In the case of Wallace v. Adams in 1906, the United States Supreme Court dealt with a dispute over land ownership. The plaintiff, Wallace, claimed that he had been defrauded by Adams and others who conspired to sell him a piece of property they did not own. He sought to recover damages for this alleged fraud. However, the court ruled against him on technical grounds related to his filing of the lawsuit. The main issue was whether or not federal courts had jurisdiction over such cases involving real estate transactions under state law when there is diversity among parties involved (i.e., citizens from different states). The Supreme Court held that federal courts do have jurisdiction in these circumstances if it can be shown that there is an actual controversy between diverse parties which could be resolved by applying state law. However, in this particular case, Justice Holmes writing for the majority found no evidence supporting Wallace's claim about being deceived into buying non-existent property rights from defendants including Adams. Therefore, his complaint was dismissed as it failed to establish any valid cause of action under either Kentucky or Illinois laws where respective properties were located.

The dissenting opinion in the case of Wallace v. Adams argued that the majority's decision to uphold a tax on out-of-state insurance companies operating within Alabama was unconstitutional. The dissenters believed this violated the Commerce Clause, which gives Congress exclusive power over interstate commerce. They contended that by taxing these companies at a higher rate than those based within Alabama, it unfairly burdened and discriminated against interstate commerce. Furthermore, they disagreed with the majority's interpretation of an insurance company as not being part of 'commerce'. According to them, selling insurance policies across state lines is indeed a form of commercial activity subject to federal regulation under the Commerce Clause. Thus, they concluded that states should not have authority to impose discriminatory taxes on such activities.