In the Northern Pacific Railway Company v. Ely case of 1904, the U.S Supreme Court ruled in favor of Northern Pacific Railway Company. The dispute arose when Ely claimed ownership over a piece of land that was also claimed by the railway company under an act passed by Congress granting lands to aid in building railroads and telegraphs. The court held that even though there were some irregularities with how Northern Pacific obtained its patents for the land from government officials, these did not invalidate their claim because they had fulfilled all necessary conditions set out in law before obtaining them. Furthermore, it was found that Ely's claim relied on a patent issued after those given to Northern Pacific which meant his claims were subordinate to theirs according to established principles governing such disputes.

In the dissenting opinion for Northern Pacific Railway Company v. Ely, it was argued that the majority's decision to uphold a lower court ruling in favor of Ely was incorrect. The dissenting justices believed that the railway company had not violated its contract with Ely by charging him higher rates than those agreed upon because these rates were still within reasonable limits set by law. They also disagreed with the interpretation of "reasonable and just" as meaning only what is stipulated in a contract, arguing instead that this term should be understood more broadly to include any rate deemed fair under prevailing circumstances. Furthermore, they contended that if every breach of contract could lead to an injunction against a railroad company, it would disrupt commerce and public convenience significantly.