8. Collector of Internal Revenue V.

Club Filipino Whether Club Filipino is a stock corporation

G.R. L-12719
May 31, 1962 HELD
Topic: Types of Private Corporation No!
Petitioners: Collector of Internal Revenue
Respondents: The Club Filipino, Inc. De Cebu RATIO
Ponente: J. Paredes The Supreme Court held that even though Club Filipino is divided into shares, it
doesn’t deviate from the fact that it is not engaged in the business of operating a
bar or a restaurant. The real determinative of whether a club is engaged in such
DOCTRINE: The real determinative factor of what a club is all about is not based on
business is based in its articles and by-laws. Hence, by applying such doctrine in this
how it usually operates but is based on the articles and by-laws of the club
scenario, extrinsic evidence provides that the Club is not really engaged in the
business of a barkeeper or a restaurateur. The bar and restaurant of Club Filipino is
FACTS
merely incidental since it caters to the needs of their members and not for the
- The Club Filipino is a civic corporation with an original authorized capital
purpose of deriving profit from it.
stock of P22, 000
- Such stocks were increased to P200, 000
Lastly, such club can’t be considered a stock corporation on the basis that by
- The Club Filipino operate and maintain a golf course, tennis, gymnasiums,
looking into their by-laws or articles of incorporation, there was no authority for
bowling alleys, billiard tables and pools and other form of games that are
the club to distribute dividends or surplus. For a stock corporation to exist it must
not prohibited by law
show that:
- Such games were for the development of recreation and healthy training
of is members and shareholders
1) A capital stock can be divided into shares
- It was stated in the Deed of Incorporation that upon dissolution of such
2) Authority to distribute to the holders of such shares or dividends of the surplus
Club, the assets will satisfy first the debts while the remaining will be
profits on the basis of the shares held
donated to a charitable institution of located in Cebu
- Club Filipino owns and operates a club house, bowling alley, golf course
Since these requisites are not present in this case, such Club can’t be considered as
and bar restaurant which sells wines and drinks to their members and
a stock corporation.
guests
- It is important to note that the club operated mainly with funds derived
DISPOSITIVE PORTION
from the membership fees and dues and whatever profits it had is used in
WHEREFORE, the decision appealed from is affirmed without costs.
defraying whatever overhead expenses the Club has as a whole and for
improvement
- In 1951, a capital surplus occurred due to the re-evaluation of its real
properties thus the stock dividends increased but no cash dividends were
distributed to the stockholders
- Hence in 1952, the government discovered that Club Filipino never paid
the percentage tax arising from its bar and restaurants hence the
Collector demanded a sum of P12,068.84
- Club Filipino requested the collector to cancel such assessment but it was
later on denied by the Collector
- CTA reversed the decision of the Collector on the basis that Club Filipino
is a non stock corporation hence it is not liable for such percentage tax

ISSUE
 9. De La Salle Montessori Intl of Malolos v De La Salle Brothers, Inc. GR 205548
Feb. 07, 2018
TOPIC: Articles of Incorporation – Change of Name
PETITIONER: DE LA SALE MONTESSORI INTERNATIONAL OF MALOLOS, INC.
RESPONDENT: DE LA SALLE BROTHERS, INC., DE LASALLE UNIVERSITY, INC., LA
SALLE ACADEMU, INC., DE LA SALLE-SANTIAGO ZOBEL SCHOOL, INC., DE LA SALLE
CANLUBANG. INC.
FACTS: Petitioner reserved with the SEC its corporate name De La Salle Montessori
International Malolos, Inc. from June 4 to Augsut 3, 2007, after which the SEC
articles of incorporation and by-laws to the Department of Education (DepEd) for
comments and recommendation. The DepEd returned the indorsement without
objections. Consequently, the SEC issued a certificate of incorporation to
petitioner.
