In the 1908 case of Commercial Mutual Accident Company v. Davis, the U.S Supreme Court was tasked with determining whether an insurance policy could be considered a wagering contract and therefore void under Kentucky law. The plaintiff, Davis, had taken out an accident insurance policy on his life from Commercial Mutual Accident Company. After suffering injuries in an accident that led to his death, Davis' wife sought to collect benefits from the policy but was denied by the company who argued that it constituted a wagering contract as there were no insurable interest involved since he did not suffer any financial loss due to his own death. The court ruled in favor of Mrs.Davis stating that such policies are not wagers because they compensate for potential losses resulting from accidental injury or death which is unpredictable and uncertain event; hence these contracts serve a legitimate purpose rather than merely facilitating gambling on human life.

In the dissenting opinion for Commercial Mutual Accident Company v. Davis, it was argued that the majority's decision to uphold a lower court ruling in favor of Davis contradicted established principles of contract law and insurance policy interpretation. The dissenting justices contended that the language used in the accident insurance policy issued by Commercial Mutual Accident Company was clear and unambiguous, thus leaving no room for interpretation or construction. They believed that under this policy, Davis should not have been entitled to receive benefits as he did not meet all conditions stipulated therein - specifically, his injury did not result directly from an accident but rather from exposure after an accident which is excluded by the terms of coverage. Therefore, they opined that upholding such claim would set a dangerous precedent where courts could arbitrarily interpret contracts based on their own understanding rather than adhering strictly to its explicit terms.