AMERICAN HOME ASSURANCE COMPANY, petitioner, vs. TANTUCO ENTERPRISES, INC., respondent.

Doctrine: the object of the court in construing a contract is to ascertain the intent of the parties to the contract and to enforce the agreement which the parties have entered into. In determining what the parties intended, the courts will read and construe the policy as a whole and if possible, give effect to all the parts of the contract, keeping in mind always, however, the prime rule that in the event of doubt, this doubt is to be resolved against the insurer. In determining the intent of the parties to the contract, the courts will consider the purpose and object of the contract Facts: 1. Respondent Tantuco Enterprises, Inc. is engaged in the coconut oil milling and refining industry. - It owns two oil mills. Both are located at factory compound at Iyam, ucena !ity. 2. The two oil mills were separately covered by fire insurance policies issued by petitioner "merican #ome "ssurance !o., $hilippine Branch. 3. The irst oi! "i!! was insured for $%,&&&,&&&.&& under $olicy 'o. %&()*+%,%,+)% for the period -arch ., .//. to .//,. The ne# oi! "i!! was insured for $(,&&&,&&&.&& under $olicy 'o. %&()*+%,%,.)/ for the same term. $. " fire that broke out in the early morning of 0eptember %&,.//. gutted and consumed the new oil mill. - Respondent immediately notified the petitioner of the incident. - $etitioner then sent its appraisers to inspect the burned premises and the properties destroyed. - Thereafter, , petitioner rejected respondent1s claim for the insurance proceeds on the ground that no policy was issued by it covering the burned oil mill. - It stated that the description of the insured establishment referred to another building thus2 34ur policy nos. %&()*+%,%,.)/ 5$s (-6 and %&()*+%,%,+)+ 5$s %-6 e7tend insurance coverage to your oil mill under Building 'o. 8, whilst the affected oil mill was under Building 'o. .+. %. Respondent filed a complaint for specific performance and damages with the RT! &. T!2 rendered a 9ecision finding the petitioner liable on the insurance policy '. !"2 affirmed the RT! decision Issue:held2 did the !ourt of "ppeals erred in its legal interpretation of 1;ire E7tinguishing "ppliances <arranty1 of the policy= '4 Rationale2 $etitioner2 the oil mill gutted by fire was not the one described by the specific boundaries in the contested policy. - <hat e7acerbates respondent1s predicament is that it did not have the supposed wrong description or mistake corrected. - that respondent is 3(arre) (* t+e ,aro!e e-i)ence r.!e from presenting evidence - it is also 3(arre) (* estoppel from claiming that the description of the insured oil mill in the policy was wrong, because it retained the policy without having the same corrected before the fire by an endorsement in accordance with its !ondition 'o. ,>.3 0!2 .. In construing the words used descriptive of a building insured, the greatest liberality is shown by the courts in giving effect to the insurance. In view of the custom of insurance agents to e7amine buildings before writing policies upon them, and since a "ista/e as to t+e i)entit* an) c+aracter o t+e (.i!)in0 is e1tre"e!* .n!i/e!*, t+e co.rts are inc!ine) to consi)er t+at t+e

