In the case of King v. Order of United Commercial Travelers of America (1947), the U.S. Supreme Court was asked to determine whether a fraternal benefit society's decision regarding insurance benefits could be reviewed by courts or if it should be considered final and binding due to an internal review process within the organization itself. The plaintiff, Mrs. King, sought payment from her deceased husband's life insurance policy with the defendant organization but was denied on grounds that he had misrepresented his health condition when applying for membership and coverage. The court ruled in favor of Mrs. King, stating that while such societies have discretion over their own affairs, this does not extend to absolute immunity from judicial review especially where contractual rights are involved as in cases involving insurance policies issued by them. It held that decisions made by these organizations can indeed be challenged in court if they are arbitrary or capricious or lack any rational basis; hence affirming lower courts' judgments awarding Mrs.King recovery under her late husband’s certificate.

In the dissenting opinion for King v. Order of United Commercial Travelers of America, Justice Jackson argued that the majority's decision to allow a beneficiary to collect on an insurance policy despite false statements made by the insured was misguided. He contended that this ruling undermined fundamental principles of contract law and could potentially encourage fraud in insurance dealings. According to him, it is essential for parties entering into contracts, including insurance policies, to provide accurate information so as not to mislead or deceive one another; otherwise it would be unfair and unjust. Furthermore, he expressed concern about potential negative implications this judgment might have on future cases involving similar circumstances where truthfulness should be expected and required from all parties involved in contractual agreements.