In the case of Treat, Treasurer of Coconino County, Arizona v. Grand Canyon Railway Company in 1911, the Supreme Court ruled on a dispute regarding taxation. The Grand Canyon Railway Company had been assessed for taxes by Coconino County based on its property value which included franchises granted by Congress and territorial legislatures. The railway company argued that these franchises were not taxable under Arizona law because they were intangible assets and therefore should be excluded from their property's valuation for tax purposes. The Supreme Court disagreed with this argument stating that while it was true that franchises are generally considered intangible assets, when used in connection with tangible property to generate income (as was the case here), they become part of the overall value of said tangible property and thus can be taxed accordingly. Therefore, according to this ruling, even though a franchise is an intangible asset per se; if it contributes to increasing the worth or profitability of physical properties owned by a corporation or business entity then such franchise becomes taxable as well.

In the dissenting opinion for Treat, Treasurer of Coconino County, Arizona v. Grand Canyon Railway Company (1911), Justice Holmes argued that the majority's decision was based on a misinterpretation of both state and federal law. He contended that under Arizona law at the time, taxes were not considered personal debt but rather an obligation tied to property ownership. Therefore, he reasoned that when Grand Canyon Railway Company purchased land from another company already in arrears on its tax payments, it also assumed responsibility for those unpaid taxes as part of its new property ownership obligations. Furthermore, Holmes disagreed with the majority's interpretation of federal legislation granting lands to railroads; he believed this legislation did not exempt these companies from local taxation responsibilities or protect them from inheriting past due taxes associated with their newly acquired properties.