RED LINE TRANSPORTATION CO. vs. RURAL TRANSIT CO.

GR No. 41570 / September 6, 1934/ J. Butte

Review of an order of the Public Service Commission

Doctrine:

There is no law that empowers the Public Service Commission or any court in this jurisdiction to authorize
one corporation to assume the name of another corporation as a trade name. Both the Rural Transit Company,
Ltd., and the Bachrach Motor Co., Inc., are Philippine corporations and the very law of their creation and
continued existence requires each to adopt and certify a distinctive name

The name of a corporation is therefore essential to its existence. It cannot change its name except in the manner
provided by the statute. By that name alone is it authorized to transact business.

The law gives a corporation no express or implied authority to assume another name that is unappropriated;
still less that of another corporation, which is expressly set apart for it and protected by the law. If any
corporation could assume at pleasure as an unregistered trade name the name of another corporation, this
practice would result in confusion and open the door to frauds and evasions and difficulties of administration
and supervision.

Facts:

Respondent filed with the Public Service Commission (PSC) an application for a certificate of new
service between Tuguegarao and Ilagan.
Petitioner opposed alleging that they already hold a certificate and is rendering adequate and
satisfactory service and by grating respondents application, it would constitute ruinous competition
for the said route.
PSC granted Respondents application and ordered that the certificate applied for be issued to the
applicant RURAL TRANSIT CO.
Petitioner filed a motion for rehearing and reconsideration because there was a pending case in CFI
Manila for the voluntary dissolution of respondents corporation.
At the PSC trial, the issue raised was who was the real party-in-interest in making such application?
Rural Transit Co. in its own name or Bachrach Motor Company using the trade name of Rural Transit?
PSC decided in favor of Respondent and the certificate was ordered to be issued in its name. Moreover,
it authorized Bachrach (through a resolution) to continue using the name of Rural Transit as its trade
name in all applications, etc. to be filed in PSC in connection with said business.

Issue:

Whether or not PSC can authorize Bachrach to assume the name of Rural Transit as a trade name? - NO

SC Ruling:
Both Rural Transit and Bachrach are Philippine Corporations and the very law of their creation and
continued existence requires each to adopt and certify a distinctive name.
The law gives a corporation no express or implied authority to assume another name that is
unappropriated.
If a corporation assumes the name of another corporation, it could result in confusion and open the
door to frauds and evasions and difficulties of administration and supervision.

DLPS
 UNIVERSAL MILLS CORPORATION vs. UNIVERSAL TEXTILE MILLS, INC.
GR No. L-28351 / July 28, 1977 / J. Barredo
Appeal from the Order of the Securities and Exchange Commission

Doctrine:

Although UMC and UTM are not identical, they are so similar as to cause confusion to the general public
especially when UMC included the manufacture, dyeing, and selling of fabric of all kinds in which UTM had
been engaged for more than a decade ahead of UMC.

Facts:

UTM was organized in 1953 as a textile manufacturing firm. Universal Hosiery Mills Corp was
registered in 1954- its primary purpose is the manufacture of hosiers and wearing apparel of all kinds.
In 1963, it filed an amendment to its articles of incorporation changing its name to UMC because it
expanded its business to include the manufacture, dyeing, and selling of fabric of all kinds.
A fire gutted UMCs spinning mills and the news items appearing in the various newspapers carrying
reports on the fire created uncertainty and confusion among UTMs bankers, friends, stockholders,
and customers prompting UTM to make announcements, clarifying the real identity of the corporation
whose property was burned.
UMC argued that the names of the two corporations are not similar and even if there be some similarity,
it is not confusing or deceptive and that the word textile in UTMs name is dominant to distinguish
the two.
SEC enjoined UMC from further using its corporate name and held that the word textile in UTM
cannot possibly assure the exclusion of all other entities with similar names from the mind of the public
especially so, if the business they are engaged in are the same. Moreover, when UMC filed the
amendment when it changed its name, it undertook an undertaking promising to change its name in
the event that there is another person, firm, or entity who has obtained a prior right to the use of such
name or similar to it.

Issue:

Whether or not there was grave abuse of discretion on the part of SEC when they enjoined UMC to change its
corporate name No.

SC Ruling:

Appealed decision is affirmed.

