In the 1894 case of McKnight v. James, the United States Supreme Court addressed a dispute over land ownership in Arkansas. The plaintiff, McKnight, claimed that he had purchased and paid taxes on certain lands for several years under color of title from tax sales made by the state. However, these lands were part of an indemnity selection made by a railroad company to compensate for losses incurred due to federal land grants not being available as expected. The defendant, James (the receiver appointed by a lower court), argued that this selection was invalid because it exceeded what was allowed under law and thus could not be recognized as valid title transferable through tax sale. The Supreme Court ruled in favor of James stating that while there may have been irregularities or errors in how much land was selected for compensation purposes by the railroad company; such issues did not invalidate all selections but only those specifically exceeding legal limits which must be determined individually rather than collectively across all selections made statewide. Therefore, unless specific parcels sold at tax sale can be proven to exceed these limits they are considered legally transferred titles despite any broader disputes about total amounts selected statewide - effectively upholding McKnight's claim on his purchased lands unless further individual parcel-level challenges were brought forward proving otherwise.

The dissenting opinion in the case of McKnight v. James argued that the majority's decision was inconsistent with previous rulings and interpretations of the law. The dissenting justices believed that a contract for labor or services, which is what this case revolved around, should be considered valid unless there is clear evidence to suggest otherwise. They also disagreed with the majority's interpretation of "fraud," arguing that it had been applied too broadly in this instance. Furthermore, they contended that if every misrepresentation could be classified as fraud then almost any breach of contract could potentially lead to criminal charges - an outcome they saw as problematic and contrary to established legal principles.