In the case of New York Life Insurance Co. v. Gamer, Executrix (1937), the Supreme Court ruled in favor of New York Life Insurance Company, reversing a lower court's decision that had favored Mrs. Gamer, who was acting as executrix for her deceased husband's estate. The dispute centered around whether Mr. Gamer’s life insurance policy should be considered void due to his suicide within two years of taking out the policy - an act which violated a clause in his contract with New York Life Insurance Company stating that if he died by suicide within this period, no payout would occur. The lower court initially sided with Mrs.Gamer on grounds that Mr.Gamer was mentally ill at the time and therefore not responsible for his actions; however, upon appeal to the Supreme Court it was determined there were insufficient evidence proving mental illness at time of death and thus upheld validity of contractual terms.

In the dissenting opinion for New York Life Insurance Co. v. Gamer, 1937, Justice Cardozo expressed his disagreement with the majority's decision to uphold a lower court ruling that an insurance policy was in effect at the time of death despite non-payment of premiums due to insanity. He argued that there should be no distinction between physical and mental incapacity when it comes to contractual obligations; if one is physically unable to perform their duties under a contract, they are not held liable - so why should this differ for those mentally incapable? Furthermore, he contended that allowing such exceptions would open up potential abuse by policyholders who could claim mental illness as an excuse for non-payment while still expecting benefits upon death. This interpretation undermines the principle of mutual consent in contracts and creates uncertainty within insurance law.