19) L.C. Big Mak Burger, Inc. v. Mc Donald’s Corp. GR No.

233073, February 14, 2018

[Corporate Name]INTERESTING DAW INGUN NI ATTY
WALAAAAA NI AGREEEEEEEE SI ATTY. ANIII
A. Corporation may have a different corporate name and a different business name

Facts:
Issue:
1) Whether or not petitioner continuous use of its corporate name L.C. Big Mak Burger Inc.
is valid
Held:
1) Yes. Petitioner's good faith in complying with the court's order is manifest in this case.
Petitioner's questioned action, i.e., the use of its corporate name, is anchored upon the
January 3, 1994 Decision of the Securities and Exchange Commission (SEC) wherein respondent
sought the change of petitioner's corporate name to some other name which is not confusingly or
deceptively similar to respondent's "Big Mac" mark. In the said case, the SEC dismissed
respondent's case, ruling that petitioner's use of the name "Big Mak Burger" has priority in right;
and that petitioner's corporate name is not identical or confusingly similar to respondent's "Big
Mac" mark, hence, there is no basis to cancel petitioner's corporate name, among others.
To be sure, the complaint for change of corporate name before the SEC is a separate and
distinct case from that of the infringement and unfair competition case before the trial court.
Hence, inasmuch as the SEC Decision had long attained finality, the judgment in the separate
case of infringement and unfair competition cannot reverse nor modify the said SEC Decision
In any event, what is relevant and essential in this contempt case is the fact that by virtue
of petitioner's reliance upon the said lawful and binding SEC Decision in the use of its corporate
name in lieu of the proscribed "Big Mak" mark to comply with the subject injunction order,
petitioner's good faith is clearly manifest. Petitioner's justification of its questioned action is not
at all implausible. This Court finds no reason to reject petitioner's explanation or doubt its good
faith as certainly, the use of its corporate name was warranted by the SEC Decision. It was also
not unreasonable for the petitioner, through its officers, to think that the stalls and products
bearing its corporate name would send the message to the public that the products were the
petitioner's and not those of respondent's, the very evil sought to be prevented and/or eradicated
by the decision in the infringement/unfair competition case.

20) Care Best International, Inc. v. SEC GRN. 215510, Mar. 16, 2015. [use of legal names in
incorporation]
See Commonwealth Act
Doctrine: Under Section 14 (5) of the Corporation Code, the articles of incorporation must state
the names of the incorporators and this must necessarily refer to their legal names, not fictitious
names or aliases which they have no authority to use, as in this case. The fact that petitioner had
for its clients various government agencies is irrelevant as all corporations must comply with the
provisions of the Corporation Code.
Facts:
Petitioners Care Best International Inc., is a stock corporation registered with the
Securities and Exchange Commission on September 6, 1999. It is engaged in the business of
rendering janitorial, messengerial, repair, maintenance, and other related services.
On June 2, 2002, Ultra Clean Service Management Corporation filed a complaint before
the Compliance and Enforcement Division (CED) of the SEC seeking the revocation and/or
cancellation of the Certificate of Registration of the petitioner on the ground of fraud in the
procurement thereof, a violation under Section 6 of Presidential Decree No. 902-A. Ultra Clean
alleged that three (3) of petitioners’ incorporators in its Articles used aliases instead of their real
names; Ricardo S. Solivio made it appear he was Ricardo S. Enriquez, Arnold Naungayan made
it appear he was Arnold N. Baricawa, and Jessica P. Ibita made it appear she was Jessica P.
Evangelista.
Likewise, a complaint, for Violation of Commonwealth Act No. 142 was filed by Ultra
Clean against the aforenamed incorporators with the Office of the City Prosecutor (OCP) in
Makati. In its Resolution, the OCP determined that: Arnold Baricawa is the registered name from
his birth certificate, of Arnold Naungayan, and recommended the dismissal of the complaint for
illegal use of alias against him; recommend the filing of Informations, for illegal use of alias
against Ibita and Solivio.
With respect to the complaint with the SEC, the CED resolved that: the mere act of
allowing its incorporator/directors, specifically Solivio and Ibita, to use fictitious names, or
names which are not their true names, in signing petitioner’s Articles of Incorporation, a public
document, is fraudulent, thereby warranting the revocation of petitioner’s Certificate of
Registration. This fraudulent act left petitioner with only four (4) legally valid
incorporators/directors, thereby failing to fulfill the mandatory requirement under Section 14 (6)
of the Corporation Code which states that the number of directors or trustees, which shall not be
less than 5 nor more than 15.
Issue:
1) The issue is whether or not the use of aliases of 2 petitioners’ incorporators constitutes
fraud in the procurement of the petitioner's certificate of registration thereby warranting
the revocation thereof.
