In the Royal Insurance Company v. Martin case of 1903, the US Supreme Court ruled in favor of Martin, upholding a decision by the Circuit Court for Southern New York. The dispute arose from an insurance policy that Royal Insurance Company issued to cover Martin's sugar refinery against fire damage. A fire occurred and caused significant damage to the property; however, when Martin filed a claim with his insurer for compensation under their agreement, they refused payment on grounds that he had violated certain conditions stipulated in their contract - specifically related to maintaining watchmen at all times on premises and having steam pressure within specific limits during non-working hours. The court found these conditions unreasonable as they were not directly linked with preventing or mitigating risk of fire but rather seemed designed more towards limiting liability exposure for insurer than protecting insured party's interests. Therefore it held such provisions void as contrary to public policy and affirmed lower court’s judgment awarding damages plus interest to plaintiff.

In the dissenting opinion for Royal Insurance Company v. Martin, the justice disagreed with the majority's interpretation of a fire insurance policy clause that limited liability in cases where other insurance policies were also in effect. The dissent argued that this clause should not be interpreted to mean that each insurer is only liable for a proportionate share of loss when multiple policies are present. Instead, it was suggested that such clauses merely prevent an insured party from recovering more than their actual losses by claiming under multiple policies; they do not limit an individual insurer’s potential full liability up to its own policy limits if other insurers fail to pay out on their respective obligations. This view maintains focus on protecting insured parties and ensuring they can recover their losses even if one or more insurers default or become insolvent.