Red Line Transport vs.

Rural Transit

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 Province 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 Transits application
would constitute a ruinous competition over said route

On Dec. 21, 1932, Public Service Commission approved Rural Transits

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 CFIs 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 Transits 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 Transits 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