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,o!ic* o ins.rance co-ers an* (.i!)in0 #+ic+ t+e ,arties "ani est!* inten)e) to ins.re, +o#e-er inacc.rate t+e )escri,tion "a* (e 'otwithstanding, therefore, the misdescription in the policy, it is beyond dispute, to our mind, that what the parties manifestly intended to insure was the new oil mill. This is obvious from the categorical statement embodied in the policy, e7tending its protection2 - 34n machineries and e?uipment with complete accessories usual to a coconut oil mill including stocks of copra, copra cake and copra mills whilst contained in the new oil mill building, situate 5sic6 at @''4. " 4'A '"TI4'" #IA# <"B, B4. IB"-, @!E'" !ITB @'B 4!CE9.11 - I t+e ,arties rea!!* inten)e) to ,rotect t+e irst oi! "i!!, then there is no need to specify it as new. Indeed, it would be absurd to assume that respondent would protect its first oil mill for different amounts and leave uncovered its second one. - "s mentioned earlier, the first oil mill is already covered under $olicy 'o. %&() *+%,%,+)+ issued by the petitioner. It is unthinkable for respondent to obtain the other policy from the very same company. The latter ought to know that a second agreement over that same realty results in its over insurance. "s to $arole evidence issue2 - The imperfection in the description of the insured oil mill1s boundaries can be attributed to a misunderstanding between the petitioner1s general agent, -r. "lfredo Borja, and its policy issuing clerk, who made the error of copying the boundaries of the first oil mill when typing the policy to be issued for the new one. t+e ,resent case a!!s #it+in one o t+e reco0ni2e) e1ce,tions to t+e ,aro!e e-i)ence r.!e. @nder the Rules of !ourt, a ,art* "a* ,resent e-i)ence to "o)i *, e1,!ain or a)) to t+e ter"s o t+e #ritten a0ree"ent i +e ,.ts in iss.e in +is ,!ea)in0, a"on0 ot+ers, its ai!.re to e1,ress t+e tr.e intent an) a0ree"ent o t+e ,arties t+ereto - while the contract e7plicitly stipulated that it was for the insurance of the new oil mill , the boundary description written on the policy concededly pertains to the first oil mill. This irreconcilable difference can only be clarified by admitting evidence aliunde, which will e7plain the imperfection and clarify the intent of the parties. "s to estoppel issue2 - .Evidence on record reveals that respondent1s operating manager, -r. Edison Tantuco, notified -r. Borja 5the petitioner1s agent with whom respondent negotiated for the contract6 about the inaccurate description in the policy. - Ho#e-er, -r. Borja assured -r. Tantuco that the use of the adjective new will distinguish the insured property. The assurance convinced respondent, despite the impreciseness in the specification of the boundaries, the insurance will cover the new oil mill 3+e o(4ect o t+e co.rt in constr.in0 a contract is to ascertain t+e intent o t+e ,arties to t+e contract an) to en orce t+e a0ree"ent #+ic+ t+e ,arties +a-e entere) into. In )eter"inin0 #+at t+e ,arties inten)e), t+e co.rts #i!! rea) an) constr.e t+e ,o!ic* as a #+o!e an) i ,ossi(!e, 0i-e e ect to a!! t+e ,arts o t+e contract, /ee,in0 in "in) a!#a*s, +o#e-er, t+e ,ri"e r.!e t+at in t+e e-ent o )o.(t, t+is )o.(t is to (e reso!-e) a0ainst t+e ins.rer. In )eter"inin0 t+e intent o t+e ,arties to t+e contract, t+e co.rts #i!! consi)er t+e ,.r,ose an) o(4ect o t+e contract Petitioner2 claims that respondent forfeited the renewal policy for its failure to pay the full amount of the premium and breach of the ;ire E7tinguishing "ppliances <arranty. - The !ourt of "ppeals refused to consider this contention of the petitioner. - It held that this issue was raised for the first time on appeal, hence, beyond its jurisdiction to resolve, pursuant to Rule +(, 0ection .> of the Rules of !ourt. - $etitioner, however, contests this finding of the appellate court. It insists that the issue was raised in paragraph ,+ of its "nswer - SC: The argument fails to impress.

It is true that the asseverations petitioner made in paragraph ,+ of its "nswer ostensibly spoke of the policy1s condition for payment of the renewal premium on time and respondent1s non)compliance with it. Bet, it did not contain any specific and definite allegation that respondent did not pay the premium, or that it did not pay the full amount, or that it did not pay the amount on time. - -orever, the issue was never raised during the pre)trial >. Petitioner: respondent violated the e7press terms of the ;ire E7tinguishing "ppliances <arranty. - The breach occurred when the respondent failed to install internal fire hydrants inside the burned building as warranted. - SC: <e agree with the appellate court1s conclusion that the aforementioned warranty did not re?uire respondent to provide for all the fire e7tinguishing appliances enumerated therein. - "dditionally, we find that neither did it re?uire that the appliances are restricted to those mentioned in the warranty. In other words, what the warranty mandates is that respondent should maintain in efficient working condition within the premises of the insured property, fire fighting e?uipments such as, but not limited to, those identified in the list, which will serve as the oil mill1s first line of defense in case any part of it bursts into flame. I' DIE< <#ERE4;, finding no reversible error in the impugned 9ecision, the instant petition is hereby 9I0-I00E9.