On January 29, 2010, respondents De La Salle Brothers, Inc., De La Salle University,
Inc., La Salle Academy, Inc., De La Salle-Santiago Zobel School, Inc. (formerly De La
Salle-South, Inc.), and De La Salle Canlubang, Inc. (formerly De La Salle University-
Canlubang, Inc.) filed a petition with the SEC seeking to compel petitioner to
change its corporate name.
Respondents claim that petitioner's corporate name is misleading or confusingly
similar to that which respondents have acquired a prior right to use, and that
respondents' consent to use such name was not obtained. According to
respondents, petitioner's use of the dominant phrases "La Salle" and "De La Salle"
gives an erroneous impression that De La Salle Montessori International of Malolos,
Inc. is part of the "La Salle" group, which violates Section 18 of the Corporation
Code of the Philippines. Moreover, being the prior registrant, respondents have
acquired the use of said phrases as part of their corporate names and have
freedom from infringement of the same.
The SEC OGC issued an Order directing petitioner to change or modify its corporate
name. It held that respondents have acquired the right to the exclusive use of the
name "La Salle" with freedom from infringement by priority of adoption, as they
have all been incorporated using the name ahead of petitioner.
Furthermore, the name "La Salle" is not generic in that it does not particularly refer
to the basic or inherent nature of the services provided by respondents. Hence, the
SEC OGC concluded that respondents' use of the phrase "De La Salle" or "La Salle"
is arbitrary, fanciful, whimsical and distinctive, and thus legally protectable.
As regards petitioner's argument that its use of the name does not result to
confusion stating that its complete name, "De La Salle Montessori International of
Malolos, Inc.," contains four other distinctive words that not found in respondents'
corporate names. The SEC OGC held otherwise, noting that confusion is probably or
likely to occur considering not only the similarity in the parties' names but also the
business or industry they are engaged in, which is providing courses of study in pre-
elementary, elementary and secondary education.
The SEC OGC disagreed with petitioner's argument that the case of Lyceum of the
Philippines, Inc. v. Court of Appeals (Lyceum of the Philippines) applies since the
word "lyceum" is clearly descriptive of the very being and defining purpose of an
educational corporation, unlike the term "De La Salle" or "La Salle." Hence, the
Court held in that case that the Lyceum of the Philippines, Inc. cannot claim
exclusive use of the name "lyceum."
SEC En Banc affirmed the Order of the SEC OGC. Lyceum of the Philippines case
does not apply since the word "lyceum" is a generic word that pertains to a
category of educational institutions and is widely used around the world. Petitioner
also failed to establish that the term "De La Salle" is generic for the principle
enunciated in Lyceum of the Philippines to apply.
ISSUE: Whether or not the [CA] erred in not applying the doctrine laid down in the
case of [Lyceum of the Philippines], that LYCEUM is not attended with exclusivity.
HELD: [PETITION DENIED, UPHELD CA DECISION]
Corporation Code established a restrictive rule insofar as corporate names are
concerned. Section 18 provides:
Sec. 18. Corporate name. -No corporate name may be allowed
by the Securities and Exchange Commission 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. When a change in the
corporate name is approved, the Commission shall issue an amended
certificate of incorporation under the amended name.
In Philips Export B. V. v. Court of Appeals,31 the Court held that to fall within the
prohibition of Section 18, two requisites must be proven, to wit: ( 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.
It being clear that respondents are the prior registrants, they certainly have
acquired the right to use the words “De La Salle” or “La Salle” as part of their
corporate names.
Also, there is a confusing similarity between petitioner’s and respondents’
corporate names. While these corporate names are not identical, it is evident that
the phrase “De La Salle” is the dominant phrase used.
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. Petitioner’s assertion that the words "Montessori International of
Malolos, Inc." are four distinctive words that are not found in respondents'
corporate names so that their corporate name is not identical, confusingly similar,
patently deceptive or contrary to existing laws does not avail. As correctly held by
the SEC OGC, all these words, when used with the name "De La Salle," can
reasonably mislead a person using ordinary care and discretion into thinking that
petitioner is an affiliate or a branch of, or is likewise founded by, any or all of the
respondents, thereby causing confusion
Finally, the Court's ruling in Lyceum of the Philippines46 does not apply. In that
case, the Lyceum of the Philippines, Inc., an educational institution registered with
the SEC, commenced proceedings before the SEC to compel therein private
respondents who were all educational institutions, to delete the word "Lyceum"
from their corporate names and permanently enjoin them from using the word as
part of their respective names.
