PHILIPPINE TRUST COMPANY vs. Rivera G.R. No. L-19761 Ja !ar" #9$ 19#% STREET$ J.

: Philippine Trust Company, was the assignee in insolvency case of La Cooperativa Naval Filipina, against Marciano Rivera, for the purpose of recovering a balance of P22,500. !CT"# Cooperativa Naval Filipina was $uly incorporate$ un$er the laws of the Philippine with a capital of P%00,000, $ivi$e$ into one thousan$ shares of a par value of P%00 each. !mong the incorporators was Rivera, who subscribe$ for &50 shares representing a value of P&5,000, the remain$er of the stoc' being ta'en by other persons. The articles of incorporation were $uly registere$ in the (ureau of Commerce an$ )n$ustry. )n the course of time the company became insolvent an$ went into the han$s of the Philippine Trust Company an$ by it this action was institute$ to recover one*half of the stoc' subscription of the $efen$ant, which a$mitte$ly has never been pai$. The reason given for the failure of the $efen$ant to pay the entire subscription is, that not long after the Cooperativa ha$ been incorporate$, a meeting of its stoc'hol$ers occurre$, at which a resolution was a$opte$ to the effect that the capital shoul$ be re$uce$ by 50+ an$ the subscribers release$ from the obligation to pay any unpai$ balance of their subscription in e,cess of 50+ of the same. !s a result of this resolution it seems to have been suppose$ that the subscription of the various sharehol$ers ha$ been cancelle$ to the e,tent state$- an$ fully pai$ certificate were issue$ to each sharehol$ers for one*half of his subscription. )t $oes not appear that the formalities prescribe$ in section %. of the Corporation /aw relative to the re$uction of capital stoc' in corporations were observe$, an$ in particular it $oes not appear that any certificate was at any time file$ in the (ureau of Commerce an$ )n$ustry, showing such re$uction. The trial 0u$ge, therefore hel$ that the resolution relie$ upon the $efen$ant was without effect an$ that the $efen$ant was still liable for the unpai$ balance of his subscription. 1ence this petition.

)""23# 4as there a vali$ resolution5 13/6# )t is establishe$ $octrine that subscription to the capital of a corporation constitute a fin$ to which cre$itors have a right to loo' for satisfaction of their claims an$ that the assignee in insolvency can maintain an action upon any unpai$ stoc' subscription in or$er to reali7e assets for the payment of its $ebts. ! corporation has no power to release an original subscriber to its capital stoc' from the obligation of paying for his shares, without a valuable consi$eration for such release- an$ as against cre$itors a re$uction of the capital stoc' can ta'e place only in the manner an un$er the con$itions prescribe$ by the statute or the charter or the articles of incorporation. Moreover, strict compliance with the statutory regulations is necessary. )n the case before us the resolution releasing the sharehol$ers from their obligation to pay 50+ of their respective subscriptions was an attempte$ with$rawal of so much capital from the fun$ upon which the company8s cre$itors were entitle$ ultimately to rely an$, having been effecte$ without compliance with the statutory re9uirements, was wholly ineffectual.

YOUNG AUTO SUPPLY CO vs. CA G.R. No. 1&'17( J! e #($ 199% )UIASON$ J.: FACTS: :n :ctober 2;, %<;., =oung !uto "upply Co. )nc. >=!"C:? represente$ by @emesio Aarcia, its presi$ent, @elson Aarcia an$ Bicente "y, sol$ all of their shares of stoc' in Consoli$ate$ Mar'eting C 6evelopment Corporation >CM6C? to Ro,as in the amount of ;M payable in installments >&M as 6own Payment >6P? an$ then & more payments of %M each?. 6P chec' was honore$ by the $rawee ban' but the four other chec's representing the balance were $ishonore$. )n the meantime, Ro,as sol$ one of the mar'ets to a thir$ party. :ut of the procee$s of the sale, =!"C: receive$ PD00,000.00. Total $ebt E F.&M. "ubse9uently, @elson Aarcia an$ Bicente "y assigne$ all their rights an$ title to the procee$s of the sale of the CM6C shares to @emesio Aarcia. :n Gune %0, %<;;, petitioners file$ a complaint against Ro,as in the Regional Trial Court, (ranch %%, Ce*! Ci+", praying that Ro,as be or$ere$ to pay petitioners the sum of F.&M or that full control of the three mar'ets be turne$ over to =!"C: an$ Aarcia. Ro,as file$ two motions for e,tension of time to submit his answer. (ut $espite sai$ motion, he faile$ to $o so causing petitioners to file a motion to have him $eclare$ in $efault. Trial court $eclare$ Ro,as in $efault. The or$er of $efault was, however, lifte$ upon motion of Ro,as. :n !ugust 22, %<;;, Ro,as file$ a motion to $ismiss on the groun$s that# %. The complaint $i$ not state a cause of action $ue to non*0oin$er of in$ispensable parties2. The claim or $eman$ set forth in the complaint ha$ been waive$, aban$one$ or otherwise e,tinguishe$an$ F. The venue was improperly lai$

