In Union Trust Company v. Illinois Midland Railway Company, the Supreme Court of the United States was asked to decide whether a railroad company was liable for the debts of a corporation that had leased its property. The Union Trust Company had loaned money to the Illinois Midland Railway Company, and the railway company had then leased its property to the Chicago and Eastern Illinois Railroad Company. The Chicago and Eastern Illinois Railroad Company subsequently went bankrupt, and the Union Trust Company sought to recover its loan from the Illinois Midland Railway Company. The Supreme Court held that the Illinois Midland Railway Company was not liable for the debts of the Chicago and Eastern Illinois Railroad Company. The Court reasoned that the lease between the two companies was a separate and distinct contract, and that the Illinois Midland Railway Company had not assumed any of the liabilities of the Chicago and Eastern Illinois Railroad Company. The Court further held that the Union Trust Company had not taken any security from the Illinois Midland Railway Company, and thus had no right to recover its loan from the railway company.

Justice Field delivered the dissenting opinion in Union Trust Company v. Illinois Midland Railway Company, arguing that the majority's decision was contrary to established precedent and would lead to an unjust result. He argued that under prior decisions of this Court, a corporation could not be held liable for taxes on property it did not own at the time of assessment or collection. In this case, he noted that although the railway company had owned certain bonds when they were assessed by state authorities for taxation purposes, those bonds had been sold before any tax was collected from them. Therefore, Justice Field concluded that since no liability existed against these particular bonds at the time of collection and since there was no other basis upon which liability could attach to them after their sale by the railway company, it followed as a matter of law that neither party should be held responsible for payment of such taxes.