In Phoenix Insurance Company v. Erie and Western Transportation Company, the Supreme Court of the United States was asked to determine whether a contract of insurance was valid and enforceable. The contract was between Phoenix Insurance Company and Erie and Western Transportation Company, and it provided that Phoenix would insure Erie and Western against any loss or damage to its property while it was in transit. The Supreme Court held that the contract was valid and enforceable. The Court found that the contract was clear and unambiguous, and that it was supported by consideration. The Court also found that the contract was not against public policy, and that it was not void for lack of mutuality of obligation. The Court concluded that the contract was valid and enforceable, and that Phoenix Insurance Company was liable for any loss or damage to Erie and Western's property while it was in transit. The Court also held that the contract was not void for lack of mutuality of obligation, and that the parties were bound by its terms.

In Phoenix Insurance Company v. Erie and Western Transportation Company, the Supreme Court was asked to decide whether a contract between two parties could be enforced when it had been made in violation of an existing state law. The majority opinion held that the contract was not enforceable because it violated public policy as expressed by the state legislature through its statute. Justice Field dissented from this decision, arguing that while contracts which violate statutes should generally not be enforced, there are exceptions to this rule where enforcement would serve justice and equity better than non-enforcement. He argued that since both parties were aware of the illegality at the time they entered into their agreement, denying them relief would result in an unjust enrichment for one party over another; therefore he concluded that under these circumstances, enforcing such a contract is appropriate and justifiable.