Trial court $enie$ Ro,as8 motion to $ismiss. !fter receiving sai$ or$er, Ro,as file$ another motion for e,tension of time to submit his answer. 1e also file$ a motion for reconsi$eration, which the trial court $enie$ in its :r$er $ate$ !pril %0, %<<% for being pro-forma. Ro,as was again $eclare$ in $efault, on the groun$ that his motion for reconsi$eration $i$ not toll the running of the perio$ to file his answer. Ro,as file$ an unverifie$ Motion to /ift the :r$er of 6efault which was not accompanie$ with the re9uire$ affi$avit or merit. (ut without waiting for the resolution of the motion, he file$ a petition for certiorari with the Court of !ppeals. C! sustaine$ trial court with regar$ to first 2 groun$s, but $ismisse$ the complaint for improper venue. MR was $enie$. 1ence this petition. ISSUE# 4as there improper venue5 @:. HELD: )n hol$ing that the venue was improperly lai$ in Cebu City, the Court of !ppeals relie$ on the a$$ress of =!"C:, as appearing in the 6ee$ of "ale $ate$ :ctober 2;, %<;., which is H@o. %.0; 6ominga "treet, Pasay City.H This was the same a$$ress written in =!"C:8s letters an$ several commercial $ocuments in the possession of Ro,as )n the case of Aarcia, the Court of !ppeals sai$ that he gave Pasay City as his a$$ress in three letters which he sent to Ro,as8 brothers an$ sisters. The appellate court hel$ that Ro,as was le$ by petitioners to believe that their resi$ence is in Pasay City an$ that he ha$ relie$ upon those representations. T,e Co!r+ o- A..ea/s erre0 i ,o/0i 1 +,a+ +,e ve !e 2as i3.ro.er/" /ai0 i Ce*! Ci+". )n the Regional Trial Courts, all personal actions are commence$ an$ trie$ in the province or city where the defendant or any of the defendants resides or may e fo!nd" or where the #$aintiff or any of the #$aintiffs resides" at the e$ection of the #$aintiff. There are two plaintiffs in the case# a natural person an$ a $omestic corporation. (oth plaintiffs aver in their complaint that they are resi$ents of Cebu City

A cor#oration has no residence in the same sense in which this term is a##$ied to a nat!ra$ #erson. %!t for #ractica$ #!r#oses" a cor#oration is in a meta#hysica$ sense a resident of the #$ace where its #rinci#a$ office is $ocated as stated in the artic$es of incor#oration. The Corporation Co$e precisely re9uires each corporation to specify in its articles of incorporation the Hplace where the principal office of the corporation is to be locate$ which must be within the PhilippinesH. The purpose of this re9uirement is to fi, the resi$ence of a corporation in a $efinite place, instea$ of allowing it to be ambulatory. Why not on branch offices? The Court rule$ that to allow an action to be institute$ in any place where the corporation has branch offices, woul$ create confusion an$ wor' untol$ inconvenience to sai$ entity. (y the same to'en, a corporation cannot be allowe$ to file personal actions in a place other than its principal place of business unless such a place is also the resi$ence of a co*plaintiff or a $efen$ant. )f it was Ro,as who sue$ =!"C: in Pasay City an$ the latter 9uestione$ the venue on the groun$ that its principal place of business was in Cebu City, Ro,as coul$ argue that =!"C: was in estoppel because it misle$ Ro,as to believe that Pasay City was its principal place of business. (ut this is not the case before us.