The Court there held that the word "Lyceum" today generally refers to a school or
institution of learning. It is as generic in character as the word "university." Since
"Lyceum" denotes a school or institution of learning, it is not unnatural to use this
word to designate an entity which is organized and operating as an educational
institution. Moreover, the Lyceum of the Philippines, Inc. 's use of the word
"Lyceum" for a long period of time did not amount to mean that the word had
acquired secondary meaning in its favor because it failed to prove that it had been
using the word all by itself to the exclusion of others. More so, there was no
evidence presented to prove that the word has been so identified with the Lyceum
of the Philippines, Inc. as an educational institution that confusion will surely arise
if the same word were to be used by other educational institutions.
Here, the phrase "De La Salle" is not generic in relation to respondents. It is not
descriptive of respondent's business as institutes of learning, unlike the meaning
ascribed to "Lyceum." Moreover, respondent De La Salle Brothers, Inc. was
registered in 1961 and the De La Salle group had been using the name decades
before petitioner's corporate registration. In contrast, there was no evidence of the
Lyceum of the Philippines, Inc.'s exclusive use of the word "Lyceum," as in fact
another educational institution had used the word 1 7 years before the former
registered its corporate name with the SEC. Also, at least nine other educational
institutions included the word in their corporate names. There is thus no similarity
between the Lyceum of the Philippines case and this case that would call for a
similar ruling.
10. Lyceum v CA
G.R. No. 101897
March 5, 1993
____________________________________________________________________
Topic: Incorporation and Registration of Corporations
Petitioner: Lyceum of the Philippines
Respondent: Lyceum of Cabagan, Western Pangasinan Lyceum, Lyceum of Kakki,
Lyceum of Aparri, Lyceum of Tuao, Lyceum of Camalaniguan, Buhi Lyceum, etc.,
Court of Appeals
___________________________________________________________________
Facts:
• Lyecum(petitioner) commenced a proceeding in the SEC against the
Lyceum of Baguio to require it to change its corporate name and to adopt
another not similar or identical to with what of petitioner
• Associate Commissioner held that the corporate names were
substantially identical because of the presence of a dominant word
Lyceum
• Petitioner then wrote to all educational institutions it could find using the
word Lyceum as part of their corporate name and advised them to
discontinue such use of the term
• When all refused, petitioner instituted a case in the SEC to enforce what
petitioner claims to be proprietary right to the word “Lyceum”
• The hearing officer then ruled that the word “Lyceum” was capable of
appropriation
• On appeal by private respondents in the SEC En Banc, the hearing officer
was reversed and set aside
• They held that the attaching of geographical names to the word
“Lyceum” served sufficiently to distinguish the schools from one another
 • Petitioner went to the CA
• They claimed that the first case should have constituted stare decisis for
the subsequent actions
• CA ruled in the negative and affirmed the decision
Issue: W/N petitioner can claim exclusive use of corporate name “Lyceum”? (NO)
Held:
• The Articles of Incorporation of a corporation must, among other things,
set out the name of the corporation. Sec 18 of the Corporation Code
establishes a restrictive rule insofar as corporate names are concerned:
o SECTION 18. Corporate Name – 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 which is patently deceptive or patently confusing
or contrary to existing laws, is the avoidance of fraud upon the
public which would have the occasion to deal with the enitity
concerned, the evasion of legal obligations and duties, and the
reduction of difficulties of administration and supervision over
corporations
• We do not consider that the corporate names of private respondent
institutions are identical with, or deceptively or confusingly similar to that
of the petitioner institution
• True enough, the corporate names of private respondent entities all carry
the word “Lyceum” but confusion and deception are effectively
precluded by the appending of geographic names to the word “Lyceum”
• Etymologically, the word “Lyceum” is the Latin word for the Greek lykeion