Although the corporate names in question are not identical, they are indisputably so similar that even
under the test of reasonable care and observation as the public are capable of using and may be
expected to exercise confusion will usually arise considering that under the second amendment of
UMCs articles, it included among its primary purposes the manufacturing, dyeing, finishing, and
selling of fabrics of all kinds which UTM had been engaged for more than a decade ahead of UMC.
There are so many other appropriate names UMC could possibly adopt without arousing any suspicion
as to its motive and more importantly, any degree of confusion in the mind of the public which could
mislead even its own customers, existing or prospective.

DLPS
 PHILIPS EXPORT vs. CA, SEC, and STANDARD PHILIPS CORP.
GR No. 96161 / February 21, 1992/ J. Melencio-Herrera
Petition for review of the decision and resolution of CA

Doctrine:

The right to the exclusive use of a corporate name with freedom from infringement by similarity is
determined by priority of adoption.

Facts:
Petitioner is a foreign corporation organized under the laws of the Netherlands and is the registered
owner of the trademarks Philips and Philips Shield Emblem issued by the Bureau of Patents,
Trademarks, and Technology Transfer.
Petitioner filed a complaint with SEC asking for the cancellation of the word PHILIPS from private
respondents corporate name in view of the prior registration of Petitioners.
Respondents refused to amend its Articles of Incorporation
Petitioner filed a Writ of Injunction alleging that respondents use of the word PHILIPS amounts to an
infringement and clear violation of Petitioners trademark.
Respondents argued that its corporate name is not at all similar when considered in its entirety and that
its products (chain rollers, belts, bearings, and cutting saw) are different from petitioners electrical
products.
SEC ruled against the issuance of the writ and dismissed the petition for lack of merit. SEC cited
Section 18 of the Corporation Code. It ruled that the names in question are not identical and hence,
there is no confusing similarity between the names as those of the Petitioners contain at least two words
different from that of the respondents. Petitioners MR was likewise denied. On appeal, SEC en banc
affirmed the dismissal declaring that the names hardly breed confusion inasmuch as each contains two
different words and, therefore, rules out any possibility of confusing each other.
CA Respondents products are unrelated and non-competing with petitioners products such that
consumers would not in any probability mistake one as the source or origin of the product of the other.

SC Ruling:

the Decision of the Court of Appeals dated 31 July 1990, and its Resolution dated 20 November 1990,
are SET ASIDE and a new one entered ENJOINING private respondent from using PHILIPS as a
feature of its corporate name, and ORDERING the Securities and Exchange Commission to amend
private respondents Articles of Incorporation by deleting the word PHILIPS from the corporate name
of private respondent.
PHILIPS is a trademark/tradename which was registered as far back as 1922. Petitioners have the
exclusive right to its use which must be free from any infringement by similarity.
A corporations right to use its corporate and tradename is a property right which it may assert and
protect against the world in the same manner as it may protect its tangible property, against trespass
or conversion.
The right to the exclusive use of a corporate name with freedom from infringement by similarity is
determined by priority of adoption. There is no doubt with Petitioners prior adoption of the name
Philips because they were incorporated in 1956 or 26 years before respondent was issued a certificate.
Respondent also mentioned in its articles that they are to develop, manufacture and deal with electrical
products xxx so nothing could prevent them from dealing in the same line of business wc the petitioners
are also engaged in. Evidence tend to show that respondents their intention is to ride on the popularity
and established goodwill of petitioners business. This is an unfair advantage, a free ride on
anothers goodwill.

DLPS
 LYCEUM OF THE PHILIPPINES vs. COURT OF APPEALS (and other Lyceum Schools)
GR No. 101897 / March 5, 1993 / J. Feliciano
Petition for review of the decision of the CA

Doctrine:

Lyceum is a generic name. When other schools use Lyceum as part of their schools name, it is not a
deceptive use thereof relative to Lyceum of the Philippines. One must evaluate corporate names in their
entirety and when the name of the petitioner is juxtaposed with the names of the respondents, they are not
regarded as identical or confusingly or deceptively similar with each other.

