[G.R. No. 138941.

October 8, 2001] AMERICAN HOME ASSURANCE

COMPAN , petitioner, vs. !AN!UCO EN!ERPRISES, INC., respondent.

"AC!S# Before us is a Petition for Review on Certiorari assailing the Decision of the Court of Appeals in CA-G.R. CV No. 5222 pro!ulgate" on #anuar$ %& '''& which affir!e" in toto the Decision of the Regional (rial Court& Branch 5)& *ucena Cit$ in Civil Case No. '2-5 "ate" +cto,er -& ''5. Respon"ent (antuco .nterprises& /nc. is engage" in the coconut oil !illing an" refining in"ustr$. /t owns two oil !ills. Both are locate" at its factor$ co!poun" at /$a!& *ucena Cit$. /t appears that respon"ent co!!ence" its ,usiness operations with onl$ one oil !ill. /n '00& it starte" operating its secon" oil !ill. (he latter ca!e to ,e co!!onl$ referre" to as the new oil !ill. (he two oil !ills were separatel$ covere" ,$ fire insurance policies issue" ,$ petitioner A!erican 1o!e Assurance Co.& Philippine Branch.2 3 (he first oil !ill was insure" for three !illion pesos 4P)&555&555.556 un"er Polic$ No. )5--7%)2)2%-) for the perio" 8arch & '' to ''2.223 (he new oil !ill was insure" for si9 !illion pesos 4P-&555&555.556 un"er Polic$ No. )5--7%)2)2 -' for the sa!e ter!.2)3 +fficial receipts in"icating pa$!ent for the full a!ount of the pre!iu! were issue" ,$ the petitioner:s agent.2%3 A fire that ,ro;e out in the earl$ !orning of <epte!,er )5& '' gutte" an" consu!e" the new oil !ill. Respon"ent i!!e"iatel$ notifie" the petitioner of the inci"ent. (he latter then sent its appraisers who inspecte" the ,urne" pre!ises an" the properties "estro$e". (hereafter& in a letter "ate" +cto,er 5& '' & petitioner re=ecte" respon"ent>s clai! for the insurance procee"s on the groun" that no polic$ was issue" ,$ it covering the ,urne" oil !ill. /t state" that the "escription of the insure" esta,lish!ent referre" to another ,uil"ing thus? @+ur polic$ nos. )5-7%)2)2 -' 4Ps -86 an" )5--7%)2)2%-% 4Ps )86 e9ten" insurance coverage to $our oil !ill un"er Buil"ing No. 5& whilst the affecte" oil !ill was un"er Buil"ing No. %.A253 A co!plaint for specific perfor!ance an" "a!ages was conseBuentl$ institute" ,$ the respon"ent with the R(C& Branch 5) of *ucena Cit$. +n +cto,er -& ''5& after trial& the lower court ren"ere" a Decision fin"ing the petitioner lia,le on the insurance polic$ thus? ISSUE? 8a$ the insure" recover un"er the polic$ notwithstan"ing the !is"escription in the fire polic$C RU$ING# Petition "is!isse". (he pri!ar$ reason a"vance" ,$ the petitioner in resisting the clai! of the respon"ent is that the ,urne" oil !ill is not covere" ,$ an$ insurance polic$. Accor"ing to it& the oil !ill insure" is specificall$ "escri,e" in the polic$ ,$ its ,oun"aries in the following !anner?

@Dront? ,$ a "rivewa$ thence at 0 !eters "istance ,$ Bl"g. No. 2.

Right? *eft? Rear?

,$ an open space thence ,$ Bl"g. No. %. A"=oining thence an i!perfect wall ,$ Bl"g. No. %. ,$ an open space thence at 0 !eters "istance.A

1owever& it argues that this specific ,oun"ar$ "escription clearl$ pertains& not to the ,urne" oil !ill& ,ut to the other !ill. /n other wor"s& the oil !ill gutte" ,$ fire was not the one "escri,e" ,$ the specific ,oun"aries in the conteste" polic$. /n construing the wor"s use" "escriptive of a ,uil"ing insure"& the greatest li,eralit$ is shown ,$ the courts in giving effect to the insurance. /n view of the custo! of insurance agents to e9a!ine ,uil"ings ,efore writing policies upon the!& an" since a !ista;e as to the i"entit$ an" character of the ,uil"ing is e9tre!el$ unli;el$& the courts are incline" to consi"er that the polic$ of insurance covers an$ ,uil"ing which the parties !anifestl$ inten"e" to insure& however inaccurate the "escription !a$ ,e. Notwithstan"ing& therefore& the !is"escription in the polic$& it is ,e$on" "ispute& to our !in"& that what the parties !anifestl$ inten"e" to insure was the new oil !ill. (his is o,vious fro! the categorical state!ent e!,o"ie" in the polic$& e9ten"ing its protection?

