In the case of Polk v. Mutual Reserve Fund Life Association of New York, 1907, the U.S Supreme Court ruled in favor of Mutual Reserve Fund Life Association (defendant). The plaintiff, Mrs. Polk had filed a claim against the defendant for refusing to pay her husband's life insurance policy after his death due to suicide. The defendant argued that Mr. Polk's policy was void as he had committed suicide within two years from its issuance date - a condition explicitly stated in their contract which nullifies any claims if such an event occurs within this period. Despite Mrs.Polk arguing that her husband was insane at the time and therefore not responsible for his actions, thus should be exempted from this clause; Justice Holmes writing for majority held that insanity does not invalidate contractual obligations unless it is specifically mentioned in said contract or statute law governing contracts.

In the dissenting opinion for Polk v. Mutual Reserve Fund Life Association of New York, Justice Harlan argued that the majority's decision was inconsistent with previous rulings and principles of contract law. He contended that it was inappropriate to allow an insurance company to avoid paying a claim based on a technicality in their policy language, especially when there was no evidence of fraud or misrepresentation by the insured party. Furthermore, he believed that any ambiguity in an insurance policy should be interpreted against the insurer rather than against the insured person who had little control over its terms. In his view, this case represented an unjust enrichment for insurers at consumers' expense and undermined public confidence in life insurance contracts.