Facts:
Petitioner had sometime before commenced in the SEC a proceeding against Lyceum of Baguio to
require it to change its corporate name and adopt another name not similar to or identical with that of
petitioner.
SEC Commissioner Sulit held that corporate name of petitioner and Lyceum of Baguio were
substantially identical and that petitioner had registered its name ahead of L. of Baguio.
Petitioner then wrote all the educational institutions it could find using the word Lyceum as part of
their corporate name, and advised them to discontinue such use of Lyceum.
Petitioner instituted before the SEC a case to enforce its propriety right to the word Lyceum.
SEC Officer sustained petitioners claim to an exclusive right to use the word Lyceum.
SEC En Banc reversed said decision. It ruled that the attaching of geographical names to the word
Lyceum served sufficiently to distinguish the schools from one another and the schools are physically
quite remote from each other.
CA affirmed SEC En Banc.

Issue:

Whether or not Lyceum can be appropriated by the petitioners to the exclusion of others No.

SC Ruling:
Confusion and deception are effectively precluded by the appending of geographic names to the word
Lyceum.
Lyceum is a Latin word for the Greek lykeion which referred to a locality on the river Illissius in
Ancient Athens.
Lyceum is in fact as generic in character as the word university.
The Doctrine of Secondary Meaning [Test: WON the use of the name has been for such length of
time and with exclusivity as to have become associated or identified with the petitioner in the mind
of the general public?]. Petitioner failed to prove that it had been using the same word all by itself to
the exclusion of others. One of the respondents (Western Pangasinan Lyceum) used the term
Lyceum 17 years before the petitioner registered its own corporate name.
Petitioners use of the word Lyceum was neither the first use of that term in the Philippines nor an
exclusive use thereof.

DLPS
 CLAVECILLA RADIO SYSTEM vs. ANTILLON
GR No. L-22238 / February 18, 1987 / J. Regala
Appeal from an order of dismissal rendered by CFI Misamis Oriental

Doctrine:

The residence of a corporation is the place where its principal office is established. It can be sued in that place,
not in the place where its branch office is located.

Facts:
This is a case for damages based upon tort.
Respondent filed a complaint against petitioner alleging that the message addressed to the petitioner
was filed at Petitioners Bacolod Branch Office for transmittal thru its branch office in CDO. So the
petitioner suffered damages.
Petitioner filed a Motion to Dismiss on the grounds that the complaint states no cause of action and
the venue is improperly laid.
Lower Court held that petitioner may be sued either in Manila (principal office) or in CDO.

SC Ruling:
Venue was improperly laid
Settled is the principle in corporation law that the residence of a corporation is the place where its
principal office is established.
Moreover, laying of the venue of an action is not left to plaintiffs caprice because the matter is
regulated by the Rules of Court.

DLPS
 HYATT ELEVATORS AND ESCALATORS CORP. vs. GOLDSTAR ELEVATORS, PHILS, Inc.
GR No. 161026 / October 24, 2005 / J. Panganiban
Petition for review on certiorari of the decision and resolution of the CA

Doctrine:

The residence or domicile of a juridical person is fixed by the law creating or recognizing it.

Facts:
Hyatts principal office was originally located in Makati until it moved to Mandaluyong City. (Hyatt
did not change its Articles of Incorporation when it moved to Mandaluyong)
Hyatt filed a case against LG Industrial Systems Co. and LG International Corporation for unfair trade
practices and damages. Hyatt suffered damages worth P120M.
Goldstar was being utilized by LG in perpetuating their unlawful and unjustified acts against Hyatt.
So Hyatt had to amend its complaint to include respondent.
Respondent filed a Motion to Dismiss on the following grounds: 1) Venue was improperly laid as
neither Hyatt nor Goldstar reside in Mandaluyong City where the original case was filed 2) failure to
state a cause of action.
Trial Court denied MTD
CA ruled Trial Court committed error. Venue was improper because none of the litigants resided in
Mandaluyong.

Issue:

Whether or not Hyatts Articles of Incorporation was controlling for purposes of determining the proper venue
YES.

SC Ruling:
A corporation is in a metaphysical sense a resident of the place where its principal office is located as
stated in the articles of incorporation.
For purposes of venue, residence is synonymous with domicile.
The residence or domicile of a juridical person is fixed by the law creating or recognizing it.
Section 14(3) of the Corporation Code- the place where the principal office of the corporation is to be
located is one of the required contents of the articles of incorporation, which shall be filed with the
SEC
Petition is denied.

DLPS