In the case of Louisville Trust Company v. Louisville, New Albany and Chicago Railway Company (1898), the Supreme Court ruled in favor of the railway company. The dispute arose when a trustee for bondholders sought to foreclose on a mortgage after default by the railroad company. However, there was an issue with how much money should be paid out from foreclosure sale proceeds because there were two mortgages involved - one senior and one junior. The court held that both mortgages had been merged into one through consolidation, so all bondholders should share equally in any distribution regardless of which mortgage they originally held bonds under. This decision effectively prioritized equitable treatment over strict contractual rights.

In the dissenting opinion for Louisville Trust Company v. Louisville, New Albany and Chicago Railway Company, Justice Harlan argued that the majority's decision was a departure from established principles of equity jurisprudence. He contended that it was not within the power of a court to modify or alter an agreement between parties unless there were grounds such as fraud, mistake or accident which would justify such intervention. In this case, he saw no evidence of any circumstances warranting judicial interference with the contractual rights and obligations agreed upon by both parties involved in this case - The Louisville Trust Company and The Louisville, New Albany & Chicago Railway Co. Furthermore, he expressed concern about setting a precedent where courts could arbitrarily change contracts without clear justification under law.