Held:
1) Yes, the use of aliases of 2 petitioners’ incorporators constitutes fraud in the procurement
of the petitioner's certificate of registration thereby warranting the revocation thereof.
 After a judicious review of the records, the Court resolves to deny the instant petition and
AFFIRM the September 13, 2013 Decision and November 17, 2014 Resolution of the Court of
Appeals (CA) in CA-G.R. SP No. 104364 for failure of Care Best International, Inc. (petitioner)
to show that the CA committed any reversible error in upholding the ruling of the Securities and
Exchange Commission revoking its Certificate of Registration on the ground of fraud.
As correctly pointed out by the CA, incorporation is a mere grant of privilege from the
State and, in order to be entitled to such privilege, the requirements and procedures for the grant
thereof must be complied with. Under Section 14 (5) of the Corporation Code, the articles of
incorporation must state the names of the incorporators and this must necessarily refer to their
legal names, not fictitious names or aliases which they have no authority to use, as in this case.
The fact that the petitioner had for its clients various government agencies is irrelevant as all
corporations must comply with the provisions of the Corporation Code.

21) Lanuza v. Court of Appeals,GRN 131394, Mar. 28, 2005 [articles of incorporation]
Q. When there are issued founders shares, are those who hold common shares unable to
vote?
A. Yes
Facts:
In 1952, the Philippine Merchant Marine School, Inc. (PMMSI) was incorporated, with
seven hundred (700) founders’ shares and seventy-six (76) common shares as its initial capital
stock subscription reflected in the articles of incorporation. However, private respondents and
their predecessors who were in control of PMMSI registered the company’s stock and transfer
book for the first time in 1978, recording thirty-three (33) common shares as the only issued and
outstanding shares of PMMSI. Sometime in 1979, a special stockholders’ meeting was called
and held on the basis of what was considered as a quorum of twenty-seven (27) common shares,
representing more than two-thirds (2/3) of the common shares issued and outstanding.
In 1982, the heirs of one of the original incorporators, Juan Acayan, filed a petition with
the Securities and Exchange Commission (SEC) for the registration of their property rights over
one hundred (120) founders’ shares and twelve (12) common shares owned by their father. The
SEC hearing officer held that the heirs of Acayan were entitled to the claimed shares and called
for a special stockholders’ meeting to elect a new set of officers. The SEC En Banc affirmed the
decision. As a result, the shares of Acayan were recorded in the stock and transfer book.
On 06 May 1992, a special stockholders’ meeting was held to elect a new set of directors.
Private respondents thereafter filed a petition with the SEC questioning the validity of the 06
May 1992 stockholders’ meeting, alleging that the quorum for the said meeting should not be
based on the 165 issued and outstanding shares as per the stock and transfer book, but on the
initial subscribed capital stock of seven hundred seventy-six (776) shares, as reflected in the
1952 Articles of Incorporation. The petition was dismissed.
 Appeal was made to the SEC En Banc, which granted said appeal, holding that the shares
of the deceased incorporators should be duly represented by their respective administrators or
heirs concerned. The SEC directed the parties to call for a stockholders’ meeting on the basis of
the stockholdings reflected in the articles of incorporation for the purpose of electing a new set of
officers for the corporation.
Petitioners filed two petitions for review with the Court of Appeals of the SEC En Banc’s
orders. The petitions were thereafter consolidated. The consolidated petitions essentially raised
the following issues, viz: (a) whether the basis the outstanding capital stock and accordingly also
for determining the quorum at stockholders’ meetings it should be the 1978 stock and transfer
book or if it should be the 1952 articles of incorporation; and (b) whether the Court of Appeals
"gravely erred in applying the Espejo Decision to the benefit of respondents”
The Court of Appeals held that for purposes of transacting business, the quorum should
be based on the outstanding capital stock as found in the articles of incorporation. As to the
second issue, the Court of Appeals held that the ruling in the Acayan case would ipso facto
benefit the private respondents, since to require a separate judicial declaration to recognize the
shares of the original incorporators would entail unnecessary delay and expense.
