The Valencia case in 1896 involved a dispute over the seizure of a vessel during the Spanish-American War. The U.S. government seized "The Valencia," a Spanish ship, under suspicion that it was being used to transport enemy goods. The owners of the cargo on board filed suit against the United States, arguing that their property had been unlawfully taken since they were not enemies and their goods were not contraband. They sought compensation for their losses. In its decision, the Supreme Court ruled in favor of the United States government stating that during times of war, nations have broad powers to seize vessels suspected of aiding an enemy nation even if those suspicions later prove unfounded or incorrect. This ruling established precedent regarding wartime seizures and affirmed governmental authority during conflicts.

In the dissenting opinion for The Valencia case, it was argued that the majority's decision to uphold a lower court ruling in favor of an insurance company contradicted established legal principles. The dissenting justices believed that the ship had been seaworthy when it left port and therefore, its subsequent sinking should not have invalidated its insurance coverage. They contended that if a vessel is deemed fit for service at departure but later encounters conditions which render it unseaworthy, this does not absolve insurers from their obligations under maritime law. Furthermore, they disagreed with the majority's interpretation of "perils of the sea," arguing these should include any dangers inherent in marine navigation rather than just extraordinary or unforeseeable events. Thus, they felt that by denying compensation to those who lost property on board The Valencia due to such perils was unjust and against longstanding precedents.