ARMCO STEEL CORPORATION 4O5 THE PHILIPPINES6 vs. SEC$ ARMCO STEEL CORPORATION 4o- O,io$ U.S.A.6 a 0 ARMCO MARSTEEL ALLOY CORPORATION G.R. No. L-5458 !ecember "#$ %#8& 5ACTS7 !RMC: "teel Corporation, organi7e$ in :hio, 2.".!., obtaine$ its tra$emar' from the Philippine Patent :ffice in %<.% consisting of the wor$ !RMC: an$ file$ an !ffi$avit for the 2se of the tra$emar' which was subse9uently accepte$. !RMC:*:hio purchase$ &0+ of the capital stoc' of !RMC: Marsteel !lloy Corporation which was incorporate$ in %<.2, change$ its name to !MRC: Marsteel !lloy Corporation >!RMC:*Marsteel?. )ts !rticles of )ncorporation states as one of its purposes# I to man'fact're$ process(an) )eal in all *in)s of form$ an) combinations of iron$ steel or other metals an) all or any pro)'ct or aticle partic'larly consitin+ of iron$ steel or other metals.., !RMC: "teel Corporation was incorporate$ in the Philippines in %<.F an$ among its purposes in its !rticles of )ncorporation inclu$e# Ito contract, fabricate..manufactureJregar$ing pipelines, steel frames.K This le$ !RMC:*:hio an$ !RMC:*Marsteel to file a petition with the "3C to compel !RMC:*Philippines to change its corporate name on the groun$ that it is very similar, if not e,actly the same as petitionersL. The "3C grante$ the petition an$ or$ere$ !RMC: "T33/ C:RP:R!T):@ to ta'e out I!RMC:K an$ substitute another wor$ in lieu thereof. Respon$ent file$ a motion for reconsi$eration which was $enie$. Respon$ent appeale$ to the C! but was $ismisse$ being perfecte$ beyon$ the reglementary perio$. )n %<.D, respon$ent amen$e$ its articles of incorporation an$ change$ its name to !RMC: "tructures, )nc. which was file$ an$ approve$ by the "3C. "3C issue$ an or$er re9uiring respon$ent to comply with its $ecision to which respon$ent file$ a motion an$ manifestation stating that it ha$ alrea$y change$ its name in substantial compliance to sai$ or$er. ! comment was file$ stating that respon$entLs change of corporate name was not $one in goo$ faith an$ not in compliance with the or$er an$ that a $rastic

motion shoul$ be file$ to cite respon$ent, its $irectors an$ officers in contempt for $isobeying the or$ers of "3C. !fter the parties submitte$ their respective memoran$a, there was a fin$ing in another or$er that respon$ent $i$ not ma'e the proper $isclosure of circumstances when it amen$e$ its !:). !ppeal was ma$e to "3C 3n (anc which $ismisse$ the appeal for lac' of merit. 1ence, this petition. ISSUES7 %. 4hether or not petitionersL name is similar, if not i$entical with that of respon$ent 2. 4hether or not there was substantial compliance with the "3C :r$er for petitioner to remove !RMC: an$ substitute another wor$ in lieu thereof HEL8# The petition is 6)"M)""36 or lac' of merit. (y merely loo'ing at the names, it is clear that the name of petitioner !RMC: "T33/ C:RP:R!T):@ >of the Philippines? an$ that of respon$ent !RMC: "T33/ C:RP:R!T):@ >of :hio, 2.".!.? are not only similar but i$entical an$ the wor$s Iof :hio, 2.".!.K are use$ only to i$entify petitioner from respon$ent as a 2" corporation. )t is un$isputable that !RMC: "T33/ :1): having patente$ !RMC: as part of its tra$emar' on its steel pro$ucts, is entitle$ to protection in its use in the Philippines. The two respon$ent companies have the right to e,clusive use an$ en0oyment of the sai$ term. Petitioner not only has an i$entical anme but is also in the similar line of business. People who are buying might be le$ to believe that such pro$ucts are manufacture$ by respon$ent. The amen$ment in the corporate name of petitioner is not in substantial compliance with the "3C :r$er. )t was the removal of the wor$ !RMC: which was or$ere$. 3ven if such change in name was erroneously accepte$ by "3C, the same cannot legali7e what is clearly unauthori7e$. 1a$ petitioner reveale$ that it amen$e$ its corporate name $ue to the sai$ :r$er, such new name coul$ not have been accepte$ an$ approve$ by the persons in0charge of the registration. The actuations of petitioner are far from regular, much less than goo$ faith.

