HYATT ELEVATORS AND ESCALATORS CORPORATION vs. GOLDSTAR ELEVATORS, PHILS., INC.

G.R. No. 161026; October 24, 2005

FACTS:

Petitioner and Respondent are both engaged in the business of importing, installing and maintaining elevators and escalators. Hyatt
filed an unfair competition case against LG and Goldstar alleging that it was appointed as the sole distributor of LG elevators and
escalators.

Goldstar moved to dismiss the case alleging that venue was improperly laid as neither the Hyatt, LG or Goldstar itself resided in
Mandaluyong city where the case was originally filed. The RTC denied the motion. The CA dismissed the case and held that Makati
was the principal place of business of both respondent and petitioner, as stated in the latter’s Articles of Incorporation, that place was
controlling for purposes of determining the proper venue.

ISSUE:

Whether or not the “residence” of the corporation is the same one as stated in the AOI.

HELD:

Yes. Although the Rules of Court do not provide that when the plaintiff is a corporation, the complaint should be filed in the location of
its principal office as indicated in its articles of incorporation, jurisprudence has, however, settled that the place where the principal
office of a corporation is located, as stated in the articles, indeed establishes its residence. This ruling is important in determining the
venue of an action by or against a corporation, as in the present case.

Young Auto Supply vs CA Case Digest

Young Auto Supply vs. Court of Appeals
[GR 104175, 25 June 1993]

Facts: On 28 October 1987, Young Auto Supply Co. Inc. (YASCO) represented by Nemesio Garcia, its president, Nelson Garcia and
Vicente Sy, sold all of their shares of stock in Consolidated Marketing & Development Corporation (CMDC) to George C. Roxas. The
purchase price was P8,000,000.00 payable as follows: a down payment of P4,000,000.00 and the balance of P4,000,000.00 in four
postdated checks of P1,000,000.00 each. Immediately after the execution of the agreement, Roxas took full control of the four markets
of CMDC. However, the vendors held on to the stock certificates of CMDC as security pending full payment of the balance of the purchase
price. The first check of P4,000,000.00, representing the down payment, was honored by the drawee bank but the four other checks
representing the balance of P4,000,000.00 were dishonored. In the meantime, Roxas sold one of the markets to a third party. Out of the
proceeds of the sale, YASCO received P600,000.00, leaving a balance of P3,400,000.00.

Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to the proceeds of the sale of the CMDC shares to Nemesio
Garcia. On 10 June 1988, YASCO and Garcia filed a complaint against Roxas in the Regional Trial Court, Branch 11, Cebu City, praying
that Roxas be ordered to pay them the sum of P3,400,000.00 or that full control of the three markets be turned over to YASCO and
Garcia. The complaint also prayed for the forfeiture of the partial payment of P4,600,000.00 and the payment of attorney's fees and costs.
Failing to submit his answer, and on 19 August 1988, the trial court declared Roxas in default. The order of default was, however, lifted
upon motion of Roxas. On 22 August 1988, Roxas filed a motion to dismiss. After a hearing, wherein testimonial and documentary
evidence were presented by both parties, the trial court in an Order dated 8 February 1991 denied Roxas' motion to dismiss. After
receiving said order, Roxas filed another motion for extension of time to submit his answer. He also filed a motion for reconsideration,
which the trial court denied in its Order dated 10 April 1991 for being pro-forma. Roxas was again declared in default, on the ground that
his motion for reconsideration did not toll the running of the period to file his answer. On 3 May 1991, Roxas filed an unverified Motion to
Lift the Order of Default which was not accompanied with the required affidavit of merit. But without waiting for the resolution of the motion,
he filed a petition for certiorari with the Court of Appeals. The Court of Appeals dismissal of the complaint on the ground of improper
venue. A subsequent motion for reconsideration by YASCO was to no avail. YASCO and Garcia filed the petition.

Issue: Whether the venue for the case against YASCO and Garcia in Cebu City was improperly laid.