Issue:
1) Whether or not the basis of quorum for a stockholders’ meeting is the outstanding capital
stock as indicated in the articles of incorporation
Held:
1) Yes, the basis of quorum for a stockholders’ meeting is the outstanding capital stock as
indicated in the articles of incorporation and not that contained in the company’s stock and
transfer book. The articles of incorporation defines the charter of the corporation and the
contractual relationships between the State and the corporation, the stockholders and the State,
and between the corporation and its stockholders. The contents of the articles of incorporation
are binding, not only on the corporation, but also on its shareholders. Moreover, quorum is based
on the totality of the shares which have been subscribed and issued, whether it be founders’
shares or common shares
On the other hand, a stock and transfer book is the book which records the names and
addresses of all stockholders arranged alphabetically, the installments paid and unpaid on all
stock for which subscription has been made, and the date of payment thereof; a statement of
every alienation, sale or transfer of stock made, the date thereof and by and to whom made; and
such other entries as may be prescribed by law. It provides the only certain and accurate method
of establishing the various corporate acts and transactions and of showing the ownership of stock
and like matters. However, a stock and transfer book, like other corporate books and records, is
not in any sense a public record, and thus is not exclusive evidence of the matters and things
which ordinarily are or should be written therein. In fact, it is generally held that the records and
minutes of a corporation are not conclusive even against the corporation but are prima
facie evidence only,  and may be impeached or even contradicted by other competent evidence.
Thus, parol evidence may be admitted to supply omissions in the records or explain ambiguities,
or to contradict such records.
In the instant case, the articles of incorporation indicate that at the time of incorporation,
the incorporators were bona fide stockholders of seven hundred (700) founders’ shares and
seventy-six (76) common shares.  Hence, at that time, the corporation had 776 issued and
outstanding shares. To base the computation of quorum solely on the obviously deficient, if not
inaccurate stock and transfer book, and completely disregarding the issued and outstanding
shares as indicated in the articles of incorporation would work injustice to the owners and/or
successors in interest of the said shares.  The stock and transfer book of PMMSI cannot be used
as the sole basis for determining the quorum as it does not reflect the totality of shares which
have been subscribed, more so when the articles of incorporation show a significantly larger
amount of shares issued and outstanding as compared to that listed in the stock and transfer
book.
Moreover, one who is actually a stockholder cannot be denied his right to vote by the
corporation merely because the corporate officers failed to keep its records accurately. A
corporation’s records are not the only evidence of the ownership of stock in a corporation.  In the
instant case, no less than the articles of incorporation declare the incorporators to have in their
name the founders and several common shares.  Thus, to disregard the contents of the articles of
incorporation would be to pretend that the basic document which legally triggered the creation of
the corporation does not exist and accordingly to allow great injustice to be caused to the
incorporators and their heirs

22) Company Registration and Monitoring Department and SEC En Banc v. Ching Bee
Trading Corporation, GRN 205291, Nov. 12, 2014[disapproval of amendment of AOI]
Facts:
Ching Bee Trading Corporation (CBTC) was registered with the SEC on Dec. 23, 1960
and was to expire on Dec. 23, 2010. On Dec. 22, 2010, CBTC filed with the Company
Registration and Monitoring Department (CRMD) of the SEC, an application seeking the
approval of its amended articles of incorporation extending its term for another 50 years. CRMD
refused to accept the application because of CBTC’s failure to state in the required Director’s
Certificate that the stockholders, owning and representing at least 2/3 of its capital stock, voted
and approved the amendment.
On Dec. 23, 2010, a letter was filed pursuant to the CRMD processor’s suggestion. On
Jan. 6, 2011, the SEC denied the request, citing SEC Resolution No. 394 containing SEC’s
policy of denying the filing of any amended articles of incorporation extending the corporate life
of a corporation, whose original term had expired.
The SEC En Banc denied the request in an appeal.
CA’s decision: It reversed the the SEC’s decision and ordered the SEC to admit CBTC’s
amended articles of incorporation stating that CBTC should have been given reasonable time
within which to correct or modify any portion in the articles ff Sec. 17 of the Corporation Code.
SEC’s contention: It contends that the CA erred in granting CBTC’s prayer for an extension to
file the amended articles of incorporation. It points out that a corporation seeking to extend
corporate term must take all the necessary steps before its life expires at the end of the 50-year
period. Considering that CBTC failed to file the amended articles of incorporation and to seek
the approval of the SEC before its expiration, the SEC argues that no valid extension of its
corporate existence could be allowed.
CBTC’s contention: It relies on Sec. 17 of the Code, interpreting the same as a statutory mandate
for the SEC to give reasonable time to an applicant within which to correct or modify the
objectionable portions of the proposed amendment. CBTC argued that when the CRMD found
that the amended CBTC articles of incorporation was non-compliant with the form prescribed by
the Code, the SEC should have given CBTC reasonable time to complete the requirements.
Issue:
1) Whether or not respondent CBTC is entitled to an additional time to file its amended
articles of incorporation extending its corporate life despite its attempt to file it before the
original term expired.