which in referred to a locality on the river Ilissius in ancient Athens
• In time, the word “Lyceum” became associated with schools and other
institutions
• Thus today, the word “Lyceum” generally refers to a school or an
institution of learning
• It is claimed however by petitioner that the word Lyceum has acquired a
secondary meaning in relation to petitioner with the result that that
word, has become appropriable by petitioner to the exclusion of other
institutions
• In Industry Inc. v Standard Brands, it was elaborated;
o A word or phrase originally incapable of exclusive
appropriation, might nevertheless have been used so long and
so exclusively by one producer
• The question which arises therefore is whether or not the use by
petitioner of “Lyceum” for such length of time and with such exclusivity
as to have become associated or identified with the petitioner institution
in the mind of the general public
• The CA recognized that issue and ruled in the negative
• The same doctrine cannot be made to apply where the evidence did not
prove that the business has continued for so long a time that it has
produced and has acquired a well-known reputation, and confusion will
result by the use of the disputed name
• Appellant failed to provide evidence in the hearing before the
Commission which proved the word “Lyceum” has indeed acquired
secondary meaning in favor of appellant
• The number alone of the private respondents in the case at bar suggests
strongly that petitioner’s use of the word Lyceum has not been attended
with exclusivity
• Western Pangasinan Lyceum used the term Lyceum even 17 years before
petitioner registered its own corporate name
• Whether or not Western Pangasinan Lyceum must be deemed to have
lost its right under its original 1933 registration appears to be quite
secondary in importance
• It proves petitioner’s se was no exclusive but was in truth shared with
Western Pangasinan who even registered earlier
• We conclude petitioner is not entitled to a legally enforceable exclusive
right to use the word Lyceum
WHEREFORE, the petitioner having failed to show any reversible error on the part
of the public respondent Court of Appeals, the Petitioner for Review is DENIED for
lack of merit, and the Decision of the Court of Appeals dated 28 June 1991 Is
hereby AFFIRMED. No pronouncement as to costs.
 11. Philips Export vs. CA chain rollers, belts, bearings, and cutting saw are grossly different from
G. R. No. 96161 Petitioners’ electrical products.
21 February 1992 l SEC Hearing Officer ruled against the issuance of such Writ and dismissed the
Topic: Incorporation and Registration of Corporations Petition for lack of merit. SEC found no sufficient ground for the granting of
Petitioners: PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC., and PHILIPS injunctive relief.
INDUSTRIAL DEVELOPMENT, INC. l §18, Corporation Code is applicable only when the corporate names in
Respondents: COURT OF APPEALS, SECURITIES & EXCHANGE COMMISSION, and question are identical. Here, there is no confusing similarity between
STANDARD PHILIPS CORPORATION Petitioners’ and Standard Philips’ corporate names as those of the Petitioners
Ponente: J. Melencio-Herrera contain at least two words different from that of the Respondent. Petitioners’
MR was denied.
l SEC en banc affirmed the dismissal.
DOCTRINE:
l CA disagreed with Petitioners’ claim that the ruling in Converse Rubber
Corporation v. Universal Converse Rubber Products, Inc., et al. (the word
A corporation’s right to use its corporate and trade name is a property right, a right
PHILIPS cannot be used as part of Standard Philips’ corporate name as the
in rem which it may assert and protect against the world in the same manner as it
same constitute a dominant part of Petitioners’ corporate names). In so
may protect its tangible property, real or personal, against trespass or conversion.
holding, CA observed that the Converse case is not four-square with the
present case inasmuch as the contending parties in Converse are engaged in a
FACTS:
similar business. CA upheld SEC. CA denied Petitioners’ MR, hence this
petition.
l Philips Export B.V. is a foreign corporation organized under the laws of the
Netherlands, although not engaged in business here, is the registered owner
of the trademarks PHILIPS and PHILIPS SHIELD EMBLEM under Certificates of
ISSUE:
Registration Nos. R-1641 and R-1647, respectively issued by the Philippine
Patent Office (Bureau of Patents, Trademarks, and Technology Transfer).