L"9e!3 o- +,e P,i/i..i es vs. Co!r+ o- A..ea/s$ e+. a/. G.R. No. % %8#& -arch 5$ %##. 5ACTS7 Petitioner /yceum of the Philippines, )nc. is an e$ucational institution $uly registere$ with the "3C in "eptember %<50 an$ use$ the sai$ name ever since. )n the late %<.0Ls, petitioner commence$ a procee$ing with the "3C re9uiring /yceum of (aguio to change its corporate name an$ a$opt another name not so similar to or i$entical with petitionerLs. !ssociate Commisioner "ulit hel$ that the names were substantially i$entical $ue to the presence of the $ominant wor$ I/yceumK an$ that petitioner registere$ ahea$ of /yceum of (aguio. /yceum of (aguio assaile$ the sai$ or$er before the "C but was $enie$ for lac' of merit. )n A.R. /*&D5<5, petitioner wrote all e$ucational institutions using the wor$ /=C32M as part of their corporate name an$ a$vise$ them to $iscontinue the use of such wor$. 4hen such recourse faile$, petitioner institute$ a case with the "3C to enforce its allege$ proprietary right to use the wor$ /=C32M. The "3C 1earing officer sustaine$ petitionersL claim an$ hel$ that petitioner ac9uire$ an enforceable an$ e,clusive right to the use of such wor$. The respon$ents appeale$ to the "3C 3n (anc which reverse$ the $ecision of the 1earing :fficer an$ rule$ that the attaching of geographical names to the wor$ /=C32M sufficiently $istinguishe$ the schools from one another. Petitioner appeale$ to the Court of !ppeals which affirme$ the $ecision an$ $enie$ the motion for reconsi$eration. 1ence, this petition. ISSUE7 4hether or not petitioner has use$ the wor$ /=C32M for such length of time an$ with such e,clusivity as to have become associate$ or i$entifie$ with the petitioner institution HEL8# @o. Petition is 63@)36. %. !s to the etymology of the wor$ /=C32M# The Court rule$ that it is a /atin wor$ for the Aree' wor$ ly'eion which referre$ to a locality on the river a$orne$ with fountains an$ buil$ings. )n time, the wor$ /yceum became associate$ with schools, institutions provi$ing lectures an$ public $iscussions, /yceum generally refers to a school or an institution of learning an$ in fact as generic in character as the wor$ IuniversityK. )t is unnatural to use this wor$ to $esignate an institution of learning. 2. !s to the $octrine of secon$ary meaning# Petitioner claims that the $octrine of secon$ary meaning is applicable to their case. "uch $octrine means that when a wor$ or phrase with reference to an article on the mar'et or otherwise $escriptive has been use$ for so long an$ so e,clusively by one pro$ucer with reference to his article, the wor$ or phrase has come to mean that the article was his pro$uct. 3vi$ence $i$ not prove that the business of the petitioner has continue$ for so long a time that it has become of conse9uence an$ ac9uire$ a goo$ will of consi$erable value an$ that its articles an$ pro$uce have ac9uire$ a well* 'nown reputation an$ confusion will result by the use of the $ispute$ name by the $efen$ants. )t was settle$ by the court that the $octrine cannot be applie$ in the present case because no evi$ence was ever presente$ to prove that petitioner has satisfie$ the aforementione$ re9uisites. The fact along that /yceum has been using the wor$ /=C32M for a long time $i$ not amount to mean that the sai$ wor$ ha$ alrea$y ac9uire$ secon$ary meaning in its favor because appellant faile$ to prove that it ha$ been using the wor$ all by itself to the e,clusion of others. @o evi$ence was also presente$ to prove that confusion will surely arise if such wor$ will be use$ by other e$ucational institutions. :ne of the private respon$ents, use$ the term /yceum %. years before petitioner registere$ its own corporate name. )f any institution ha$ ac9uire$ the e,clusive right to use /=C32M, it woul$ have been 4estern Pangasinan /yceum although its recor$s were $estroye$ $uring 4orl$ 4ar )). Petitioner is not entitle$ to a legally enforceable an$ e,clusive right to use the wor$ /=C32M. :ther institutions may use /=C32M as part of their corporate names. To $etermine whether a given corporate name is Ii$enticalK or Iconfusingly or $eceptively similarK with another entityLs corporate name, it is not enough to ascertain the presence of the wor$ I/yceumK. :ne must evaluate the corporate names in their entirety an$ when the name of petitioner is 0u,tapose$ with respon$entsL, they are not reasonably regar$e$ as confusingly or $eceptively similar.

