In Insurance Company v. Lyman, the Supreme Court of the United States was asked to decide whether an insurance company was liable for a policyholder’s death. The policyholder, Lyman, had taken out a life insurance policy with the insurance company. After Lyman’s death, his widow attempted to collect the policy benefits, but the insurance company refused to pay, claiming that Lyman had made a false statement in his application for the policy. The Supreme Court held that the insurance company was liable for the policy benefits. The Court reasoned that the insurance company had accepted the policy and had not made any inquiry into the truth of the statements in the application. Therefore, the insurance company was estopped from denying liability on the basis of the false statement. The Court also held that the insurance company was not entitled to a refund of the premiums paid by Lyman, as the insurance company had not been damaged by the false statement. In conclusion, the Supreme Court held that the insurance company was liable for the policy benefits and was not entitled to a refund of the premiums paid by Lyman. The Court’s decision established that insurance companies are liable for policy benefits even if the policyholder has made a false statement in the application.

In Insurance Company v. Lyman, the Supreme Court was asked to decide whether a policy of insurance issued by an insurance company in New York could be enforced against a resident of Massachusetts who had purchased it from an agent in that state. The majority opinion held that the policy was not enforceable because it violated public policy and did not meet certain requirements for contracts made across state lines. However, Justice Field dissented from this decision, arguing that there were no legal impediments preventing enforcement of such policies and that any attempt to do so would violate both federal law and the Constitution's Commerce Clause. He further argued that if states were allowed to impose their own laws on interstate commerce without regard for federal regulations or constitutional protections then they would effectively have unchecked power over all commercial transactions between them.