W/N respondent Standard Philips may continue to use PHILIPS in its corporate
l Philips Electrical Lamps, Inc. and Philips Industrial Development, Inc. are
name.
authorized users of the trademarks PHILIPS and PHILIPS SHIELD EMBLEM,
incorporated on 29 August 1956 and 25 May 1956, respectively. All petitioner
HELD:
corporations belong to the PHILIPS Group of Companies.
No.
l Standard Philips Corporation was issued a Certificate of Registration by
l Western Equipment and Supply Co. v. Reyes: Court declared that a
respondent Commission (SEC) on 19 May 1982.
corporation’s right to use its corporate and trade name is a property right, a
l Petitioners filed a letter complaint with SEC asking for the cancellation of the
right in rem, which it may assert and protect against the world in the same
word “PHILIPS” from Standard Philips’ corporate name in view of the prior
manner as it may protect its tangible property, real or personal, against
registration with the Bureau of Patents of the trademark “PHILIPS” and the
trespass or conversion. It is regarded, to a certain extent, as a property right
logo “PHILIPS SHIELD EMBLEM” in the name of Philips Export, and the
and one which cannot be impaired or defeated by subsequent appropriation
previous registration of Philips Electrical and Philips Industrial with the SEC.
by another corporation in the same field.
l Standard Philips’ refused to amend its Articles of Incorporation. Petitioners
l A name is peculiarly important as necessary to the very existence of a
filed with the SEC a Petition praying for the issuance of a Writ of Preliminary
corporation. Its name is one of its attributes, an element of its existence, and
Injunction, alleging that Standard Philips’ use of the word PHILIPS amounts to
essential to its identity. The general rule as to corporations is that each
an infringement and clear violation of Petitioners’ exclusive right to use the
corporation must have a name by which it is to sue and be sued and do all
same considering that both parties engage in the same business.
legal acts. The name of a corporation in this respect designates the
l Standard Philips countered that Philips Export has no legal capacity to sue;
corporation in the same manner as the name of an individual designates the
that its use of its corporate name is not at all similar to Petitioners’ trademark
PHILIPS when considered in its entirety; and that its products consisting of
 person; and the right to use its corporate name is as much as part of the are protected in the use of trademarks and tradenames. Such principle
corporate franchise as any other privilege granted. proceeds upon the theory that it is a fraud on the corporation which has
l A corporation acquires its name by choice and need not select a name acquired a right to that name and perhaps carried on its business thereunder,
identical with or similar to one already appropriated by a senior corporation that another should attempt to use the same name, or the same name with a
while an individual’s name is thrust upon him. A corporation can no more use slight variation in such a way as to induce persons to deal with it in the belief
a corporate name in violation of the rights of others than an individual can that they are dealing with the corporation which has given a reputation to the
use his name legally acquired so as to mislead the public and injure another. name.
l §18, Corporate Code: “No corporate name may be allowed by the SEC if the l The fact that there are other companies engaged in other lines of business
proposed name is identical or deceptively or confusingly similar to that of any using the word PHILIPS as part of their corporate names is no defense and
existing corporation or to any other name already protected by law or is does not warrant the use by Standard Philips of such word which constitutes
patently deceptive, confusing or contrary to existing law. Where a change in an essential feature of Petitioners’ corporate name.
the corporate name is approved, the commission shall issue an amended l In support of its application for the registration of its Articles of Incorporation
certificate of incorporation under the amended name.” with the SEC, Standard Philips had submitted an undertaking “manifesting its
l To come within its scope, two requisites must be proven: willingness to change its corporate name in the event another person, firm,
1. That the complainant corporation acquired a prior right over the use of or entity has acquired a prior right to the use of the said firm name or one
such corporate name; and deceptively or confusingly similar to it.” Standard Philips must now be held to
2. The proposed name is either: its undertaking.
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.
