In the 1892 case of New York, Lake Erie & Western Railroad Company v. Estill, the U.S Supreme Court ruled in favor of the railroad company. The dispute arose when John B. Estill claimed that he was entitled to a certain amount as dividends from his shares in the railroad company which were not paid due to an alleged misinterpretation by the directors regarding their financial status and ability to pay dividends at that time. However, it was found that there had been no fraudulent conduct or intentional wrongdoing on part of the directors; they had acted under honest belief and understanding about their inability to declare dividends without violating state laws prohibiting payments if it would render them insolvent or unable to meet outstanding obligations. Therefore, even though they may have misunderstood these laws leading them not declaring any dividend for shareholders like Mr.Estill during those years, this did not constitute a breach of trust or duty warranting compensation claims against them.

In the dissenting opinion for New York, Lake Erie & Western Railroad Company v. Estill, Justice Brewer argued that the majority's decision was inconsistent with previous rulings of the court and violated principles of fairness. He contended that a railroad company should not be held liable for damages caused by an accident if it had taken all reasonable precautions to prevent such accidents from occurring. In this case, he believed that there was no negligence on part of the railroad company as they had followed standard safety procedures in operating their trains and maintaining their tracks. Therefore, according to him, holding them responsible for damages would amount to punishing them without any fault or negligence on their part which is against natural justice and equity.