahan, a private citizen. McGarrahan had purchased a tract of land in California from the United States government in 1853. The land was located in an area that had been ceded to the United States by Mexico in 1848. McGarrahan claimed that he had been granted a patent for the land, but the patent had never been issued. The Supreme Court ruled in favor of McGarrahan, finding that he had a valid claim to the land. The Court held that the United States had a duty to issue a patent to McGarrahan, as he had fulfilled all the requirements for obtaining the land. The Court also held that the United States was not entitled to compensation for the land, as it had not been legally acquired from Mexico. This ruling established the principle that the United States must honor its contracts with private citizens, even if the contracts are not legally binding.

In the case of Jacob D. Cox, Secretary of the Interior v. The United States ex rel William McGarrahan, the Supreme Court was asked to decide whether a private individual could acquire title to land in California that had been previously granted by Mexico before it became part of the United States. The majority opinion held that such an acquisition was not possible because Congress had exclusive power over public lands and no private individual could claim them without Congressional authorization. However, Justice Field dissented from this decision on two grounds: firstly he argued that under Mexican law at the time when California belonged to Mexico, individuals were able to acquire title through possession; secondly he argued that even if Congress did have exclusive control over public lands they should still recognize titles acquired prior to their assumption of power as valid claims against those lands. He concluded by stating his belief that “the justice and policy” required recognition for these pre-existing titles regardless of who held legal authority over them at any given time.