In the case of St. Louis, Iron Mountain and Southern Railway Company v. Commercial Union Insurance Company in 1890, the U.S Supreme Court ruled on a dispute involving an insurance claim for damages to goods during transportation by rail. The railway company had taken out an "open policy" with Commercial Union Insurance that covered any losses or damage to property while being transported on its trains. When a fire broke out in one of their cars carrying cotton, causing significant loss, the railway company filed a claim with the insurer for compensation under this policy. However, Commercial Union refused to pay out arguing that they were not liable as there was no specific contract covering these particular goods at risk when the incident occurred - despite having issued certificates insuring other shipments made by this same client previously. The court sided with St Louis Iron Mountain & Southern Railway Co., stating that it was clear from previous dealings between both parties and terms within their open policy agreement itself (which did not require individual contracts per shipment) that coverage should have been provided here too; thus ruling against Commercial Union's narrow interpretation of contractual obligations.

In the dissenting opinion for St. Louis, Iron Mountain and Southern Railway Company v. Commercial Union Insurance Company, it was argued that the majority's decision to hold the railway company liable for damages caused by a fire on its property was incorrect. The dissenting justices believed that there wasn't sufficient evidence to prove negligence on part of the railway company or its employees in causing or failing to prevent the fire from spreading beyond their premises. They contended that mere speculation about possible causes of a fire is not enough to establish liability; concrete proof must be provided instead. Furthermore, they disagreed with imposing an absolute duty upon railroad companies to prevent fires from escaping their premises under all circumstances without considering whether reasonable care had been taken.