l The right to the exclusive use of a corporate name with freedom from
infringement by similarity is determined by priority of adoption.As aptly
pointed out by Petitioners, respondent’s choice of PHILIPS as part of its
corporate name tends to show respondent’s intention to ride on the
popularity and established goodwill of said petitioners’ business throughout
the world.
l The subsequent appropriator of the name or one confusingly similar thereto
usually seeks an unfair advantage, a free ride on another’s goodwill.
l In allowing Standard Philips the continued use of its corporate name, the SEC
maintains that the corporate names of Petitioners contain at least two
different words. True, under the Guidelines in the Approval of Corporate and
Partnership Names formulated by the SEC, the proposed name “should not
be similar to one already used by another corporation or partnership. If the
proposed name contains a word already used as part of the firm name or
style of a registered company, the proposed name must contain two other
words different from the company already registered.” xxx What is lost sight
of, however, is that PHILIPS is a trademark or trade name which was
registered as far back as 1922. Petitioners, therefore, have the exclusive right
to its use which must be free from any infringement by similarity.
l A corporation has an exclusive right to the use of its name, which may be
protected by injunction upon a principle similar to that upon which persons
 12. PC Javier v CA
GR NO. 129552
June 29, 2005
Topic: Articles of Incorporation
Petitioners: PC Javier Songs, Inc., Pablo Javier, Sr., Rosalina Javier
Respondents: Court of Appeals, PAIC Savings & Mortgage Bank, Inc., Sheriffs Grace
Belvis, Sofronio Villarin, Pio Martinez, and Nicanor Blanco
Ponente: Chico-Nazario, J.
FACTS:
• Feb 1981: Plaintiff applied with First Summa Savings & Mortgage Bank for
a loan accommodation under the Industrial Guarantee Loan Fund (IGLF)
for P1.5m.
• First Summa Savings then later renamed itself to PAIC Savings &
Mortgage Bank.
• Plaintiff was advised that its loan application was approved and that it
shall be forwarded to the Central Bank (CB) for processing and release.
• CB released the loan to PAIC in two tranches of P750k each. The first
tranche was then released to Plaintiff on May 18, 1981 in the amount of
P750k and the second on November 21, 1981 in the same amount.
• From the second release, however, P250k was deducted and deposited in
the name of Plaintiff under a time deposit.
Plaintiff Argument
• Plaintiff then claimed that the loan releases were delayed; that the P250k
deduction from the IGLF loan was placed under time deposit; that
Plaintiff was not allowed to withdraw the proceeds of such time deposit
since PAIC intended the time deposit as automatic payments on the
accrued principal and interest due on the loan.
Respondent Argument
• PAIC claims that only the final proceeds of the loan in the amount of
P750k was delayed having been released to Plaintiff only on November
but this was because of the shortfall in the collateral cover of Plaintiff’s
loan. That the second tranche of the loan was precisely released after a
commitment was made by Plaintiff to cover the collateral deficiency
through the opening of a time deposit, which is stated above. That in
compliance with their commitment to submit additional security and
open a time deposit, Plaintiff Javier opened such account and on
February 15, 1983 executed a chattel mortgage over some machineries in
favor of PAIC.
• Thereafter, Plaintiff defaulted in the payment of its loan with PAIC;
hence, it sent a second demand letter to Plaintiff reminding them to
make payments since their account is overdue.
• That on May 2, 1984, PAIC sent another demand letter to Plaintiff since
they have already defaulted and their mortgage will now be foreclosed.
• Plaintiffs still failed to pay and PAIC proceeded to initiate extrajudicial
foreclosure on the REM executed by Plaintiff Spouses. Hence, Plaintiff’s
complaint.
• This instant complaint was filed to forestall the extrajudicial foreclosure
sale of a piece of land mortgaged by Petitioner in favor of PAIC since it
likewise asked for the nullification of the REM it entered into with the
bank.
• Among the issues raised by Petitioner is W/N First Summa and PAIC are
one the same.
