In the 1890 case of Selma, Rome and Dalton Railroad Company v. United States, the Supreme Court ruled on a dispute involving railroad land grants. The Selma, Rome and Dalton Railroad Company had been granted lands by Congress to aid in its construction but later went bankrupt before completing its line. As a result, these lands were sold at auction to satisfy creditors' claims against the company. However, when another railway company purchased some of this land from an individual who bought it at auction, they found themselves facing legal action from the U.S government which claimed that any unsold or unpatented portions should have reverted back to them after bankruptcy proceedings concluded. The court held that under federal law governing such grants (the Act of March 3rd 1871), if a railroad failed to complete its line within a specified time period then all rights would indeed revert back to the government - including those relating not just directly to track construction but also associated property interests like station buildings etc., regardless whether they'd already been sold off or not during bankruptcy proceedings. This decision clarified how federal laws applied regarding reversionary interest in cases where railroads receiving public land grants subsequently go bankrupt before fulfilling their obligations.

In the dissenting opinion for Selma, Rome and Dalton Railroad Company v. United States (1890), Justice Lamar disagreed with the majority's decision that a railroad company could be held liable under federal law for damages caused by its negligence during wartime operations. He argued that such liability was inconsistent with the principle of sovereign immunity, which generally protects governments from being sued without their consent. Furthermore, he contended that Congress did not intend to waive this immunity when it passed legislation authorizing military use of railroads during war. Instead, he believed this legislation merely allowed the government to take control of railroads in emergency situations and did not create any new liabilities or obligations on behalf of railroad companies towards private individuals who suffered losses as a result thereof.