Held:
1) Yes, respondent CBTC is entitled. Under Sec. 11 of the Corporation Code, the privilege
of extending corporate term must be done within the limited period of five (5) years prior to the
original or subsequent expiry date.
The Code is silent as to how early within the five (5) year period the application for
extension should be made. Reading plainly from Section 11 of the Code would reveal that an
applicant may seek the approval of the SEC for the extension of its life at any time within the
given five year period. Evidently, a corporation may seek extension even one day prior to the
date of expiration as the law does not impose an earlier limitation.
In this case, CBTC sought to extend its corporate term by filing the required documents
with the CRMD on December 22, 2010 — obviously within the period allowed and granted by
the Code to seek for extension. It had a day to seek the approval of the proposed extension of the
corporate existence. Unfortunately, the CRMD processor refused to receive the application on
the ground that there was failure to state in the required Director's Certificate that the
stockholders, owning and representing at least two (2/3) of CBTC’s capital stock, voted and
approved the amendment. To the SEC, the rejection was valid as it was authorized under Section
17 of the Code  if an applicant did not substantially comply with the requirements of the Code as
to the form.
Under' Section 17 of the Code, however, the SEC must give a reasonable time to an
applicant within which to make the necessary corrections should there be objectionable portions
in the amendment. As cited by the CA, a reasonable time is defined as so much time as is
necessary under the circumstances for a reasonably prudent and diligent man to do, conveniently,
what the contract or duty requires that should be done, having regard for the rights and
possibility of loss, if any to the other.
In this case, the CRMD failed to at least provide CBTC a reasonable time within which
compliance with the requirements for extension may be made in full. Instead, the processor only
verbally advised CBTC to submit a letter-request asking for an extension to file the deficient
documentary requirements. What the SEC should have done was to give a formal notice to
CBTC that the latter had one day to cure any defect before CBTC's life would expire. That one
(1) day, which was lost because of miscommunication, would have been enough to complete the
process of filing the application within the period specified by the Code and would have sufficed
for the approval of the corporate extension being requested. Therefore, CBTC remains entitled to
a day to submit all the requirements prescribed by the Code.
Moreover, while the Court agrees that extension (including the SEC approval) must
happen before the expiration of the corporate term, the burden of doing so does not only fall to
the applicant, but also on the SEC. The requirement pronounced in Alhambra, requiring that all
steps must be undertaken while life still subsists, is both the responsibility of the State, acting
through the SEC, and the corporation. To say that the corporation alone has this burden is unfair
as the Code does not impose this obligation solely on the corporation.
Accordingly, for as long as the corporation opts to extend its term while it is still alive
and during the period allowed by the Code, that is, the filing of the necessary requirements, the
burden shifts to the SEC to review, approve or disapprove the same before the corporation
breathes its last. If no approval is secured within that limited time, the fault would have to be on
the part of the SEC.
The problem here is the assertion of the SEC that nothing was even filed as the
application was rightly rejected by the CRMD. Then again, the Court believes that despite that
rightful rejection, CBTC was deprived of its right to a reasonable one (1)-day period to complete
the requirements in view of the suggestion made by the processor to instead submit a letter
requesting for extension. That suggestion caused a misunderstanding as to the proper recourse
that CBTC should have taken. Had the processor notified CBTC about the urgency of fulfilling
the requirements prior to the expiration of the corporate term, it would have been likely that the
requirements for the filing would have been completed.
The Court takes notice of the fact that the deficiency has been remedied by the
submission of the amended December 23, 2010 Director's Certificate. And with this compliance,
it is but fair that CBTC be considered to have sufficiently complied in good faith with all the
requirements for a valid extension, as if such was made prior to the expiration of its corporate
life or, to be precise, on December 23, 2010. This ruling runs in accord with the doctrine of
relation. Under the said principle, where the delay is due to the neglect of the officer with whom
the certificate is required to be filed, or to a wrongful refusal on his part to receive the
application, such as in this case, the amendments shall take effect from the date the documents
were filed.

Assignment: Read Secs. 11-21

23) De La Salle Montessori Int’l of Malolos v. De La Salle Brothers, Inc. GRN. 205548, Feb.
7, 2018. [distinguishability of corporate name]
Facts:
Petitioner reserved with the SEC its corporate name De La Salle Montessori International
Malolos, Inc. after which the SEC indorsed petitioner's articles of incorporation and by-laws to
DepEd for comments and recommendation. Consequently, the SEC issued a certificate of
incorporation to petitioner. DepEd then granted its courses (preschool, elementary, and
secondary).
In 2010, the respondents filed a petition with the SEC seeking to compel petitioner to
change its corporate name. They 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.
SEC OGC then issued an Order directing petitioner to change or modify its corporate
name. It held, among others, 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. 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. SEC OGC also held 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.
