In the 1912 case of Slocum v. New York Life Insurance Co., the U.S. Supreme Court ruled on a dispute over an insurance policy claim following a suicide. The plaintiff, Mrs. Slocum, was denied her late husband's life insurance payout by New York Life Insurance Company because his death was ruled as suicide and there was a clause in the policy excluding payouts for suicides within two years of taking out the policy. However, Mr. Slocum had been insane at his time of death and therefore could not have formed intent to commit suicide according to Massachusetts state law where they resided; hence Mrs.Slocum sued for recovery under this premise. The court held that even though Mr.Slocum’s insanity might be recognized under Massachusetts law as absolving him from forming suicidal intent, it did not necessarily apply when interpreting contracts such as an insurance agreement which is governed by general principles rather than local rules or policies.The contract language clearly excluded liability for any act committed while sane or insane during first two years after issuance of policy.Therefore,the company's refusal to pay out based on their interpretation of this exclusionary clause was upheld.

In the dissenting opinion for Slocum v. New York Life Insurance Co, Justice Holmes disagreed with the majority's decision to overturn a lower court ruling that favored an insurance company in a dispute over policy benefits. He argued that the plaintiff had not provided sufficient evidence to prove fraudulent intent on part of his deceased wife or her doctor when they failed to disclose her morphine addiction while applying for life insurance coverage. The justice believed it was unreasonable and unjustified to assume fraud without concrete proof, especially since there were plausible explanations as why this information might have been omitted unintentionally. Furthermore, he contended that even if such omission could be considered fraudulent under certain circumstances, it should not automatically lead to nullification of the entire contract unless its terms specifically stipulated so.