@+n !achineries an" eBuip!ent with co!plete accessories usual to a coconut oil !ill inclu"ing stoc;s of copra& copra ca;e an" copra !ills whilst containe" in the %e& o'( )'(( ,uil"ing& situate 4sic6 at ENN+. A*+NG NA(/+NA* 1/G1 FAG& B+. /GA8& *EC.NA C/(G ENB*+CH.D.A2 )3 4emphasis supplied.6
/f the parties reall$ inten"e" to protect the first oil !ill& t*e% t*ere '+ %o %ee, to +-ec'./ 't 0+ %e&. /n"ee"& it woul" ,e a,sur" to assu!e that respon"ent woul" protect its first oil !ill for "ifferent a!ounts an" leave uncovere" its secon" one. As !entione" earlier& the first oil !ill is alrea"$ covere" un"er Polic$ No. )5--7%)2)2%-% issue" ,$ the petitioner. /t is unthin;a,le for respon"ent to o,tain the other polic$ fro! the ver$ sa!e co!pan$. (he latter ought to ;now that a secon" agree!ent over that sa!e realt$ results in its over insurance. (hese facts lea" us to hol" that the present case falls within one of the recogniIe" e9ceptions to the parole evi"ence rule. En"er the Rules of Court& a part$ !a$ present evi"ence to !o"if$& e9plain or a"" to the ter!s of the written agree!ent if he puts in issue in his plea"ing& a!ong others& its failure to e9press the true intent an" agree!ent of the parties thereto. 2 53 1ere& the contractual intention of the parties cannot ,e un"erstoo" fro! a !ere rea"ing of the instru!ent. (hus& while the contract e9plicitl$ stipulate" that it was for the insurance of the new oil !ill& the ,oun"ar$ "escription written on the polic$ conce"e"l$ pertains to the first oil !ill. (his irreconcila,le "ifference can onl$ ,e clarifie" ,$ a"!itting evi"ence aliunde, which will e9plain the i!perfection an" clarif$ the intent of the parties. Anent petitioner>s argu!ent that the respon"ent is ,arre" ,$ estoppel fro! clai!ing that the "escription of the insure" oil !ill in the polic$ was wrong& we fin" that the sa!e procee"s fro! a wrong assu!ption. .vi"ence on recor" reveals that respon"ent>s operating !anager& 8r. ."ison

(antuco& notifie" 8r. Bor=a 4the petitioner>s agent with who! respon"ent negotiate" for the contract6 a,out the inaccurate "escription in the polic$. 1owever& 8r. Bor=a assure" 8r. (antuco that the use of the a"=ective %e& will "istinguish the insure" propert$. (he assurance convince" respon"ent that& "espite the i!preciseness in the specification of the ,oun"aries& the insurance will cover the new oil !ill. Fe again stress that the o,=ect of the court in construing a contract is to ascertain the intent of the parties to the contract an" to enforce the agree!ent which the parties have entere" into. /n "eter!ining what the parties inten"e"& the courts will rea" an" construe the polic$ as a whole an" if possi,le& give effect to all the parts of the contract& ;eeping in !in" alwa$s& however& the pri!e rule that in the event of "ou,t& this "ou,t is to ,e resolve" against the insurer. /n "eter!ining the intent of the parties to the contract& the courts will consi"er the purpose an" o,=ect of the contract. /n a further atte!pt to avoi" lia,ilit$& petitioner clai!s that respon"ent forfeite" the renewal polic$ for its failure to pa$ the full a!ount of the pre!iu! an" ,reach of the Dire .9tinguishing Appliances Farrant$. IN 1IE2 2HEREO"& fin"ing no reversi,le error in the i!pugne" Decision& the instant petition is here,$ D/<8/<<.D.