In the case of Banholzer v. New York Life Insurance Company, 1899, the U.S Supreme Court dealt with a dispute over an insurance policy claim. The plaintiff, Mrs. Banholzer had taken out two life insurance policies on her husband who later committed suicide. Upon his death, she sought to collect the benefits from these policies but was denied by New York Life Insurance Company as they argued that Mr. Banholzer's suicide violated a clause in their contract which stated that if he died by his own hand (whether sane or insane) within two years of taking out the policy then no payment would be made. The court ruled in favor of New York Life Insurance Company stating that it is not against public policy for an insurer to limit its liability under such circumstances and therefore upheld this provision in their contracts as valid and enforceable.

In the dissenting opinion for Banholzer v. New York Life Insurance Company, it was argued that the majority's decision to uphold the insurance company's denial of benefits based on a misrepresentation clause in their policy was unjust. The justice disagreed with the interpretation of this clause by his colleagues and believed that it should not be used as grounds for denying payment when there is no evidence of fraud or intent to deceive on part of the insured party. He contended that such clauses are often misunderstood by policyholders and can lead to unfair outcomes if strictly enforced without consideration for individual circumstances. Furthermore, he expressed concern about setting a precedent where insurance companies could easily deny claims based on minor inaccuracies in application forms, which would undermine consumer protection and public trust in these institutions.