In the case of St. Louis and San Francisco Railway Company v. Mathews in 1896, the U.S Supreme Court ruled on a dispute involving land rights between a railway company and an individual named Mathews. The railway company had been granted certain lands by Congress to aid in its construction but later discovered that some of these lands were already occupied by Mathews under what he claimed was a valid homestead entry. The court held that although there may have been irregularities in how the land grant was administered, it did not invalidate the grant itself or give rise to any legal claims for those who subsequently settled on the land believing they had valid title to it. Therefore, even though Mathews believed he owned his plot through homesteading laws, because this conflicted with prior congressional grants given to railroads for public purposes such as building transportation infrastructure, his claim was invalid.

In the dissenting opinion for St. Louis and San Francisco Railway Company v. Mathews, it was argued that the court majority had erred in its interpretation of liability under common law principles. The dissent maintained that a railway company should not be held responsible for damages to adjacent property caused by sparks from passing trains unless negligence can be proven on part of the company. It was contended that such incidents are an inevitable consequence of operating steam locomotives, which were essential to public transportation at the time, and therefore do not constitute negligence per se. Furthermore, they believed imposing strict liability would unfairly burden railroad companies with costs beyond their control and could potentially hinder economic progress by discouraging investment in rail infrastructure due to fear of excessive litigation expenses.