The Tayabas Land Company v. Manila Railroad Company case in 1918 revolved around a dispute over the payment for land that was expropriated by the Manila Railroad Company for railway construction. The Tayabas Land Co., as assignee and successor of Velasquez et al., claimed that they were not adequately compensated for their property, which was taken under eminent domain laws. They argued that the value of their land had significantly increased due to improvements made on adjacent properties, and thus deserved higher compensation than what was initially paid. However, the Supreme Court ruled against them stating that only actual physical improvements made directly on a specific piece of property can be considered when determining its fair market value during an eminent domain proceeding - potential or speculative increases in value cannot be included.

In the dissenting opinion for Tayabas Land Company v. Manila Railroad Company, it was argued that the majority's decision to uphold a lower court ruling in favor of Manila Railroad Company was incorrect. The dissenting justices believed that there were significant errors made by the trial court which should have led to a reversal of its judgment. They contended that Tayabas Land Company had indeed fulfilled its contractual obligations and therefore should not be held liable for damages incurred by Manila Railroad Co due to delays in construction work on land owned by Velasquez et al., who later assigned their rights and interests over said property to Tayabas Land Co. Furthermore, they disagreed with the majority's interpretation of certain provisions within this contract, arguing instead for an understanding more favorable towards Tayabas' position.