The Santa Fe, Prescott & Phoenix Railway Company v. Grant Brothers Construction Company case in 1912 revolved around a dispute over payment for construction work done on the railway line. The Grant Brothers Construction Company had been contracted by the railway company to construct part of their rail line and were not fully compensated for their services. They sued to recover the remaining balance owed to them, which was approximately $44,000 plus interest. The Supreme Court ruled in favor of the construction company stating that they were entitled to be paid under terms of an agreement made with a receiver appointed by a federal court during insolvency proceedings involving the railroad company prior its reorganization as Santa Fe, Prescott & Phoenix Railway Co., even though this new entity did not formally assume liability for such debts after it acquired assets from receivership estate.

In the dissenting opinion for Santa Fe, Prescott & Phoenix Railway Company v. Grant Brothers Construction Company, it was argued that the majority's decision failed to properly interpret and apply contract law principles. The dissenting justices believed that the construction company had a valid claim against the railway company based on their contractual agreement. They contended that when an entity agrees to perform work under a contract with knowledge of its terms and conditions, they are bound by those stipulations even if they later find them unfavorable or burdensome. Therefore, according to this view, since Grant Brothers agreed to construct railroad tracks for Santa Fe at a certain price but incurred additional costs due to unforeseen circumstances (rocky terrain), these extra expenses should be borne by Grant Brothers as per their initial agreement rather than being compensated by Santa Fe.