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APALOO C.J.: The main facts of this case are not in dispute. The respondents (hereinafter called the firm) are general merchants and wholesalers. They so described themselves in a printed “Fire Insurance Proposal Form”’ of the appellant-company (hereinafter called the company). The company, as its name implies, is an insurance company. Both the firm and the company seem to have had a long business association. The firm’s representative put this as “over twenty years.” It would seem that this association generated mutual confidence in each other. Indeed, the company’s representative said although the premises in which the firm stored the textiles which it proposed to insure, was not satisfactory to them, they obliged because “the proposer was an old customer and he claimed the goods belonged to them.”
On 6 April 1977, a representative of the firm filled a printed form described as “Proposal for Fire Insurance.” The merchandise he proposed to insure were textiles and the insured value w…