In the case of Stipcich v. Metropolitan Life Insurance Company, 1927, the US Supreme Court ruled in favor of an insurance company that had denied a claim on a life insurance policy due to non-disclosure by the insured party. The court held that even if certain information was not specifically asked for during application process, there is an implied duty on part of the applicant to disclose all relevant facts affecting risk assessment. In this particular case, Mr. Stipcich failed to inform Metropolitan Life Insurance about another life insurance policy he held with a different insurer at time of his application - something which could have influenced their decision or terms under which they issued him coverage. This omission constituted material misrepresentation and thus justified denial of claim when Mr.Stipcich died shortly after taking out new policy.

In the dissenting opinion for STIPCICH v. METROPOLITAN LIFE INSURANCE COMPANY, Justice Stone argued that the majority's decision was inconsistent with established legal principles and precedent. He contended that an insured person has no obligation to disclose information unless specifically asked by the insurer during negotiations. The duty of disclosure should not be extended beyond this point as it would place an unfair burden on policyholders who may be unaware of what is material or relevant to insurers' risk assessments. Furthermore, he disagreed with the majority's view that a life insurance contract inherently involves utmost good faith which imposes a broader duty of disclosure on applicants than other types of contracts do. Instead, he believed such contracts should follow general rules applicable to all contractual relationships where non-disclosure only constitutes fraud when there is deliberate concealment or misrepresentation intended to deceive and induce action from another party.