Held: A corporation has no residence in the same sense in which this term is applied to a natural person. But for practical purposes, 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.
The Corporation Code precisely requires each corporation to specify in its articles of incorporation the "place where the principal office of
the corporation is to be located which must be within the Philippines." The purpose of this requirement is to fix the residence of a
corporation in a definite place, instead of allowing it to be ambulatory. Actions cannot be filed against a corporation in any place where
the corporation maintains its branch offices. The Court ruled that to allow an action to be instituted in any place where the corporation
has branch offices, would create confusion and work untold inconvenience to said entity. By the same token, a corporation cannot be
allowed to file personal actions in a place other than its principal place of business unless such a place is also the residence of a co-
plaintiff or a defendant. With the finding that the residence of YASCO for purposes of venue is in Cebu City, where its principal place of
business is located, it becomes unnecessary to decide whether Garcia is also a resident of Cebu City and whether Roxas was in estoppel
from questioning the choice of Cebu City as the venue. The decision of the Court of Appeals was set aside.
Ang Mga Kaanib vs. Iglesia (December 12, 2001)

FACTS: Respondent Iglesia ng Dios Kay Cristo Jesus, Haligi at Suhay ng Katotohanan (Church of God in Christ Jesus, the Pillar and
Ground of Truth), is a non-stock religious society or corporation registered in 1936. Sometime in 1976, one Eliseo Soriano and several
other members of respondent corporation disassociated themselves from the latter and succeeded in registering on March 30, 1977 a
new non-stock religious society or corporation, named Iglesia ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan. Respondent
corporation filed with the SEC a petition to compel the Iglesia ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan to change its
corporate name to another name that is not similar or identical to any name already used by a corporation, partnership or association
registered with the Commission. Petitioner is compelled to change its corporate name and be barred from using the same or similar
name on the ground that the same causes confusion among their members as well as the public. SEC rendered a decision ordering
petitioner to change its corporate name. The Court of Appeals rendered the assailed decision affirming the decision of the SEC En
Banc.

ISSUE: Whether the court of appeals failed to properly appreciate the scope of the constitutional guarantee on religious freedom

RULING: The additional words "Ang Mga Kaanib " and "Sa Bansang Pilipinas, Inc." in petitioner's name are, as correctly observed by
the SEC, merely descriptive of and also referring to the members, or kaanib, of respondent who are likewise residing in the Philippines.
These words can hardly serve as an effective differentiating medium necessary to avoid confusion or difficulty in distinguishing
petitioner from respondent. This is especially so, since both petitioner and respondent corporations are using the same acronym —
H.S.K.; not to mention the fact that both are espousing religious beliefs and operating in the same place. The fact that there are other
non-stock religious societies or corporations using the names Church of the Living God, Inc., Church of God Jesus Christ the Son of
God the Head, Church of God in Christ & By the Holy Spirit, and other similar names, is of no consequence. It does not authorize the
use by petitioner of the essential and distinguishing feature of respondent's registered and protected corporate name. Ordering
petitioner to change its corporate name is not a violation of its constitutionally guaranteed right to religious freedom. In so doing, the
SEC merely compelled petitioner to abide by one of the SEC guidelines in the approval of partnership and corporate names, namely its
undertaking to manifest its willingness to change its corporate name in the event another person, firm, or entity has acquired a prior
right to the use of the said firm name or one deceptively or confusingly similar to it. The instant petition for review is DENIED. The
appealed decision of the Court of Appeals is AFFIRMED in toto.
 INDUSTRIAL REFRACTORIES CORPORATION OF THE PHILIPPINES vs. COURT OF APPEALS, SECURITIES AND EXCHANGE
COMMISSION and REFRACTORIES CORPORATION OF THE PHILIPPINES

G.R. No. 122174, October 3, 2002

Facts:

Respondent Refractories Corporation of the Philippines (RCP) is a corporation duly organized on October 13, 1976. On June 22, 1977,
it registered its corporate and business name with the Bureau of Domestic Trade.

Petitioner IRCP was incorporated on August 23, 1979 originally under the name "Synclaire Manufacturing Corporation". It amended its
Articles of Incorporation on August 23, 1985 to change its corporate name to "Industrial Refractories Corp. of the Philippines".

Both companies are the only local suppliers of monolithic gunning mix.

Respondent RCP then filed a petition with the Securities and Exchange Commission to compel petitioner IRCP to change its corporate
name.

The SEC rendered judgment in favor of respondent RCP.

Petitioner appealed to the SEC En Banc. The SEC En Banc modified the appealed decision and the petitioner was ordered to delete or
drop from its corporate name only the word "Refractories".

Petitioner IRCP filed a petition for review on certiorari to the Court of Appeals and the appellate court upheld the jurisdiction of the SEC
over the case and ruled that the corporate names of petitioner IRCP and respondent RCP are confusingly or deceptively similar, and
that respondent RCP has established its prior right to use the word "Refractories" as its corporate name.

