In the case of Panama Railroad Company v. Napier Shipping Company, 1896, the U.S. Supreme Court ruled in favor of the Panama Railroad Company. The dispute arose when a ship owned by Napier Shipping Co., while being towed through the Panama Canal by a tugboat operated by Panama Railroad Co., was damaged due to alleged negligence on part of the latter's employees. The court held that under maritime law and international treaties governing navigation through neutral waterways like the canal, liability for damages incurred during such operations rests with ship owners unless they can prove gross negligence or willful misconduct on part of those providing towing services - which Napier failed to do so convincingly in this instance.

The dissenting opinion in the Panama Railroad Company v. Napier Shipping Company case argued that the majority's decision to hold the railroad company liable for damages was incorrect. The dissent believed that it was not fair or reasonable to hold a carrier responsible for losses caused by unforeseen and uncontrollable circumstances, such as extreme weather conditions, which were beyond their control. They contended that carriers should only be held accountable when they fail to exercise due diligence or act negligently leading to damage of goods under their care. In this case, there was no evidence presented showing negligence on part of the railroad company; hence holding them liable would set an unfair precedent where carriers are forced into insuring against all possible risks regardless of whether they have any control over them or not.