In the case of Middletown National Bank v. Toledo, Ann Arbor and Northern Michigan Railway Company (1904), the Supreme Court was asked to determine whether a railway company could be held liable for damages incurred by a bank due to an alleged breach of contract. The dispute arose when the railway company failed to honor its agreement with the bank regarding bonds that were supposed to be delivered as collateral security for loans made by the bank. The court ruled in favor of Middletown National Bank, finding that there had been a clear violation of contractual obligations on part of Toledo, Ann Arbor and Northern Michigan Railway Company which resulted in financial losses for the bank. This decision reinforced principles related to contracts law and affirmed that parties must adhere strictly to their agreed upon terms or face potential legal consequences.

In the dissenting opinion for Middletown National Bank v. Toledo, Ann Arbor and Northern Michigan Railway Company, it was argued that the majority's decision to uphold a lower court ruling in favor of the railway company was incorrect. The dissenting justices believed that there were significant errors made by the trial court which should have been corrected on appeal. They contended that these mistakes had unfairly prejudiced the bank's case against the railway company and thus warranted a new trial. Specifically, they disagreed with how certain evidence had been interpreted and presented to jury members during proceedings at trial level; this included key financial documents related to both parties' claims about their respective losses or gains from disputed transactions involving railroad bonds.