Petitioner then filed a petition for review on certiorari

Issue:

Are corporate names Refractories Corporation of the Philippines (RCP) and "Industrial Refractories Corp. of the Philippines"
confusingly and deceptively similar?

Ruling:

Yes, the petitioner and respondent RCP’s corporate names are confusingly and deceptively similar.
Further, Section 18 of the Corporation Code expressly prohibits the use of a corporate name which is "identical or deceptively or
confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing
or contrary to existing laws". The policy behind said prohibition is to avoid fraud upon the public that will have occasion to deal with the
entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration and supervision over
corporation.

The Supreme Court denied the petition for review on certiorari due for lack of merit.

Industrial Refractories Corporation of the Philippines vs. CA

[GR 122174, 3 October 2002]

Facts: Refractories Corporation of the Philippines (RCP) is a corporation duly organized on 13 October 1976 for the purpose of engaging
in the business of manufacturing, producing, selling, exporting and otherwise dealing in any and all refractory bricks, its by-products and
derivatives. On 22 June 1977, it registered its corporate and business name with the Bureau of Domestic Trade. Industrial Refractories
Corp. of the Philippines (IRCP) on the other hand, was incorporated on 23 August 1979 originally under the name "Synclaire
Manufacturing Corporation". It amended its Articles of Incorporation on 23 August 1985 to change its corporate name to "Industrial
Refractories Corp. of the Philippines". It is engaged in the business of manufacturing all kinds of ceramics and other products, except
paints and zincs. Both companies are the only local suppliers of monolithic gunning mix. Discovering that IRCP was using such corporate
name, RCP filed on 14 April 1988 with the Securities and Exchange Commission (SEC) a petition to compel IRCP to change its corporate
name on the ground that its corporate name is confusingly similar with that of RCP's such that the public may be confused or deceived
into believing that they are one and the same corporation. The SEC decided in favor of RCP in its judgment of 23 July 1993. IRCP
appealed to the SEC En Banc, arguing that it does not have any jurisdiction over the case, and that RCP has no right to the exclusive
use of its corporate name as it is composed of generic or common words. In its Decision dated 23 July 1993, the SEC En Banc modified
the appealed decision in that IRCP was ordered to delete or drop from its corporate name only the word "Refractories". IRCP elevated
the decision of the SEC En Banc through a petition for review on certiorari to the Court of Appeals which then rendered the decision,
denying to give due course the petition filed by IRCP by upholding the jurisdiction of the SEC over the case, and ruling that the corporate
names of IRCP and RCP are confusingly or deceptively similar, and that RCP has established its prior right to use the word "Refractories"
as its corporate name. The appellate court also found that the petition was filed beyond the reglementary period. IRCP filed the petition
for review on certiorari.

Issue: Whether the corporate names of IRCP and RCP are confusingly similar.

Whether the generic word rule would apply to support IRCP’s cause.

Held:
1. The jurisdiction of the SEC is not merely confined to the adjudicative functions provided in Section 5 of PD 902-A, as amended. It is
the SEC's duty to prevent confusion in the use of corporate names not only for the protection of the corporations involved but more so for
the protection of the public, and it has authority to de-register at all times and under all circumstances corporate names which in its
estimation are likely to generate confusion. Section 18 of the Corporation Code expressly prohibits the use of a corporate name which is
"identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing laws". The policy behind the foregoing prohibition is to avoid fraud upon the public
that will have occasion to deal with the entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of
administration and supervision over corporation. Pursuant thereto, the Revised Guidelines in the Approval of Corporate and Partnership
Names 25 specifically requires that: (1) a corporate name shall not be identical, misleading or confusingly similar to one already registered
by another corporation with the Commission; and (2) if the proposed name is similar to the name of a registered firm, the proposed name
must contain at least one distinctive word different from the name of the company already registered. To fall within the prohibition of the
law, two requisites must be proven: (1) that the complainant corporation acquired a prior right over the use of such corporate name; and
(2) the proposed name is either: (a) identical, or (b) deceptively or confusingly similar to that of any existing corporation or to any other
name already protected by law; or (c) patently deceptive, confusing or contrary to existing law. As regards the first requisite, it has been
held that the right to the exclusive use of a corporate name with freedom from infringement by similarity is determined by priority of
adoption. Herein, being the prior registrant, RCP has acquired the right to use the word "Refractories" as part of its corporate name. Anent
the second requisite, in determining the existence of confusing similarity in corporate names, the test is whether the similarity is such as
to mislead a person using ordinary care and discrimination and the Court must look to the record as well as the names themselves.
Herein, the only word that distinguishes IRCP from RCP is the word "Industrial" which merely identifies a corporation's general field of
activities or operations. The two corporate names are patently similar that even with reasonable care and observation, confusion might
arise. It must be noted that both cater to the same clientele, i.e., the steel industry. In fact, the SEC found that there were instances when
different steel companies were actually confused between the two, especially since they also have similar product packaging.