Petitioner filed an appeal before the SEC En Banc, which it affirmed SEC OGC’s
decision. It held, among others, that the 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. CA affirmed the Order of the SEC OGC and the Decision of the
SEC En Banc in toto.
Issue:
1) Whether or not petitioner should change its corporate name
2) Whether or not “De La Salle” is a generic term and cannot be exclusively used by
respondents
3) Whether or not SEC has the duty to prevent confusion in the use of corporate names.
Held:
1) Yes, petitioner should change its corporate name. Sec. 18 of the Corporation Code
provides that: “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. x x x.” Moreover, it has been held that the use of a name similar to one
adopted by another corporation, whether a business or a non-profit organization, if misleading or
likely to injure in the exercise of its corporate functions, regardless of intent, may be prevented
by the corporation having a prior right, by a suit for injunction against the new corporation to
prevent the use of the name. 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.
With respect to the first requisite, the Court has held that the right to the exclusive use of
a corporate name with freedom from infringement by similarity is determined by priority of
adoption
In this case, respondents' corporate names were registered on the following dates: (1) De
La Salle Brothers, Inc. on October 9, 1961 under SEC Registration No. 19569; (2) De La Salle
University, Inc. on December 19, 1975 under SEC Registration No. 65138; (3) La Salle
Academy, Inc. on January 26, 1960 under SEC Registration No. 16293; (4) De La SalleSantiago
Zobel School, Inc. on October 7, 1976 under SEC Registration No. 69997; and (5) De La Salle
Canlubang, Inc. on August 5, 1998 under SEC Registration No. Al998-01021.
On the other hand, petitioner was issued a Certificate of Registration only on July 5, 2007
under Company Registration No. CN200710647.[35] 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.
The second requisite is also satisfied since 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.
2) No, De La Salle” is not a generic term. Generic terms are those which constitute "the
common descriptive name of an article or substance," or comprise the "genus of which the
particular product is a species," or are "commonly used as the name or description of a kind of
goods," or "characters," or "refer to the basic nature of the wares or services provided rather than
to the more idiosyncratic characteristics of a particular product," and are not legally protectable.
It has been held that if a mark is so commonplace that it cannot be readily distinguished from
others, then it is apparent that it cannot identify a particular business; and he who first adopted it
cannot be injured by any subsequent appropriation or imitation by others, and the public will not
be deceived.
Contrary to [petitioner's] claim, the phrase "De La Salle" is not merely a generic term.
Respondents' use of the phrase being suggestive and may properly be regarded as fanciful,
arbitrary and whimsical, it is entitled to legal protection. A suggestive mark is a word, picture, or
other symbol that suggests, but does not directly describe something about the goods or services
in connection with which it is used as a mark and gives a hint as to the quality or nature of the
product. Suggestive trademarks therefore can be distinctive and are registrable.
 Petitioner's use of the phrase "De La Salle" in its corporate name is patently similar to
that of respondents that even with reasonable care and observation, confusion might arise. The
Court notes not only the similarity in the parties' names, but also the business they are engaged
in. They are all private educational institutions offering pre-elementary, elementary and
secondary courses. As aptly observed by the SEC En Banc, petitioner's name gives the
impression that it is a branch or affiliate of respondents. It is settled that proof of actual confusion
need not be shown. It suffices that confusion is probable or likely to occur.
3) YES, SEC has the duty to prevent confusion in the use of corporate names.
The enforcement of the protection accorded by Section 18 of the Corporation Code to
corporate names is lodged exclusively in the SEC. By express mandate, the SEC has absolute
jurisdiction, supervision and control over all corporations. 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. It has authority to de-register at all times, and under
all circumstances, corporate names which in its estimation are likely to generate confusion.

24) Indian Chamber of Commerce Phils. , Inc. v. Filipino Indian Chamber of Commerce in the
Philippines, Inc., GRN. 184008, August 3, 2016. [priority of adoption rule]
Facts:
Filipino-Indian Chamber of Commerce of the Philippines was originally registered as
Indian Chamber of Commerce of Manila. In 2001, their corporate term expired and it did not
apply for an extension.
However, in 2005, Mr. Naresh Mansukhani reserved the corporate name “Filipino Indian
Chamber of Commerce in the Philippines, Inc. for the period from Jan 20, 2005 to April 20,
2005 with the Company Registration Monitoring Department of the SEC. A certain Ram
Sitalidas claimed to be a representative of the defunct FICCPI (petitioner) alleged that the
corporate name has been used by the defunct FICCPI since 1951, and that the reservation by
another person who is not its member or representative is illegal. Mansukhani’s reservation was
granted.
