In the case of Shelby County v. Union and Planters' Bank in 1895, the U.S. Supreme Court ruled on a dispute over bonds issued by Shelby County, Tennessee during Reconstruction after the Civil War. The county had issued these bonds to finance railroad construction but later refused to pay them off, arguing that they were unconstitutional under state law because voters did not approve them directly. However, bondholders argued that this violated their rights under the Contracts Clause of the U.S Constitution which prohibits states from passing laws "impairing the obligation of contracts". The Supreme Court sided with bondholders and held that once a contract is made it becomes absolute and unchangeable; therefore any subsequent legislation cannot alter its terms or conditions without consent from both parties involved in said contract. This decision reinforced protection for creditors against legislative interference with contractual obligations.

The dissenting opinion in the case of Shelby County v. Union and Planters' Bank, 1895, argued that the majority's decision was a misinterpretation of both state law and constitutional principles. The dissent contended that the county had no legal obligation to pay off bonds issued by a railroad company since it was not explicitly stated in their charter from the state legislature. They also disagreed with the majority's view on taxation without representation, arguing that this principle does not apply when taxpayers have willingly taken on debt obligations through democratic processes such as voting or accepting benefits from public projects funded by these debts. Furthermore, they believed that allowing creditors to sue counties directly for repayment could potentially bankrupt local governments and undermine their ability to provide essential services for residents.