In the Pampanga Sugar Mills v. Trinidad case of 1928, the U.S Supreme Court ruled in favor of Trinidad. The dispute arose when Pampanga Sugar Mills (PASUMIL), a Philippine corporation, sued Pedro Guevara and Mariano Cuaderno for recovery of sugar central properties that were sold to them by Governor General Leonard Wood on behalf of the government-owned National Coal Company (NCC). PASUMIL claimed that NCC was not authorized to sell these properties as they were public utilities. However, Justice Harlan Fiske Stone argued that under Philippine law at the time, sugar centrals did not fall within their definition of public utility and thus could be legally sold by NCC without legislative approval or franchise grant from any authority. Therefore, he concluded that there was no legal basis for PASUMIL's claim against Guevara and Cuaderno.

In the dissenting opinion for Pampanga Sugar Mills v. Trinidad, Justice Stone argued that the Philippine legislature did not have authority to pass a law allowing seizure and sale of sugar stocks without providing adequate notice or opportunity for hearing. He contended that this violated due process rights under U.S. law, which applied in the Philippines as it was then a U.S. territory. The majority's decision upheld such seizures on grounds of public necessity during an economic crisis; however, Justice Stone disagreed with their interpretation of what constituted "public use" and "just compensation". He believed that these terms should be interpreted according to American constitutional standards rather than local conditions or legislative determinations in the Philippines.