CRMD ruled that: the defunct FICCPI has no legal personality to oppose the reservation
of the corporate name by Mansukhani
SEC En Banc denied appeal by Sitaldas
CA affirmed decision of SEC En Banc
Sec eventually issued certificate of Incorporation of respondent FICCPI. After, a certain
Mr. Pracash Dayacanl, allegedly represented the defunct FCPI, filed an application with the
CRMD for the reservation of the corporate name, “Indian Chamber of Commerce Phils., Inc.
This was formally opposed by Mansukhani. CRMD denied opposition because such name is not
deceptively or confusingly similar to their “Filipino Indian Chamber of Commerce in the
Philippines” AND Certificate of Incorporation was issued to petitioner ICCPI.
Sec En Banc granted appeal
CA affirmed appeal
Issue:
1) Whether or not respondent FICCPI acquired a prior right over the use of the corporate
name
Held:
1) Yes, respondent FICCPI acquired a prior right over the use of the corporate name. In
Industrial Refractories Corporation of the Philippines v. Court of Appeals, the Court applied the
priority of adoption rule to determine prior right, taking into consideration the dates when the
parties used their respective corporate names
In this case, FICCPI was incorporated on March 14, 2006. On the other hand, ICCPI was
incorporated only on April 5, 2006, or a month after FICCPI registered its corporate name. Thus,
applying the principle in the Refractories case, we hold that FICCPI, which was incorporated
earlier, acquired a prior right over the use of the corporate name.
ICCPI cannot argue that it first incorporated and held the "Filipino Indian Chamber of
Commerce," in 1977; and that it established the name's goodwill until it failed to renew its name
due to oversight.  It is settled that a corporation is ipso facto dissolved as soon as its term of
existence expires.   When the term of existence of the defunct FICCPI expired on November 24,
2001, under SEC Memorandum Circular No. 14-2000 its corporate name cannot be used by other
corporations within three years from that date, until November 24, 2004. FICCPI reserved the
name "Filipino Indian Chamber of Commerce in the Philippines, Inc." on January 20, 2005, or
beyond the three-year period. Thus, the SEC was correct when it allowed FICCPI to use the
reserved corporate name.
 Corporation Code expressly prohibits the use of a corporate name which is identical or
deceptively or confusingly similar to that of any existing corporation. In Philips Export B. V, v.
CA, the Court ruled that to fall within the prohibition, 2 requisites must be proven.
1. That the complainant corporation acquired 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
These two requisites are present in this case
In the first requisite, the priority of adoption rule can be applied to determine prior right,
taking into consideration the dates when the parties used their respective corporate names.
In this case, FICCPI was incorporated on March 14, 2006. While ICCPI was incorporated
only on April 5, 2006. Thus applying the priority of adoption rule, FICCPI which was
incorporated earlier acquired a prior right over the use of the corporate name.
Even if ICCPI was first incorporated and held the name FICCPI in 1977. It is settled that
a corporation is ipso facto dissolved as soon as its term of existence expires. ICCPI’s name is
identical and deceptively or confusingly similar to that of FICCPI. Both contain the same words.
The word “Filipino” is merely a description, referring to a Filipino citizen or one living in the
Philippines, to describe the corporation members. On the other hand the words “in the
Philippines” and “Phils. Inc.” are simply geographical locations of the corporations.
Under the facts of this case, these words cannot be separated from each other such that
each word can be considered to add distinction to the corporate names. ICCPI’s corporate name
is deceptively or confusingly similar to that of FICCPI. It is settled that to determire 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. In so doing, the court must examine
the record as well as the names themselves. Proof of actual confusion need not be shown. It
suffices that confusion is probably or likely to occur. In this case, the overriding consideration in
determining wheiher a person, using ordinary care and discrimination, might be misled is the
circumstance that both ICCPI and FICCPI have a common primary purpose, that is, the
promotion of Filipino-Indian business in the Philippines.

25) Seventh Day Adventist Conference Church of Southern Philippines, Inc. v. Northeastern
Mindanao Mission of Seventh Day Adventist, Inc. GRN. 150416, July 21, 2006. [de facto
corporation]
Facts:
A lot covered by TCT No. 4468 was donated by the owner-spouses Cosio to the South
Philippine Union Mission of Seventh Day Adventist Church (SPUM-SDA Bayugan). The
donation was accepted by Rayos, an elder of the Seventh Day Adventist Church, on behalf of the
donee.
Twenty-one years later, however, the same parcel of land was sold by the spouses Cosio
to the Seventh Day Adventist Church of Northeastern Mindanao Mission (SDA-NEMM)
whereby TCT No. 4468 was thereafter issued in the name of SDA-NEMM.
