Ong Guan Can v. The Century Insurance Co.

Summary

This commercial law case involved a fire insurance dispute where Century Insurance Co. sought to rebuild a destroyed property with inferior materials instead of paying the P45,000 policy value. The Supreme Court affirmed the lower court's ruling that the insurance company's election was improper under Civil Code provisions governing alternative obligations. The Court emphasized that forcing the insured to accept a smaller, inferior reconstruction without additional compensation would be inequitable and unjust. The decision establishes important precedent regarding insurance companies' obligations when exercising contractual options to rebuild rather than pay monetary compensation, requiring proper notice, consent, and equivalent value in any reconstruction offered.