The U.S. Supreme Court case St. Paul, Minneapolis & Manitoba Railway Company v. Donohue in 1907 revolved around a dispute over land ownership and the rights of railway companies to acquire property for their operations under eminent domain laws. The plaintiff, Donohue, claimed that he had purchased a piece of land from the defendant company but was later denied possession when the company decided it needed the land for its railroad tracks expansion project. He sued for damages and won at both district court level and on appeal with Minnesota's supreme court ruling in his favor. However, upon reaching the U.S Supreme Court, this decision was overturned based on federal law which allowed railroads to appropriate private lands if they were necessary for construction or operation purposes - even after sale agreements have been made - as long as just compensation is provided to owners affected by such actions. Therefore, while acknowledging that state courts may interpret local laws differently regarding these matters (as happened here), it held that federal law ultimately governs interstate commerce issues like this one; thus siding with railway companies' right to exercise eminent domain powers over individual property rights when required.

In the dissenting opinion for the case of St. Paul, Minneapolis & Manitoba Railway Company v. Donohue, it was argued that the court majority erred in its interpretation and application of legal principles related to property rights and damages. The dissent emphasized that a landowner should be entitled to compensation if their property value is diminished due to railway construction or operation, even if no physical invasion of their property occurred. It was contended that nuisance caused by noise, vibration and smoke from passing trains could significantly reduce a property's market value and thus constitute 'taking' under eminent domain law which requires just compensation. This view challenged the majority's stance which held only direct physical intrusion as grounds for claiming damages against railroad companies.