Petitioners, the alleged donee’s successors-in-interest, asserted ownership over the
property. The respondents argued that at the time of the donation, SPUM-SDA Bayugan could
not legally be a donee because, not having been incorporated yet, it had no juridical
personality. Neither were petitioners members of the local church then, hence, the donation
could not have been made particularly to them. The petitioners thereafter filed the case.
RTC: The trial court upheld the sale in favor of respondents.
CA: On appeal, the CA affirmed the RTC decision but deleted the award of moral damages and
attorney’s fees.
Petitioners’ motion for reconsideration was likewise denied. Thus, this petition.
Declaring themselves a de facto corporation, petitioners allege that they should benefit from the
donation.
Issue:
1) Whether or not SPUM-SDA Bayugan is a de facto corporation and has juridical
personality or capacity to accept the donation
2) Whether or not petitioner’s claim of succession and donation was valid.
Held:
1) No, SPUM-SDA Bayugan is not a de facto corporation. Before one can qualify as a de
facto corporation, it must meet the following requirements: (a) the existence of a valid law under
which it may be incorporated; (b) an attempt in good faith to incorporate; and (c) assumption of
corporate powers. Moreover, the filing of articles of incorporation and the issuance of the
certificate of incorporation are essential for the existence of a de facto corporation. It has been
held that an organization not registered with the SEC cannot be considered a corporation in any
concept, not even as a corporation de facto.
In this case, while there existed the old Corporation Law (Act 1459), a law under which
SPUM-SDA Bayugan could have been organized, there is no proof that there was an attempt to
incorporate at that time. Petitioners themselves admitted that at the time of the donation, they
were not registered with the SEC, nor did they even attempt to organize to comply with legal
requirements.
The de  facto doctrine thus effects a compromise between two conflicting public
interest[s]-the one opposed to an unauthorized assumption of corporate privileges; the other in
favor of doing justice to the parties and of establishing a general assurance of security in business
dealing with corporations. Generally, the doctrine exists to protect the public dealing with
supposed corporate entities, not to favor the defective or non-existent corporation
2) No, petitioner’s claim is not valid. Corporate existence begins only from the moment a
certificate of incorporation is issued. No such certificate was ever issued to petitioners or their
supposed predecessor-in-interest at the time of the donation. Petitioners obviously could not have
claimed succession to an entity that never came to exist.
Neither could the principle of separate juridical personality apply since there was never
any corporation to speak of. And, as already stated, some of the representatives of petitioner
Seventh Day Adventist Conference Church of Southern Philippines, Inc. were not even members
of the local church then, thus, they could not even claim that the donation was particularly for
them.

26) Missionary Sisters of our Lady of Fatima v. Alzona,GRN 224307, Aug. 6, 2018. [corporation
by estoppel]
Facts:
The Missionary Sisters of Our Lady of Fatima (petitioner), otherwise known as the Peach
Sisters of Laguna, is a religious and charitable group established under the patronage of the
Roman Catholic Bishop of San Pablo on May 30, 1989. Mother Ma. Concepcion R. Realon
(Mother Concepcion) is the petitioner's Superior General. The respondents, on the other hand,
are the legal heirs of the late Purificacion Y. Alzona (Purificacion).
Purificacion, a spinster, is the registered owner of parcels of land covered by Transfer
Certification of Title (TCT) Nos. T-57820* and T-162375; and a co-owner of another property
covered by TCT No. T-162380, all of which are located in Calamba City, Laguna.
In October 1999, Purificacion called Mother Concepcion and handed her a handwritten
letter dated October 1999 stating that she is donating her house and lot at F. Mercado Street and
Riceland at Banlic, both at Calamba, Laguna, to the petitioner through Mother Concepcion. On
the same occasion, Purificacion introduced Mother Concepcion to her nephew, Francisco Del
Mundo (Francisco), and niece, Ma. Lourdes Alzona Aguto-Africa (Lourdes). Purificacion,
instructed Francisco to give a share of the harvest to Mother Concepcion, and informed Lourdes
that she had given her house to Mother Concepcion.
Sometime in August 2001, at the request of Purificacion, Mother Concepcion went to see
Atty. Nonato Arcillas (Atty. Arcillas) in Los Baños, Laguna. Per advice by Atty. Arcillas,
Mother Concepcion went to SEC and filed the corresponding registration application on August
28, 2001 upon learning that the group is not yet incorporated.
On August 29, 2001, Purificacion executed a Deed of Donation Inter Vivos (Deed) in
favor of the petitioner, conveying her properties. The Deed was notarized by Atty. Arcillas and
witnessed by Purificacion's nephews Francisco and Diosdado Alzona, and grandnephew, Atty.