P,i/i.s E:.or+ ;.<. e+. a/. vs. CA$ SEC a 0 S+a 0ar0 P,i/i.s Cor.ora+io G.R. No. #/%/% Febr'ary "%$ %##" 5ACTS7 Philips 3,port (.B. >P3(B? is a foreign corporation organi7e$ un$er the laws of @etherlan$s in %<22. )t is the registere$ owner of the mar's P1)/)P" an$ P1)/)P" "1)3/6 3M(/3M )ssues by the (ureau of Patents, Tra$emar' an$ Technology Transfer. Philips 3,port (.B. has authori7e$ Philips 3lectrical to use the tra$emar's P1)/)P" an$ P1)/)P" "1)3/6 3M(/3M. Philips 3lectrical belongs to the Philips Aroup of Companies, incorporate$ in the Philippines in %<5D an$ is engage$ in the $evelopment, manufacture an$ $ealing of electrical pro$ucts. :n the other han$, respon$ent "tan$ar$ Philips Corporation was organi7e$ in %<;2 an$ its pro$ucts consist of chain rollers, belts, bearing an$ the li'e. 1owever, its !rticles of )ncorporation provi$es that its primary purpose inclu$es# I0o b'y$ sell$ barter$ tra)e$ man'fact're$ import$ e1port or other2ise ac3'ire 1 1 1 electrical 2irin+ )evices$ electrical component parts$ electrical s'pplies an) other merchan)ise., Petitioners file$ a letter with the "ecurities an$ 3,change Commission for the cancellation of the wor$ P1)/)P" from respon$entsL corporate name. 1owever, respon$ent refuse$ to $o the same so petitioners file$ a petition praying for the issuance of a writ of preliminary in0unction claiming that their use of the wor$ P1)/)P" amounts to infringement an$ a clear violation of petitionersL e,clusive right to use the same consi$ering that they are engage$ in the same business. Respon$ent conten$e$ that P3(B has no legal capacity to sue an$ that they are not engage$ in the same business because petitioner sells electrical pro$ucts while they sell chain rollers, belts, bearing an$ cutting saw. The "3C 1earing :fficer rule$ against the issuance of the preliminary in0unction an$ $ismisse$ the petition for lac' of merit hol$ing that the removal of the wor$ P1)/)P" can only be $one when the corporate names in 9uestion are i$entical an$ in the present case there is no confusing similarity between the two names.

