In the 1898 case of Orient Insurance Company v. Daggs, the U.S. Supreme Court ruled in favor of the insurance company, overturning a lower court's decision. The dispute arose when Mr. Daggs claimed compensation from his insurer after suffering property damage due to fire; however, he had not paid his premium at that time and was technically uninsured during the incident. The lower court sided with Mr.Daggs on grounds that state law prohibited cancellation without notice and therefore he should be covered despite non-payment of premiums. The Supreme Court disagreed with this interpretation and reversed it by stating that an insurance policy is essentially a contract between two parties - if one party fails to fulfill their obligations (in this case payment), then they cannot expect benefits under said contract (coverage). Thus, since Mr.Daggs failed to pay his premium before suffering losses due to fire, Orient Insurance Company was not obligated to cover those damages.

In the dissenting opinion for Orient Insurance Company v. Daggs, Justice Harlan argued that the majority's decision was inconsistent with prior rulings and principles of insurance law. He contended that an insurer should not be allowed to avoid liability simply because it did not know about a previous fire on the insured property when issuing a policy. According to him, if insurers want protection against such risks, they should explicitly include them in their policies rather than relying on general clauses about material misrepresentations or breaches of warranty. Furthermore, he believed that allowing insurers to escape liability in this way would undermine public trust and confidence in insurance contracts by making their validity dependent upon facts often known only to the insurer itself.