In the Northern Pacific Railroad Company v. Colburn case of 1896, the U.S Supreme Court ruled in favor of Northern Pacific Railroad Company. The dispute arose when Colburn claimed ownership rights to a piece of land that was also claimed by the railroad company under an act passed by Congress granting lands for railway construction purposes. The court held that since the disputed tract was part of odd-numbered sections within ten miles on each side of said road and fell within primary limits defined by Congress, it belonged to Northern Pacific Railroad Company as per their grant from Congress. Furthermore, at no point did any legislation reserve this specific parcel for homesteading or other uses before its allocation to the railroad company's charter. Therefore, Colburn’s claim based on subsequent settlement laws could not supersede those granted earlier to the railroad company.

The dissenting opinion in the case of Northern Pacific Railroad Company v. Colburn argued that the majority's decision was incorrect because it failed to consider the intent behind Congress' granting of land to railroad companies. The dissent believed that this grant was not meant to be an absolute gift, but rather a means for facilitating transportation and settlement across vast western territories. Therefore, any lands deemed unnecessary for these purposes should revert back to public domain or be available for purchase by settlers at government price. They contended that allowing railroads to sell these surplus lands at market prices would unjustly enrich them beyond what Congress intended while depriving settlers of affordable access to land. This interpretation, they asserted, better aligned with both legal precedent and Congressional intent than did the majority’s ruling which allowed railroads unrestricted control over granted lands.