In the case of Panama Mail Steamship Company v. Vargas in 1929, the Supreme Court ruled on a matter concerning maritime law and personal injury. The plaintiff, Mr. Vargas, was an employee of the defendant company when he suffered injuries due to alleged negligence by his employer while working aboard one of their vessels off the coast of Peru. He sought compensation under both Peruvian law and U.S federal statute (Jones Act). However, because he was injured outside U.S territorial waters and wasn't a citizen or resident at that time, it raised questions about jurisdictional applicability. The court held that although Mr.Vargas had since become a resident in California after his accident; this did not retroactively apply Jones Act protection for him as it only covers American citizens or residents at the time they were employed on board ships owned by American companies operating overseas. Furthermore, regarding Peruvian laws' application - which would have allowed higher damages than available under general maritime law -the court found no evidence indicating such foreign statutes should be applied here given its potential interference with uniformity in admiralty jurisprudence.

In the dissenting opinion for Panama Mail Steamship Company v. Vargas, Justice Stone argued that the majority's decision to deny compensation to a seaman injured while on shore leave was inconsistent with previous rulings and unjust in its application of maritime law. He contended that it was unreasonable and unfair to expect sailors, who are often unfamiliar with foreign ports where they dock, not to engage in any activities during their time off ship which might potentially lead them into danger. Furthermore, he pointed out that such an expectation would be contrary to the long-standing principle of maritime law which holds employers responsible for maintaining safe conditions for their employees at all times - both onboard and ashore. Therefore, according to Justice Stone’s view, Mr. Vargas should have been entitled to compensation from his employer because his injury occurred within the scope of his employment as defined by these principles.