In the case of Philippine Sugar Estates Development Company, Limited v. Government of the Philippine Island (1917), the U.S Supreme Court ruled in favor of the government. The dispute arose when a sugar company claimed that it was entitled to compensation for land taken by eminent domain by the government for public use. The court held that under Section 5 of Act No. 1120, which provided for expropriation proceedings, no provision existed requiring payment before taking possession and control over lands needed for public purposes such as roads or parks. Furthermore, it stated that any delay in payment did not constitute deprivation without due process since there were adequate provisions ensuring eventual compensation to property owners affected by expropriation actions.

In the dissenting opinion for the case of Philippine Sugar Estates Development Company, Limited v. Government of the Philippine Island, Justice Holmes disagreed with the majority's decision that a contract between a private company and government was not enforceable due to lack of consideration. He argued that there was indeed sufficient consideration in this case as both parties had obligations under their agreement: The sugar company agreed to construct public works while the government promised certain tax exemptions. Holmes contended that these mutual promises constituted valid contractual considerations. Furthermore, he criticized his colleagues' reliance on American jurisprudence when interpreting contracts involving foreign governments since it could lead to unjust results due to cultural and legal differences between countries.