In the 1890 U.S. Supreme Court case Joy v. St. Louis, the court examined a dispute over land ownership in St. Louis, Missouri between two parties: James S. Thomas and Charles W. Joy (plaintiff). The city of St.Louis had granted Thomas permission to build a wharf on public land along the Mississippi River; however, this grant was later declared void by state legislation due to lack of authority from Congress for such grants at that time period. Joy purchased part of this disputed property from another party who claimed title through an independent chain dating back prior to Thomas's claim and sued for possession against those occupying under leases given by Thomas or his grantees. The Supreme Court ruled in favor of Joy stating that when he bought the property he acquired all rights attached thereto including any improvements made thereon regardless if they were authorized or not by government authorities at their inception. This decision upheld principles regarding real estate transactions where good faith purchasers are protected even if previous transfers may have been flawed legally as long as no fraud is involved and purchaser has no knowledge about these flaws while buying it.

In the dissenting opinion for Joy v. St. Louis, Justice Lamar disagreed with the majority's decision that a city could not be held liable for damages caused by changes in water flow due to public works projects. He argued that if a private individual would be liable under similar circumstances, then so should a municipality acting in its corporate capacity. According to him, it was unjust and against common law principles to allow municipalities immunity from liability when their actions cause harm or damage to private property owners without compensation. Furthermore, he contended that such an exemption contradicted the Fifth Amendment of the Constitution which states no person shall "be deprived of life, liberty or property without due process of law; nor shall private property be taken for public use without just compensation." Therefore, he believed cities should compensate individuals whose properties are damaged as a result of municipal activities related to public improvements.