In the case of Presidio County, Texas v. The Noel-Young Bond & Stock Company in 1908, the U.S Supreme Court dealt with a dispute over bonds issued by Presidio County to fund railway construction. The county had initially refused to pay interest on these bonds claiming that they were fraudulently issued and therefore invalid. However, the bondholders argued that they purchased them in good faith without knowledge of any alleged fraudulence. The court ruled in favor of Noel-Young Bond & Stock Company stating that innocent purchasers for value could not be penalized due to internal irregularities unknown at the time of purchase. This decision upheld legal principles protecting bona fide purchasers and reinforced their rights against issuers who later claim their securities are void due to internal misconduct or illegalities.

In the dissenting opinion for Presidio County, Texas v. The Noel-Young Bond & Stock Company, Justice Harlan argued that the majority's decision was inconsistent with previous rulings of the court and violated principles of equity. He contended that a county in Texas should not be allowed to repudiate its bonds on grounds of irregularities when it had received benefits from those bonds without objection. In his view, allowing such repudiation would undermine public confidence in municipal securities and could lead to financial instability. Furthermore, he believed that if there were indeed irregularities or fraud involved in issuing these bonds then it is up to courts of law rather than equity courts to decide upon them as they are matters pertaining more towards legality than fairness or justice.