• RTC: In an order, the court ordered Respondent-Sheriffs to maintain the
status quo and to desist from proceeding with the foreclosure of the
properties.
• RTC: The court also declared that First Summa and PAIC are one and the
same. Petitioner liable to it for the unpaid balance of its loans and the
foreclosure is justified because the loans were due and demandable
when the proceedings commenced.
• CA: Affirmed the RTC in toto.
ISSUE:
W/N First Summa and PAIC are one and the same?
HELD/RATIO:
Plaintiff contends that it is justified in withholding the payments to PAIC until they
have been properly notified of the change in the corporate name. Plaintiff only
received notice of change on April 1990 when the bank presented a witness who
showed the SEC Certificate of Filing Amended Articles of PAIC.
Plaintiff’s argument has not merit. Their defense of notification before they pay is
unmeritorious. There is no such requirement for the bank to notify its debtors
regarding the change in its name. This Court cannot impose such obligation on the
bank as well since it would be tantamount to judicial legislation. The formal
notification, therefore, is discretionary on the bank.
In this case, although there was no evidence showing that Petitioners were sent
copies of documents indicating the change of First Summa to PAIC, there are still
evidence that show they had prior notice of such change.
First – The accountant of Petitioner, in a letter, addressed PAIC as the “…former
First Summa Savings and Mortgage Bank...” This letter was also signed by Petitioner
Javier.

Second – A board resolution signed by Petitioner Javier authorizing a chattel
mortgage in favor of PAIC.
Third – A secretary’s certificate signed by Petitioner’s Corporate Secretary
certifying a board resolution for another chattel mortgage on equipment as
collateral for the loan with PAIC.
Fourth – Another letter signed by Petitioner Javier and addressed to PAIC,
authorizing the General Manager of Petitioner to secure certain documents.
Hence, it cannot be denied that Petitioner was aware of the change in First Summa
to PAIC. Petitioner then has no valid reason not to pay the overdue loans. First
Summa and PAIC are one and the same bank.
A change in the corporate name does not make a new corporation, whether
effected by a special act or under a general law. It has no effect on the identity of
the corporation, its property, rights or liabilities. The corporation, upon such
change, is not a new corporation nor the successor of the original. It is the same
with just change in name.
WHEREFORE, premises considered, the CA decision is affirmed in toto.
13. Philippine First Insurance v Hartigan
G.R. L-26370
Date 31 July 1970
Topic: Articles of Incorporation – Change of Name
Petitioners: Philippine First Insurance Company, Inc
Respondents: Maria Carmen Hartigan, CGH, and O.Engkee
Ponente: Barredo, J.
RECIT-READY/SUMMARY:
Petitioner doing business under the name “The Yek Tong Lin Fire and Marine
Insurance Co., Lt.” signed as co-maker together with respondent Hartigan for a
promissory note (P5k) in favor of China Banking Corporation.
Chua and Fu (alongside with defendant Engkee) signed an indemnity agreement in
favor of the petitioner.
Respondent failed to pay in full. An outstanding balance of P4,559.50 including
interest remained unpaid. A complaint was filed.
Defendants admit the execution of the indemnity agreement and they also
admitted that they failed to pay their debt when it fell due. However, they claim
that they signed the indemnity agreement in favor of “The Yek Tong Lin Fire and
Marine Insurance Co., Lt.” and not the petitioner.
Can a Phil. Corporation change its name and retain its original personality and
individuality?
SC said YES. There is nothing in Section 18 of the Corporation Law which prohibits a
corporation from changing its name. The inference is clear that such a change is
allowed, for if the legislature had intended to enjoin corporations from changing
names, it would have expressly stated so in this section or in any other provision of
the law.
DOCTRINE:
There is nothing in Section 18 of the Corporation Law which prohibits a corporation
from changing its name. The inference is clear that such a change is allowed, for if
the legislature had intended to enjoin corporations from changing names, it would
have expressly stated so in this section or in any other provision of the law.
