G.R. No.

L-26370, 31 July 1970 (74 SCRA 252)

Philippine First Insurance Company, Inc. v. Ma. Carmen Hartigan, CGH and O.
Engkee

Barredo, J.:

DOCTRINE: The Court held that a change of corporate name is not against public
policy. As such, what is held to be contrary to public policy is the use by one corporation
of the name of another corporation as its trade name.

Likewise, it was ruled that change of name does not result in a corporation’s dissolution.
In settled jurisprudence, the Court held that an authorized change in the name of a
corporation has no more effect upon its identity as a corporation than a change of name
of a natural person has upon his identity. It does not affect the rights of the corporation
or lessen or add to its obligations. After a corporation has effected a change in its name
it should sue and be sued in its new name.

FACTS:

Plaintiff was originally organized as an insurance corporation under the name of ‘The
Yek Tong Lin Fire and Marine Insurance Co., Ltd.,’ in 1953. But on 26 May 1961, its
Articles of Incorporation were amended changing the name of the corporation to
‘Philippine First Insurance, Co., Inc.’.

The case arose when plaintiff, acting in the name of Yek Tong, signed as co-maker
together with defendants, a promissory note in favor of China Banking Corporation.
Subsequently, as form of security, defendants signed an indemnity agreement in favor
of plaintiff in case damages or loses arises thereof.

Defendant Hartigan failed to pay, hence, the complaint for collection of sum of money
with interest and other fees.

Defendants deny the allegations, claiming, among others that there is no privity of
contract between them and plaintiff since the plaintiff did not conduct its business under
the name of Yek Tong Insurance, hence not entitled to the indemnification agreement
which is named in favor of Yek Tong.

Decision of the CFI: The Court of First Instance of Manila dismissed the action against
plaintiff PFIC, based on the following grounds, among others:

The change of name of the Yek Tong Lin Fire & Marine Insurance Co. to PFIC is of
dubious validity, because such change in effect dissolved the original corporation by a
process of dissolution not authorized by the Corporation Law;
Assuming the change is valid, Yek Tong is considered dissolved, hence, at the time the
indemnity agreement was signed, it has no capacity to enter into such agreement
anymore;

Assuming further that the chance is valid, Yek Tong is deemed as continuing as a body
corporate for three (3) years for the purpose of prosecuting and defending suits, hence,
Yek Tong should be the proper party in interest.

Its Motion for Reconsideration having been denied, the plaintiff filed this present case.

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

RULING: YES.

RATIO:

Under section 18 of the Corporation Code, the law authorizes corporations to amend
their charter, its procedure and restrictions for such amendments. There is restriction on
the term of their existence and the increase or decrease of the capital stock but there is
no prohibition against the change of name.

The general rule as to corporations is that each corporation shall have a name by which
it is to sue and be sued and do all legal acts. The name of a corporation in this respect
designates the corporation in the same manner as the name of an individual designates
the person.” Since an individual has the right to change his name under certain
conditions, there is no compelling reason why a corporation may not enjoy the same
right.

Further, the Court held that a change of corporate name is not against public policy. As
such, what is held to be contrary to public policy is the use by one corporation of the
name of another corporation as its trade name.

Likewise, it was ruled that change of name does not result in a corporation’s dissolution.
In settled jurisprudence, the Court held that an authorized change in the name of a
corporation has no more effect upon its identity as a corporation than a change of name
of a natural person has upon his identity. It does not affect the rights of the corporation
or lessen or add to its obligations. After a corporation has effected a change in its name
it should sue and be sued in its new name.

From the foregoing, the Court believes that the lower court erred in holding that plaintiff
is not the right party in interest to sue defendants-appellees. As correctly pointed out by
appellant, the approval by the stockholders of the amendment of its articles of
incorporation changing the name “The Yek Tong Lin Fire & Marine Insurance Co., Ltd.”
to “Philippine First Insurance Co., Inc.” on March 8, 1961, did not automatically change
the name of said corporation on that date. Hence, the lower court likewise erred in
dismissing appellant’s complaint.

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.