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RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.L54580December29,1987

ARMCOSTEELCORPORATION(OFTHEPHILIPPINES),petitioner,
vs.
SECURITIESANDEXCHANGECOMMISSION,ARMCOSTEELCORPORATION(ofOhio,U.S.A.)andARMCO
MARSTEELALLOYCORPORATION,respondents.

GANCAYCO,J.:

On July 1, 1965 ARMCO Steel Corporation, a corporation organized in Ohio, U.S.A., hereinafter called ARMCO
OHIO,obtainedfromthePhilippinePatentOffice,CertificateofRegistrationNo.11750foritstrademarkconsisting
oftheword"ARMCO"andatriangulardevicefor"ferrousmetalsandferrousmetalcastingsandforgings."OnApril
14, 1971, pursuant to trademark rules, the petitioner filed with the said patent office an "Affidavit of Use" for said
trademark, which was subsequently accepted and for which the Patent Office issued the corresponding notice of
acceptanceof"AffidavitofUse."

ARMCOMarsteelAlloyCorporationwasalsoincorporatedonJuly11,1972underitsoriginalnameMarsteelAlloy
Company, Inc. but on March 28, 1973 its name was changed to ARMCOMarsteel Alloy Corporation hereinafter
calledARMCOMarsteel,byamendmentofitsArticlesofIncorporationaftertheARMCOOhiopurchased40%ofits
capitalstock.Bothsaidcorporationsareengagedinthemanufactureofsteelproducts.Itsarticleofincorporationin
partreadsasfollowsastoitspurposes:"tomanufacture,process...anddealinallkinds,form,andcombinationsof
iron,steelorothermetalsandalloranyproductsorarticlesparticularlyconsistingofiron,steelorothermetals.....

On the other hand ARMCO Steel Corporation was incorporated in the Philippines on April 25, 1973, hereinafter
called ARMCOPhilippines. A pertinent portion of its articles of incorporation provides as among its purposes: "to
contract,fabricate...manufacture...regardingpipelines,steelframes...."

ARMCOOhio and ARMCOMarsteel then filed a petition in the Securities and Exchange Commission (SEC) to
compel ARMCOPhilippines to change its corporate name on the ground that it is very similar, if not exactly the
sameasthenameofoneofthepetitioners,whichisdocketedasSECCaseNo.1187.Induecourseanorderwas
issuedbytheSEConFebruary14,1975grantingthepetition,thedispositivepartofwhichreadsasfollows:

Inviewoftheforegoing,therespondent,ARMCOSTEELCORPORATION,isherebyorderedtotake
out'ARMCO'andsubstituteanotherwordinlieuthereofinitscorporatenamebyamendingthearticles
ofincorporationtothateffect,withinthirty(30)daysfromdateofreceiptofacopyofthisOrderafter
which,three(3)copiesoftheamendedarticlesofincorporation,dulycertifiedbyamajorityoftheboard
ofdirectorsandcountersignedbythepresidentandsecretaryofthecorporation,shallbesubmittedto
thisCommission,togetherwiththecorrespondingfilingfees,asrequiredbylaw.1

AmotionforreconsiderationofthesaidorderwasfiledbysaidrespondentonMarch6.1975butthiswasdeniedin,
anorderofApril16,1965asthemotionwasfiledoutoftime,acopyofthequestionedorderhavingbeenreceived
by respondent on February 18, 1975 so that said order had become final and executory. 2 A motion for
reconsiderationfiledbyrespondenttosetasidesaidorderofApril16,1965wasalsodeniedbytheSEConJune23,1975.3
An appeal was interposed by respondent to the Court of Appeals which was docketed as CA G.R. No. 04448R but the
appeal was dismissed in a resolution of January 13, 1976, on the ground that the appeal was perfected beyond the
reglementaryperiodallowedbylaw.

On March 22, 1976 said respondent amended its articles of incorporation by changing its name to "ARMCO
structures,Inc."whichwasfiledwithandapprovedbytheSEC.
Nevertheless, in an order of January 6, 1977, the SEC issued an order requiring respondent, its directors and
officerstocomplywiththeaforesaidorderoftheCommissionofFebruary14,1975withinten(10)daysfromnotice
thereof.5

AmanifestationandmotionwasfiledbyrespondentinformingSECthatithadalreadychangeditscorporatename
with the approval of the SEC to ARMCO Structures, Inc. in substantial compliance with the said order or in the
alternativeprayedforahearingtodetermineifthereisaconfusingsimilaritybetweenthenamesofthepetitioners
ononehandandtheARMCOStructures,Inc.ontheother.

