In the case of The Commercial Mutual Marine Insurance Company, Appellants v. The Union Mutual Insurance Company of New York, the Supreme Court was tasked with deciding whether a policy issued by one insurance company to cover losses sustained by another could be enforced against that other company. In this particular case, Commercial had issued a policy to Union covering certain risks and liabilities associated with their business operations. When an incident occurred resulting in damages for which Union sought coverage under the policy it had purchased from Commercial, they were denied on grounds that such policies are not legally enforceable between two companies who are both engaged in similar lines of business. Ultimately, however, the Supreme Court found that these types of policies can indeed be enforced when there is consideration given for them and when they do not violate public policy or any existing laws; thus reversing lower court decisions denying enforcement and remanding back to those courts for further proceedings consistent with its opinion.

In this case, the Commercial Mutual Marine Insurance Company (appellants) appealed a decision of the Circuit Court for the Southern District of New York that found in favor of The Union Mutual Insurance Company of New York. The appellants argued that they were entitled to recover from the appellee on two policies issued by them and accepted by an agent acting on behalf of both companies. In dissent, Justice Nelson argued that there was no evidence presented to show any agency relationship between the parties or any authority given to said agent beyond what was necessary for him to act as a broker. He further noted that even if such an agency existed, it would be void because it violated public policy due to its conflict with existing laws governing insurance contracts. As such, he concluded that judgment should have been entered in favor of The Union Mutual Insurance Company since there was no valid contract between them and their alleged agent at issue here.