In the case of Southern Pacific Company v. Schuyler, the U.S Supreme Court ruled in favor of Southern Pacific Company. The dispute arose when a shipment was damaged during transit due to negligence by employees of both companies involved - Southern Pacific and Central Railroad. However, under their contract, Central Railroad had agreed to assume responsibility for any damages occurring during transit regardless of which company's employees were at fault. When Schuyler sued Southern Pacific for compensation, they argued that liability should fall on Central Railroad as per their agreement. The court held that while common law would typically distribute liability proportionally between negligent parties (both railroads), contractual agreements could override this principle if clearly stated. Therefore, since the contract explicitly placed full responsibility on Central Railroad irrespective of who caused damage or loss in transit; it was legally binding and enforceable. This ruling reinforced two key legal principles: firstly, contracts can supersede common law rules where specified; secondly, courts will uphold these contracts even if they result in an uneven distribution of liabilities or benefits among parties.

In the dissenting opinion for Southern Pacific Company v. Schuyler, Justice Holmes disagreed with the majority's decision to hold Southern Pacific liable for damages caused by a fire that started from sparks emitted by one of its locomotives. He argued that there was no evidence proving negligence on part of the railway company and hence it should not be held responsible for an accident which could have occurred even under careful management. According to him, such accidents are inherent risks associated with running trains and cannot always be prevented despite taking all reasonable precautions. Therefore, he believed that holding companies liable in such cases would unfairly burden them with costs they can't control or predict accurately.