Fernando M. Alonzo. The donation was accepted on even date by Mother Concepcion for and in
behalf of the petitioner.
On October 30, 2001, Purificacion died without any issue, and survived only by her
brother of full blood, Amando, who filed a Complaint before the RTC, seeking to annul the Deed
executed between Purificacion and the petitioner, on the ground that at the time the donation was
made, the latter was not registered with the SEC and therefore has no juridical personality and
cannot legally accept the donation.
RTC dismissed the petition. It was held that at the time of the execution of the Deed, the
petitioner was a de facto corporation and as such has the personality to be a beneficiary and has
the power to acquire and possess property.
CA modified. Declaring the donation void. It was held that petitioner cannot be considered as a
de facto corporation considering that at the time of the donation, there was no bona fide attempt
on its part to incorporate.
Issue:
1) Whether or not the petitioner is a de facto corporation.
2) Whether or not petitioner is a corporation by estoppel.
Held:
1) No, petition is not a de facto corporation. Jurisprudence settled that "[t]he filing of
articles of incorporation and the issuance of the certificate of incorporation are essential for the
existence of a de facto corporation.” In fine, it is the act of registration with SEC through the
issuance of a certificate of incorporation that marks the beginning of an entity's corporate
existence.
In this case, petitioner filed its Articles of Incorporation and by-laws on August 28, 2001.
However, the SEC issued the corresponding Certificate of Incorporation only on August 31,
2001, two (2) days after Purificacion executed a Deed of Donation on August 29, 2001. Clearly,
at the time the donation was made, the Petitioner cannot be considered a corporation de facto. 
2) Yes, petitioner is a corporation by estoppel. Under Section 21 of the Corporation Code:
All persons who assume to act as a corporation knowing it to be without authority to do
so shall be liable as general partners for all debts, liabilities and damages incurred or
arising as a result thereof: Provided, however, That when any such ostensible corporation
is sued on any transaction entered by it as a corporation or on any tort committed by it as
such, it shall not be allowed to use as a defense its lack of corporate personality.
One who assumes an obligation to an ostensible corporation as such, cannot resist
performance thereof on the ground that there was in fact no corporation
The doctrine of corporation by estoppel is founded on principles of equity and is designed
to prevent injustice and unfairness. It applies when a non-existent corporation enters into
contracts or dealings with third persons. In which case, the person who has contracted or
otherwise dealt with the non-existent corporation is estopped to deny the latter's legal existence
in any action leading out of or involving such contract or dealing. While the doctrine is generally
applied to protect the sanctity of dealings with the public, nothing prevents its application in the
reverse, in fact the very wording of the law which sets forth the doctrine of corporation by
estoppel permits such interpretation. Such that a person who has assumed an obligation in favor
of a non-existent corporation, having transacted with the latter as if it was duly incorporated, is
prevented from denying the existence of the latter to avoid the enforcement of the contract.
Jurisprudence dictates that the doctrine of corporation by estoppel applies for as long as there is
no fraud and when the existence of the association is attacked for causes attendant at the time the
contract or dealing sought to be enforced was entered into, and not thereafter.
In this controversy, Purificacion dealt with the petitioner as if it were a corporation. This
is evident from the fact that Purificacion executed two (2) documents conveying her properties in
favor of the petitioner – first, on October 11, 1999 via handwritten letter, and second, on August
29, 2001 through a Deed; the latter having been executed the day after the petitioner filed its
application for registration with the SEC.
The doctrine of corporation by estoppel rests on the idea that if the Court were to
disregard the existence of an entity which entered into a transaction with a third party, unjust
enrichment would result as some form of benefit have already accrued on the part of one of the
parties. Thus, in that instance, the Court affords upon the unorganized entity corporate fiction
and juridical personality for the sole purpose of upholding the contract or transaction.
In this case, while the underlying contract which is sought to be enforced is that of a
donation, and thus rooted on liberality, it cannot be said that Purificacion, as the donor failed to
acquire any benefit therefrom so as to prevent the application of the doctrine of corporation by
estoppel. To recall, the subject properties were given by Purificacion, as a token of appreciation
for the services rendered to her during her illness. In fine, the subject deed partakes of the nature
of a remuneratory or compensatory donation, having been made "for the purpose of rewarding
the donee for past services, which services do not amount to a demandable debt."
Therefore, under the premises, past services constitutes consideration, which in tum can
be regarded as "benefit" on the part of the donor, consequently, there exists no obstacle to the
application of the doctrine of corporation by estoppel; although strictly speaking, the petitioner
did not perform these services on the expectation of something in return.