In the case of Stutsman County v. Wallace (1891), the U.S Supreme Court ruled on a dispute involving taxation and property rights. The county in North Dakota had levied taxes against railroad land, which was granted to the Northern Pacific Railroad Company by Congress under an 1864 Act. However, due to non-payment of these taxes, Stutsman County sold this land at public auction where it was bought by Wallace who later sought clear title from the court. The Supreme Court held that until patents for such lands were issued and recorded, they remained part of public domain and thus not subject to state or local taxation as per federal law - even if they were within defined limits of a railroad grant made by Congress. Therefore, any tax sale conducted prior to patent issuance would be invalid since counties cannot tax properties still owned federally i.e., in public domain.

In the dissenting opinion for Stutsman County v. Wallace, Justice Lamar argued that the Supreme Court should not have jurisdiction over this case as it was a matter of state law rather than federal law. He contended that there were no constitutional questions at stake and therefore, it did not fall under their purview to decide on such matters. Furthermore, he disagreed with the majority's interpretation of North Dakota's laws regarding taxation and property rights. According to him, these laws allowed counties to tax railroad companies based on their total assets within the county which included both real estate and personal property like rolling stock (trains). Therefore, in his view, Stutsman County had acted within its legal rights when taxing Northern Pacific Railroad Company’s properties located in said county.