The appellants appealed a decision dismissing their action to recover the proceeds of a life insurance policy.
The insured signed an application and paid a deposit, but the initial premium was not fully paid until a month later, after the insured's health had deteriorated and he was hospitalized for what was later diagnosed as lung cancer.
The Supreme Court of Canada held that under art. 2516 of the Civil Code of Lower Canada, the insurance never came into effect because the insurability of the risk had changed before the initial premium was paid.
The Court also found no evidence that the insurer waived the application of art. 2516.