2. Refractories are structural materials used at high temperatures to [sic] industrial furnaces. They are supplied mainly in the form of brick
of standard sizes and of special shapes. Refractories also include refractory cements, bonding mortars, plastic firebrick, castables,
ramming mixtures, and other bulk materials such as dead-buried grain magneside, chrome or ground ganister and special clay. While
the word "refractories" is a generic term, its usage is not widespread and is limited merely to the industry/trade in which it is used, and its
continuous use by RCP for a considerable period has made the term so closely identified with it. Moreover, IRCP's appropriation of RCP's
corporate name cannot find justification under the generic word rule. A contrary ruling would encourage other corporations to adopt
verbatim and register an existing and protected corporate name, to the detriment of the public.

LYCEUM OF THE PHILS. V. CA 219 SCRA 610

FACTS: 1. Petitioner had sometime commenced before in the SEC a complaint against Lyceum of Baguio, to require it to
change its corporate name and to adopt another name not similar or identical with that of petitioner. SEC decided in
favor of petitioner. Lyceum of Baguio filed petition for certiorari but was denied for
lack of merit.

2. Armed with the resolution of the Court, petitioner instituted before the SEC to compel private respondents, which are also educational

institutions, to delete word “Lyceum” from their corporate names and permanently to enjoin them from using such as part of their

respective names.

3. Hearing officer sustained the claim of petitioner and held that the word “Lyceum” was capable of appropriation and that petitioner had

acquired an enforceable right to the use of that word.

4. In an appeal, the decision was reversed by the SEC En Banc. They held that the word “Lyceum” to have become identified with

petitioner as to render use thereof of other institutions as productive of consfusion about the identity of the schools concerned in the

mind of the general public.

5. Petitioner went to appeal with the CA but the latter just affirmed the decision of the SEC En Banc.

HELD: Under the corporation code, no corporate name may be allowed by the SEC if the proposed name is identical or deceptively or

confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing

or contrary to existing laws. The policy behind this provision is to avoid fraud upon the public, which would have the occasion to deal

with the entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of administration and supervision

over corporations.

The corporate names of private respondents are not identical or deceptively or confusingly similar to that of petitioner’s. Confusion and

deception has been precluded by the appending of geographic names to the word “Lyceum”. Furthermore, the word “Lyceum” has

become associated in time with schools and other institutions providing public lectures, concerts, and public discussions. Thus, it

generally refers to a school or an institution of learning.

Petitioner claims that the word has acquired a secondary meaning in relation to petitioner with the result that the word, although

originally generic, has become appropriable by petitioner to the exclusion of other institutions.

The doctrine of secondary meaning is a principle used in trademark law but has been extended to corporate names since the right to

use a corporate name to the exclusion of others is based upon the same principle, which underlies the right to use a particular

trademark or tradename. Under this doctrine, a word or phrase originally incapable of exclusive appropriation with reference to an
article in the market, because geographical or otherwise descriptive might nevertheless have been used for so long and so exclusively

by one producer with reference to this article that, in that trade and to that group of purchasing public, the word or phrase has come to

mean that the article was his produce. The doctrine cannot be made to apply where the evidence didn't prove that the business has
 continued for so long a time that it has become of consequence and acquired good will of considerable value such that its art icles and

produce have acquired a well known reputation, and confusion will result by the use of the disputed name.

Petitioner didn't present evidence, which provided that the word “Lyceum” acquired secondary meaning. The petitioner failed to adduce

evidence that it had exclusive use of the word. Even if petitioner used the word for a long period of time, it hadn’t acquired any

secondary meaning in its favor because the appellant failed to prove that it had been using the same word all by itself to the exclusion

of others.
Universal Mills Corporation vs Universal Textile Mills, Inc.

