In the case of St. Louis and San Francisco Railroad Company v. Shepherd in 1915, the U.S Supreme Court ruled on a dispute involving land rights between a railroad company and an individual named Shepherd. The railroad company claimed that it had acquired certain lands under an Act of Congress from March 3, 1871, which granted them to railroads for construction purposes. However, Shepherd argued that he held valid title to these lands through homestead laws before they were given to the railroad by Congress. The court found in favor of Mr. Shepherd stating that his claim was superior because he had settled on the land prior to its grant by Congress to the railway company; hence his rights were protected under existing law at that time - even though no patent (official government document recognizing property ownership) had been issued yet when Congress made its grant. This ruling affirmed two important principles: first, grants made by congress do not interfere with pre-existing claims or settlements unless explicitly stated otherwise; secondly, individuals who settle public lands according their state's laws can acquire vested interests in those properties even before receiving official patents.

In the dissenting opinion for St. Louis and San Francisco Railroad Company v. Shepherd, Justice Holmes disagreed with the majority's decision to hold the railroad company 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 or any violation of statutory duty which could have led to such an accident. According to him, it is unreasonable and unjustifiable to impose liability without fault in this case as it would mean holding railroads accountable for all fires occurring near their tracks irrespective of whether they were at fault or not. This, he believed, would set a dangerous precedent where companies are held responsible even when they exercise due care in their operations.