The appellant hotel owner applied for fire insurance, which was accepted without a requirement to maintain his automatic extinguisher system.
The subsequently issued policy contained a clause requiring bi-annual maintenance by an authorized representative.
Following a fire where the extinguisher failed, the insurers denied coverage based on the maintenance clause.
The Supreme Court of Canada held that under the Civil Code of Lower Canada, the insurance contract was formed upon acceptance of the application.
Because the insurer did not indicate the inconsistency between the application and the policy in writing, the application prevailed, and the insurers were liable to compensate the appellant.
