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American Home Insurance Company v. Tantoco Enterprises Inc

American Home Insurance Company issued a fire insurance policy to Tantoco Enterprises for an oil mill. When a fire destroyed Tantoco's new oil mill, American Home denied the insurance claim, arguing that no policy covered the burned mill. The court ruled in favor of Tantoco, finding that despite any misdescription in the policy, the parties' clear intent was for the policy to cover Tantoco's new oil mill, as insurance agents typically inspect properties before issuing policies.

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203 views1 page

American Home Insurance Company v. Tantoco Enterprises Inc

American Home Insurance Company issued a fire insurance policy to Tantoco Enterprises for an oil mill. When a fire destroyed Tantoco's new oil mill, American Home denied the insurance claim, arguing that no policy covered the burned mill. The court ruled in favor of Tantoco, finding that despite any misdescription in the policy, the parties' clear intent was for the policy to cover Tantoco's new oil mill, as insurance agents typically inspect properties before issuing policies.

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Michael
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33. American Home Insurance Company v. Tantoco Enterprises Inc.

, 366 SCRA 740 (2001)


FACTS:
Respondent Tantuco Enterprises, Inc. is engaged in the coconut oil milling and refining industry. It owns
two oil mills the second being the new oil mill, which were separately covered by fire insurance policies issued
by petitioner American Home Assurance Co., Philippine Branch. A fire that broke out in the early morning of
September 30, 1991 gutted and consumed the new oil mill. Respondent immediately notified the petitioner of the
incident. The latter then sent its appraisers who inspected the burned premises and the properties destroyed.
Thereafter, in a letter dated October 15, 1991, petitioner rejected respondents claim for the insurance proceeds on the
ground that no policy was issued by it covering the burned oil mill.
ISSUE: Is petitioners (insurer) contention correct?
RULING:
In view of the custom of insurance agents to examine buildings before writing policies upon them, and
since a mistake as to the identity and character of the building is extremely unlikely, the courts are inclined to
consider that the policy of insurance covers any building which the parties manifestly intended to insure, however
inaccurate the description may be. Notwithstanding, 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.

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