Petitionersthenfiledacommenttosaidmanifestationallegingthatthechangeofnameofsaidrespondentwasnot
doneingoodfaithandisnotinaccordancewiththeorderoftheCommissionofFebruary14,1975sothatdrastic
actionshouldbetakenagainsttherespondentanditsofficers.Subsequently,petitionersfiledamotiontocitesaid
respondent, its directors and officers in contempt for disobeying the orders of February 14, 1975 and January 6,
1977. In an order of August 31, 1977, the SEC finding that the respondent, its directors, and officers have not
compliedwiththefinalorderofFebruary14,1975requiredthemtoappealbeforetheCommissiononSeptember
22, 1977 at 10:00 o'clock in the morning to show cause why they should not be punished for contempt by the
Commission.6

Afterthehearingthepartiessubmittedtheirrespectivememoranda.InanotherorderofJanuary17,1979,theSEC
findingthattherespondentdidnotmaketheproperdisclosureofthecircumstanceswhenitamendeditsarticlesof
incorporationandsubmittedthesamefortheapprovaloftheSECthussaidrespondent,itsdirectors,andofficers
were ordered within ten (10) days from notice to comply with the order of February 14, 1975. An appeal was
interposed by the respondent to the SEC enbanc. The Commission en banc in an order of December 14, 1979
dismissedtheappealforlackofmerit.7

Hence,thehereinpetitionforreviewfiledbyARMCOPhilippineswhereinitseeksthereversaloftheordersofthe
SECofDecember14,1979andAugust6,1980andthattheorderofFebruary14,1975bedeclaredfunctusoficio
forhavingbeensubstantiallycompliedwithbythepetitioner.Thegroundsofthepetitionareasfollows:

THE SECURITIES AND EXCHANGE COMMISSION ERRED WHEN IT DID NOT CONSIDER ITS
ORDER DATED FEBRUARY 14,1975 FUNCTUS OFFICIO PURSUANT TO THE LEGAL MAXIM
CESSANTE LEGIS RATIONE CESSAT ET IPSA LEX' AFTER PETITIONER HAD SUBSTANTIALLY
COMPLIED IN GOOD FAITH WITH SAID ORDER AND SAID COMPLIANCE HAD ACHIEVED THE
PURPOSE OF THE ORDER, BY CHANGING ITS CORPORATE NAME WITH THE APPROVAL OF
SAIDCOMMISSION.

II

THE COMMISSION ERRED WHEN IT DID NOT FIND THAT ITS APPROVAL OF PETITIONER'S
AMENDED ARTICLES OF INCORPORATION CHANGING PETITIONER'S CORPORATE NAME
FROM "ARMCO STEEL CORPORATION" TO "ARMCO STRUCTURES, INCORPORATED" WAS
REGULARANDLEGAL.

III

THE COMMISSION ERRED WHEN IT DID NOT FIND THAT PRIVATE RESPONDENTS WERE NO
LONGER ENTITLED TO THE RELIEF AWARDED BY THE ORDER DATED FEBRUARY 14,1975
CONSIDERING THAT SAID ORDER HAD BECOME FUNCTUS OFFICIO AND FURTHER
ENFORCEMENTTHEREOFWILLBEINEQUITABLEASITWILLDEPRIVEPETITIONEROFEQUAL
PROTECTIONOFLAWS.

IV

THE COMMISSION ERRED WHEN, THERE BEING A DISPUTE AS TO WHETHER OR NOT THE
PURPOSE OF THE ORDER DATED FEBRUARY 14,1975 HAD BEEN COMPLIED WITH AND
WHETHER THERE WAS STILL CONFUSING SIMILARITY BETWEEN THE CORPORATE NAMES
OF RESPONDENTS AND THE NEW NAME OF PETITIONER, IT DID NOT GRANT PETITIONER'S
PRAYERTHATAHEARTNGBEHELDTOTHRESHTHEISSUE."

TheCourtfindsnomeritinthepetition.

TheorderofthepublicrespondentSECofFebruary14,1975whichhaslongbecomefinalandexecutoryclearly
spellsoutthatpetitionermust"takeoutARMCOandsubstituteanotherwordinlieuthereofinitscorporatenameby
amendingthearticlesofincorporationtothateffect,...."Farfromcomplyingwithsaidorderpetitioneramendedits
corporatenameintoARMCOStructures,Inc.,andsecureditsapprovalbytheSEConMarch22,1976.Thatthis
amendmentwasmadebypetitionerwithouttheknowledgeoftheproperauthoritiesoftheSECishomebythefact
thatthereafteronJanuary6,1977anorderwasissuedbytheSECrequiringpetitioner,itsboardofdirectors,and
officerstocomplywiththeorderoftheCommissionofFebruary14,1975.WhentheattentionoftheSECwascalled
bypetitionerthatthechangeofcorporatenamehadbeenundertakenbyittoARMCOStructures,Inc.andasked
that it be considered as a substantial compliance with the order of February 14, 1975, the SEC in its order of
January17,1979speakingthroughitshearingofficerAntonioR.Manabatruledasfollows:

TheOrderofFebruary14,1975,cannotbutbeclearerthanwhatitpurportstorequireordemandfrom
respondent. Under in no distinct terms, it enjoins the removal or deletion of the word 'Armco' from
respondent's corporate name, which was not so complied with. The Commission, therefore, cannot
giveitsimprimaturtothenewcorporatenamebecausetherewasnocomplianceatall.

