The Supreme Court case of Quebec Steamship Co. v. Merchant was a dispute between the two parties over whether or not an insurance company had to pay for damages caused by a fire that occurred on board one of the steamships owned by Quebec Steamship Company. The court ruled in favor of the insurance company, finding that they were not liable for any losses due to negligence on behalf of the ship's captain and crew, as well as their failure to take proper precautions against such risks. Furthermore, it held that even if there had been negligence on part of either party, it would have been impossible for them to foresee or prevent such an event from occurring at sea given its unpredictable nature and inherent dangers associated with maritime travel. This ruling established important precedent regarding liability in cases involving marine accidents and disasters at sea going forward.

In the dissenting opinion of Quebec Steamship Co. v. Merchant, Justice Rand argued that the majority’s decision was incorrect and should be overturned. He believed that there were two separate contracts between the parties in this case: one for carriage of goods and another for insurance coverage against loss or damage to those goods during transit. The contract for carriage did not include any language regarding liability limits, while the insurance policy explicitly stated a limit on damages recoverable from losses sustained by insured cargo owners due to negligence on behalf of Quebec Steamships Co.. Therefore, he concluded that it would be unfair to allow plaintiffs to collect more than what they had agreed upon in their insurance policy with Quebec Steamships Co., regardless if they could prove negligence or not. In his view, allowing them to do so would amount to an unjust enrichment at the expense of defendants who had acted in good faith throughout all proceedings related thereto