In the case of Western Loan and Savings Company v. Butte and Boston Consolidated Mining Company (1907), the U.S Supreme Court was tasked with determining whether a mortgage on mining property in Montana, given to secure bonds issued by a Massachusetts corporation, could be foreclosed upon in federal court. The plaintiff, Western Loan & Savings Co., argued that it had jurisdiction because it was an Ohio corporation while the defendant was from Massachusetts. However, the defendant contended that since both corporations were doing business in Montana where they also had their principal offices and assets located there; hence they should be considered citizens of Montana for diversity purposes. The Supreme Court ruled against Western Loan & Savings Co., stating that under existing laws at that time, corporations were not deemed citizens within state jurisdictions merely due to conducting operations or having their principal office there unless incorporated by those states as well. Therefore, both companies being foreign entities operating in Montana did not make them residents of this state for legal proceedings related to diversity jurisdiction.

In the dissenting opinion for Western Loan and Savings Company v. Butte and Boston Consolidated Mining Company, it was argued that the majority's decision to uphold a lower court ruling in favor of Butte and Boston Consolidated Mining Company was incorrect. The dissent contended that there were significant errors made by the trial court which should have been corrected on appeal. Specifically, they believed that certain evidence presented at trial had been improperly admitted, leading to an unfair verdict against Western Loan and Savings Company. Furthermore, they disagreed with how damages were calculated in this case as it did not accurately reflect actual losses suffered by Western Loan due to alleged fraudulent actions taken by Butte & Boston Consolidated Mining Co., thereby resulting in excessive penalties imposed upon them.