The fact that the Securities and Exchange Commission issued its certificate of filing of amended
articles of incorporation on March 22, 1976, is nothing but an illusory approval of the change of
corporatenameandaselfinducedprotectionfromtheCommissiontofurtherexactcomplianceofthe
OrderofFebruary14,1975.Craftily,theSecuritiesandExchangeCommissionand/oritsadministrative
personnelweremadetoissuesuchcertificateduringitsunguardedmoment.Verily,thecertificatecould
nothavebeenissuedwereitnotforsuchlapsesorhadrespondentbeeningoodfaithbymakingthe
properdisclosuresofthecircumstanceswhichledittoamenditsarticlesofincorporation.

Correctly pointed out by petitioners, a 'new determination as to whether or not there is confusing
similaritybetweenpetitioners'namesandthatof'ArmcoStructures,Incorporated,'cannotbeordered
withouttransgressionontheruleof,orthedecisionallawon,finalityofjudgment.8

TheCourtfindsthatthesaidamendmentinthecorporatenameofpetitionerisnotinsubstantialcompliancewith
theorderofFebruary14,1975.Indeeditisincontraventiontherewith.Torepeat,theorderwasfortheremovalof
the word "ARMCO" from the corporate name of the petitioner which it failed to do. And even if this change of
corporatenamewaserroneouslyacceptedandapprovedintheSECitcannottherebylegalizenorchangewhatis
clearly unauthorized if not contemptuous act of petitioner in securing the registration of a new corporate name
against the very order of the SEC of February 14, 1975. Certainly the said order of February 14, 1975 is not
rendered functus oficio thereby. Had petitioner revealed at the time of the registration of its amended corporate
namethattherewasthesaidorder,theregistrationoftheamendedcorporatenamecouldnothavebeenaccepted
andapprovedbythepersonsinchargeoftheregistration.Theactuationsinthisrespectofpetitionerarefarfrom
regularmuchlessingoodfaith.

The arguments of the petitioner that the SEC had approved the registration of several other entities with one
principalwordcommontoallas"ARMCO,"andthatthereisnoconfusingsimilaritybetweenthecorporatenamesof
respondentsandthenewnameofpetitioner,wouldindeedineffectbereopeningthefinalandexecutoryorderof
theSECofFebruary14,1975whichhadalreadyforeclosedtheissue.Indeed,insaidfinalordertheSECmadethe
followingfindingswhichareconclusiveandwelltaken:

The only question for resolution in this case is whether therespondent's name ARMCO STEEL
CORPORATIONissimilar,ifnotIdenticalwiththatofpetitioner,ARMCOSTEELCORPORATION(of
Ohio,U.S.A.)andofpetitioner,ARMCOMARSTEELALLOYCORPORATION,astocreateuncertainty
andconfusioninthemindsofthepublic.

Bymerelookingatthenamesitisclearthatthenameofpetitioner,ARMCOSTEELCORPORATION
(ofOhio,U.S.A.),andthatoftherespondent,ARMCOSTEELCORPORATION,arenotonlysimilarbut
Identical and the words "of Ohio, U.S.A.," are being used only to Identify petitioner ARMCO STEEL
OHIOasaU.S.corporation.

ItisindisputablethatARMCOSTEELOHIO,havingpatentedtheterm'Armco'aspartofitstrademark
onitssteelproducts,isentitledtoprotectionintheusethereofinthePhilippines.Theterm"Armco"is
now being used on the products being manufactured and sold in this country by ArmcoMarsteel by
virtue of its tieup with ARMCOSTEELOHIO. Clearly, the two companies have the right to the
exclusiveuseandenjoymentofsaidterm.

ARMCOSTEELPHILIPPINES,hasnotonlyanIdenticalnamebutalsoasimilarlineofbusiness,as
shownabove,asthatofARMCOSTEELOHIO.Peoplewhoarebuyingandusingproductsbearing
thetrademark"Armco"mightbeledtobelievethatsuchproductsaremanufacturedbytherespondent,
wheninfact,theymightactuallybeproducedbythepetitioners.Thus,thegoodwillthatshouldgrow
and inure to the benefit of petitioners could be impaired and prejudiced by the continued use of the
sametermbytherespondent.

Obviously,thepetitionforreviewisdesignedtofurtherdelayifnotsimplyevadecompliancewiththesaidfinaland
executorySECorder.PetitioneralsoseeksareviewoftheordersofexecutionoftheSECofthesaidFebruary14,
1975order.Anorderorresolutiongrantingexecutionofthefinaljudgmentcannotbeappealed 9otherwisetherewill
benoendtothelitigation.10

WHEREFORE,thepetitionisDISMISSEDforlackofmeritwithcostsagainstpetitioner.Thisdecisionisimmediately
executory.

SOORDERED.

Teehankee,C.J.,Narvasa,CruzandParas,JJ.,concur.

Footnotes

1Annex"J"toPetition.

2Annex"K"toPetition.

3Annex"L"toPetition.

4Annex"M"toPetition.

5Annex"M".

6Annex"R".

7Annex"A"tothePetition.

8Annex"V"tothePetition.

9HeirsofJuneD.Franciscovs.MunozPalma,37SCRA753Romero,Sr.vs.CourtofAppeals,40
SCRA172.

10Corpuzvs.Alikpala,22SCRA104Soccovs.Vda.deLeary,SCRA326,329.

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