In the case of Turnpike Company v. The State, the Supreme Court ruled that a state legislature has no authority to pass laws which interfere with private contracts between individuals or corporations and third parties. This ruling was based on the fact that such interference would be in violation of Article I, Section 10 of the United States Constitution which states "No State shall...pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts..." In this particular case, it was determined that an act passed by Ohio's legislature interfered with a contract made between an individual and a turnpike company for use of their roadways. As such, it was found to be unconstitutional and void as per Article I Section 10.

In the case of Turnpike Company v. The State, the Supreme Court was tasked with deciding whether a state legislature had the power to revoke a charter granted by it to an incorporated company. In this particular instance, the legislature revoked a turnpike company's charter and took possession of its property without compensation for damages incurred in constructing roads and bridges on behalf of the state. The majority opinion held that since states have plenary powers over their own internal affairs, they are not bound by any contract or obligation when exercising those powers; thus, no compensation is due from them for revoking charters or taking private property under such circumstances. However, Justice Nelson dissented from this ruling arguing that while states do possess certain inherent rights as sovereigns within their borders, these rights must be exercised consistently with constitutional limitations imposed upon them by both federal and state constitutions which guarantee citizens' right to just compensation when private property is taken for public use. Therefore he concluded that if legislatures wish to exercise their authority in such matters then they should provide reasonable indemnity whenever necessary so as not infringe upon individuals’ constitutionally protected interests in life liberty and property