In Insurance Company v. Gridley, the Supreme Court of the United States was asked to decide whether an insurance company was liable for damages caused by a fire that occurred on the insured's property. The insured had purchased a policy from the insurance company that provided coverage for losses caused by fire. The insured argued that the insurance company was liable for the damages caused by the fire, while the insurance company argued that the policy did not cover the damages. The Supreme Court held that the insurance company was liable for the damages caused by the fire. The Court found that the policy provided coverage for losses caused by fire, and that the insured had paid the premiums for the policy. The Court also found that the insurance company had not provided any evidence that the policy did not cover the damages caused by the fire. Therefore, the Court held that the insurance company was liable for the damages caused by the fire.

In Insurance Company v. Gridley, the Supreme Court was asked to determine whether a policy of insurance issued by an insurance company could be voided due to non-payment of premiums. The majority opinion held that the policy had been properly cancelled and that no further payments were required from the insured party. Justice Field dissented, arguing that while it is true that payment of premiums is necessary for a valid contract between insurer and insured, in this case there was evidence suggesting that some form of payment had been made prior to cancellation which should have prevented such action on behalf of the insurer. He argued further than even if no actual money changed hands at any point during negotiations, consideration should still be given as both parties entered into an agreement with expectations regarding performance and benefit; thus making it unfair for one side (the insurer) to unilaterally void or cancel without proper cause or notice being provided first.