"3C 3n (anc affirme$ the $ismissal, so petitioner file$ a petition for review on certiorari with the "C which was referre$ to the Court of !ppeals. The C! $ismisse$ the petition hol$ing that the pro$ucts sol$ by the parties are unrelate$ an$ non*competing. The motion for reconsi$eration of petitioner was li'ewise $enie$. 1ence, this petition. ISSUE7 4hether or not the name P1)/)P" in respon$entsL corporate name shoul$ be cancelle$ HEL87 =es. The $ecision appeale$ from is "3T !")63. %. !s to corporate name being a property right# The "C hel$ that a corporationLs right to use its tra$e name is a property right, a right in rem which cannot be $efeate$ or impaire$ by subse9uent appropriation by another corporation in the same fiel$. ! name is necessary to the very e,istence of the corporation. )t must have a name by which it coul$ sue, be sue$ an$ $o all legal acts. The right to use a corporate name is as much a part of the corporate franchise as any other privilege grante$. Moreover, a corporation cannot use a corporate name in violation of the rights of others 0ust as much as how an in$ivi$ual cannot use a name legally ac9uire$ so as to mislea$ the public an$ in0ure another. >!rmington vs. Palmer? 2. !s to the statutory prohibition in the Corporation Co$e re corporate name# )t was hel$ by the Court that "ec. %; of the Corporation Co$e e,pressly provi$es that, 4No corporate name may be allo2e) 2hich is i)entical or )eceptively or conf'sin+ly similar to that of any e1istin+ corporation or to any other name alrea)y protecte) by la2 or is patently )eceptive$ conf'sin+ or contrary to e1istin+ la2., There are two >2? re9uisites for the statutory prohibition to apply# %? that the complainant corporation ac9uire$ a prior right over the use of such corporate name2? that the propose$ name is either a? i$entical- or b? $eceptively or confusingly similar to that of any e,isting corporation or to any other name alrea$y protecte$ by law- or c? patently $eceptive, confusing or contrary to e,isting law. The two re9uisites are present in the case at bar. P3(B has been using the tra$emar' since %<22 while Philips

3lectrical was incorporate$ in the Philippines in %<5D. :n the other han$, respon$ent corporation was only issue$ a certificate of registration in %<;2, 2D years later. /astly, petitionersL corporate names are Philips 3,port (.B., Philips 3lectrical an$ Philips )n$ustrial 6evelopment which lea$s one to conclu$e that P1)/)P" is the $ominant wor$ in the companies they are affiliate$ with. Proof of actual confusion nee$ not be shown. )t suffices that confusion is probable or li'ely to occur. F. !s to the similarity in the businesses they are engage$ in# The Court hel$ that although respon$ent $oes not claim to be engage$ in selling electrical pro$ucts, the mere fact that its its !rticles of )ncorporation provi$es that its primary purpose inclu$es# I0o b'y$ sell$ barter$ tra)e$ man'fact're$ import$ e1port or other2ise ac3'ire 1 1 1 electrical 2irin+ )evices$ electrical component parts$ electrical s'pplies an) other merchan)ise$, ten$s to show that nothing coul$ prevent respon$ent from $ealing in the same line of business as petitioner an$ ten$s to show its intention to ri$e on the popularity an$ establishe$ goo$ will of petitionersL business throughout the worl$. 4hat is lost sight of is that P1)/)P" is a tra$emar' or tra$e name which was registere$ as far bac' as %<22. Petitioners have ac9uire$ the e,clusive right to its use which must be free from any infringement by similarity. ! corporation has an e,clusive right to the sue of its name which may be protecte$ by in0unction procee$ing upon the theory that it is frau$ on the corporation which has ac9uire$ the right to the name. Parties organi7ing a corporation must choose a name at their peril. 2se of a similar name a$opte$ by another corporation may be prevente$ by the corporation having the prior right by a suit or in0unction. 2n$er the Aui$elines in the !pproval of Corporate an$ Partnership @ames formulate$ by "3C, if the propose$ name contains a wor$ alrea$y use$ as part of the firm name of a registere$ company, the name must contain T4: :T13R 4:R6" $ifferent from the company alrea$y registere$. )n the case at bar, respon$entsL name actually only contains a single wor$, "T!@6!R6, $ifferent from petitionerLs. ICorp.K is use$ merely for $istinction. The $ecision of the appellate court is "3T !")63. Respon$ent is en0oine$ from using the wor$ P1)/)P".