A corporation may change its name by merely amending its charter in the manner
prescribed by law.
The change of name of a corporation does not result in its dissolution. The
changing of the name of a corporation is no more the creation of a corporation
than the changing of the name of a natural person is the begetting of a natural
person. The act, in both cases, would seem to be what the language which we use
to designate it imports—a change of name and not a change of being.
FACTS:
Petitioner Philippine First insurance Company, who was originally organized as “The
Yek Tong Lin Fire and Marine Insurance Co., Lt.”, signed as co-maker with
defendant Hartigan, a promissory note for P5,000 in facor of China Banking
Corporation. (note: Petitioner did business under “The Yek Tong Lin Fire and
Marine Insurance Co., Lt.”)
An Indemnity Agreement was signed by Chua and Fu (in the complaint affidavit
Defendant Engkee was included) in favor of the Petitioner undertaking jointly and
severally, to pay the petitioner damages, losses or expenses of whatever kind or
nature, including attorney’s fees and legal costs, which the petitioner may sustain
as a result of the execution by the latter as co-maker Hartigan of the promissory
note.
Hartigan failed to pay in full. An outstanding balance of P4,559.50 including interest
remained unpaid. A complaint was filed.
Defendants admit the execution of the Indemnity Agreement but they claim that
they signed the agreement in favor of “The Yek Tong Lin Fire and Marine Insurance
Co., Lt.” not in favor of Philippine First Insurance Company. They admit that they
failed to pay the promissory note when it fell due, their obligation with the China
Banking Corporation based on the promissory note still subsists, the surety
(petitioner) who co-signed the promissory note is not entitled to collect the value
(from the indemnity agreement) from the defendants otherwise they will be liable
for double amount of their obligation, there being no allegation that the surety has
paid the obligation to the creditor.
CFI
• Dismissed the action with costs against the petitioner
• Petitioner has no cause of action and is not the right party in interest
• Change of name made by the petitioner is of “dubious validity”
• Change of corporate name appears to be against public policy and may
be effected only by express authority of law
• Lower Court said that assuming the change of name is valid Yek Tong Lin
became dissolved and of no further existence
A corporation may change its name by merely amending its charter in the manner
prescribed by law.
The change of name of a corporation does not result in its dissolution. The
changing of the name of a corporation is no more the creation of a corporation
than the changing of the name of a natural person is the begetting of a natural
person. The act, in both cases, would seem to be what the language which we use
to designate it imports—a change of name and not a change of being.
The approval by the stockholders of the amendment of the articles of incorporation
changing the corporate name does not automatically change the name of the
corporation as of that date. To be effective, Section 18 of the Corporation Law
requires that a copy of the articles of incorporation as amended, duly certified to
be correct by the president and the secretary of the corporation and a majority of
the board of directors or trustees, shall be filed with the Securities & Exchange
Commissioner and it is only from the time of such filing, that the corporation shall
have the same powers and it and the members and stockholders thereof shall
thereafter be subject to the same liabilities as if such amendment had been
embraced in the original articles of incorporation.
DISPOSITIVE PORTION
WHEREFORE, judgment of the lower court is reversed, and this case is remanded to
the trial court for further proceedings consistent herewith. With costs against
appellees.

ISSUE:
May a Philippine Corporation change its name and still retain its original personality
and individuality?

HELD:
YES. When the Petitioner signed as co-maker for the promissory note/indemnity
agreement, They rightly acted in its old name (The Yek Tong Lin…) for only after the
filing of their amended articles of incorporation with SEC on 26 May 1961, did the
petitioner legally acquire its new name; and it was perfectly right for the petitioner
to file the present case in that new name on 6 Dec. 1961. Such is, but the logical
effect of the change of name of the corporation upon its actios.

RATIO:
There is nothing in Section 18 of the Corporation Law which prohibits a corporation
from changing its name. The inference is clear that such a change is allowed, for if
the legislature had intended to enjoin corporations from changing names, it would
have expressly stated so in this section or in any other provision of the law.