78 SCRA 62 – Business Organization – Corporation Law – Tradenames

In 1953, Universal Textile Mills, Inc. (UTMI) was organized. In 1954, Universal Hosiery Mills Corporation (UHMC) was also organized.
Both are actually distinct corporations but they engage in the same business (fabrics). In 1963, UHMC petitioned to change its name to
Universal Mills Corporation (UMC). The Securities and Exchange Commission (SEC) granted the petition.

Subsequently, a warehouse owned by UMC was gutted by fire. News about the fire spread and investors of UTMI thought that it was
UTMI’s warehouse that was destroyed. UTMI had to make clarifications that it was UMC’s warehouse that got burned. Eventually, UTMI
petitioned that UMC should be enjoined from using its name because of the confusion it brought. The SEC granted UTMI’s petition.
UMC however assailed the order of the SEC as it averred that their tradename is not deceptive; that UTMI’s tradename is qualified by
the word “Textile”, hence, there can be no confusion.

ISSUE: Whether or not the decision of the SEC is correct.

HELD: Yes. There is definitely confusion as it was evident from the facts where the investors of UTMI mistakenly believed that it was
UTMI’s warehouse that was destroyed. Although the corporate names are not really identical, they are indisputably so similar that it can
cause, as it already did, confusion. The SEC did not act in abuse of its discretion when it order UMC to drop its name because there
was a factual evidence presented as to the confusion. Further, when UMC filed its petition for change of corporate name, it made an
undertaking that it shall 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 one similar to it. That promise is still binding upon the corporation and its responsible officers.

Red Line Transportation Co. vs. Rural Transit Co.

GR No. 41570 | Sept. 6, 1934

Facts:
· This is a petition for review of an order of the Public Service Commission granting to the Rural Transit Company, Ltd., a certificate of
public convenience to operate a transportation service between Ilagan in the Province of Isabela and Tuguegarao in the Provin ce of
Cagayan, and additional trips in its existing express service between Manila Tuguegarao.
· On June 4, 1932, Rural Transit filed an application for certification of a new service between Tuguegarao and Ilagan with the Public
Company Service Commission (PSC), since the present service is not sufficient
· Rural Transit further stated that it is a holder of a certificate of public convenience to operate a passenger bus service between Manila
and Tuguegarao
· Red Line opposed said application, arguing that they already hold a certificate of public convenience for Tuguegarao and Ilagan, and
is rendering adequate service. They also argued that granting Rural Transit’s application would constitute a ruinous competition over said
route
· On Dec. 21, 1932, Public Service Commission approved Rural Transit’s application, with the condition that "all the other terms and
conditions of the various certificates of public convenience of the herein applicant and herein incorporated are made a part hereof."
· A motion for rehearing and reconsideration was filed by Red Line since Rural Transit has a pending application before the Court of First
Instance for voluntary dissolution of the corporation
· A motion for postponement was filed by Rural Transit as verified by M. Olsen who swears "that he was the secretary of the Rural Transit
Company, Ltd
· During the hearing before the Public Service Commission, the petition for dissolution and the CFI’s decision decreeing the dissolution
of Rural Transit were admitted without objection
· At the trial of this case before the Public Service Commission an issue was raised as to who was the real party in interest making the
application, whether the Rural Transit Company, Ltd., as appeared on the face of the application, or the Bachrach Motor Company, Inc.,
using name of the Rural Transit Company, Ltd., as a trade name
· However, PSC granted Rural Transit’s application for certificate of public convenience and ordered that a certificate be issued on its
name
· PSC relied on a Resolution in case No. 23217, authorizing Bachrach Motor to continue using Rural Transit’s name as its tradename in
all its applications and petitions to be filed before the PSC. Said resolution was given a retroactive effect as of the date of filing of the
application or April 30, 1930

Issue: Can the Public Service Commission authorize a corporation to assume the name of another corporation as a trade name?

Ruling: NO
· 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 incorporators "constitute a body politic and corporate under the name stated in the certificate."
· A corporation has the power "of succession by its corporate name." It is essential to its existence and 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.
In this case, the order of the commission authorizing the Bachrach Motor Co., Incorporated, to assume the name of the Rural Transit
Co., Ltd. likewise incorporated, as its trade name being void. Accepting the order of December 21, 1932, at its face as granting a
certificate of public convenience to the applicant Rural Transit Co., Ltd., the said order last mentioned is set aside and vacated on the
ground that the Rural Transit Company, Ltd., is not the real party in interest and its application was fictitious