In the case of William H. Tayloe v. The Merchants' Fire Insurance Company of Baltimore, the Supreme Court was asked to decide whether a fire insurance policy issued by the company covered damage caused by an earthquake that occurred in 1847. At issue was whether or not earthquakes were included under "accidental losses" as defined in the policy language and if so, did it apply to this particular event? The court held that while earthquakes are generally considered accidental losses, they must be specifically mentioned in order for them to be covered under a given policy; since there was no mention of earthquakes in this particular contract, it did not cover damages resulting from this earthquake and thus Tayloe's claim against the company failed.

In the case of William H. Tayloe v. The Merchants' Fire Insurance Company of Baltimore, the dissenting opinion argued that a contract between two parties should be interpreted according to its plain and literal meaning unless there is evidence that it was intended to mean something else. In this particular case, the appellant had taken out an insurance policy with the company for his property in Washington D.C., but when he filed a claim after his property was destroyed by fire, it was denied because it did not meet certain conditions stated in the policy's fine print which were not made clear at time of purchase or even during subsequent conversations between him and representatives from the company about renewing his coverage. The dissent argued that since these conditions were never explicitly discussed nor agreed upon by both parties prior to signing their agreement, they could not be used as grounds for denying Mr Tayloe's claim; instead they should have been considered invalid due to lack of mutual consent on them being part of their contract.