In the Northern Pacific Railroad Company v. Peterson case of 1895, the U.S Supreme Court ruled in favor of Northern Pacific Railroad Company. The dispute arose when Peterson claimed ownership over a piece of land that was also claimed by the railroad company under an act passed by Congress in 1864 granting lands to aid in building a railway and telegraph line from Lake Superior to Puget Sound on the Pacific coast. The court held that once these lands were granted for such purposes, they could not be acquired through preemption or homestead laws unless explicitly stated otherwise by Congress. Therefore, even though Peterson had been occupying and improving this land since before it was surveyed (which usually gives one rights under preemption laws), he did not have legal claim to it because it had already been granted to the railroad company at that time.

The dissenting opinion in the case of Northern Pacific Railroad Company v. Peterson argued that the majority's decision was inconsistent with previous rulings and could potentially lead to unjust outcomes. The dissenting justices believed that the railroad company should not be allowed to claim land under a federal grant if it had already sold or leased that same land to another party, as this would constitute double-dipping. They also expressed concern about potential fraud, arguing that allowing such practices could enable companies to sell or lease lands they did not actually own, then later claim those lands under a federal grant after deceiving their customers. Furthermore, they contended that such actions were contrary to public policy and violated principles of fairness and justice.