CAGAYAN FISHING DEVELOPMENT CO., INC., vs.

TEODORO SANDIKO

FACTS:

Manuel Tabora is the registered owner of four parcels of land and he wanted to build a Fishery. He
loaned from PNB P8,000 and to guarantee the payment of the loan, he mortgaged the said parcels of
land. Three subsequent mortgages were executed in favor of the same bank and to Severina Buzon,
whom Tabora is indebted to.

Tabora sold the four parcels of land to the plaintiff company, said to be under process of incorporation,
in consideration of one peso (P1) subject to the mortgages in favor of PNB and Severina Buzon and, to
the condition that the certificate of title to said lands shall not be transferred to the name of the plaintiff
company until the latter has fully and completely paid Tabora’s indebtedness to PNB.

The articles of incorporation were filed and the company sold the parcels of land to Sandiko on the
reciprocal obligation that Sandiko will shoulder the three mortgages. A deed of sale executed before a
notary public by the terms of which the plaintiff sold, ceded and transferred to the defendant all its
rights, titles and interest in and to the four parcels of land.

He executed a promissory note that he shall be 25,300 after a year with interest and on the promissory
notes, the parcels were mortgage as security.

A promissory note for P25,300 was drawn by the defendant in favor of the plaintiff, payable after one
year from the date thereof. Further, a deed of mortgage executed before a notary public in accordance
with which the four parcels of land were given as security for the payment of the said promissory note.
All these three instruments were dated February 15, 1932.

Sandiko failed to pay, thus the action for payment. The lower court held that deed of sale was invalid.
The corporation filed a motion for reconsideration.

ISSUE:

Can promoters of a corporation act as agents of a corporation?

RULING:

The contract here was entered into not only between Manuel Tabora and a non-existent corporation
but between Manuel Tabora as owner of four parcels of land on the one hand and the same Manuel
Tabora, his wife and others, as mere promoters of a corporation on the other hand. For reasons that are
self-evident, these promoters could not have acted as agents for a projected corporation since that
which had no legal existence could have no agent. A corporation, until organized, has no life and
therefore no faculties. It is, as it were, a child in ventre sa mere. This is not saying that under no
circumstances may the acts of promoters of a corporation be ratified by the corporation when
subsequently organized. There are, of course, exceptions, but under the peculiar facts and
circumstances of the present case we decline to extend the doctrine of ratification which would result in
the commission of injustice or fraud to the candid and unwary.

The transfer by Manuel Tabora to the Cagayan Fishing Development Company, Inc. was null because at
the time it was effected the corporation was non-existent, we deem it unnecessary to discuss this point.
RIZAL LIGHT & ICE CO., INC., petitioner, vs. THE MUNICIPALITY OF MORONG, RIZAL and THE PUBLIC
SERVICE COMMISSION,

FACTS:

Petitioner Rizal Light & Ice Co., Inc. is a domestic corporation with business address at Morong, Rizal. On
August 15, 1949, it was granted by the Commission a certificate of public convenience and necessity for
the installation, operation and maintenance of an electric light, heat and power service in the
municipality of Morong, Rizal. However, the said certificate was revoked due to Rizal Light’s violation of
the conditions of its certificate of public convenience and the regulations of the Commission, and for its
failure to comply with the directives to raise its service voltage and maintain them within the limits
prescribed in the Revised Order No. 1 of the Commission, and to acquire and install a kilowatt meter to
indicate the load in kilowatts at any time of the generating unit. Meanwhile, on 10 September 1962,
Morong Electric, having been granted a municipal franchise on May 6, 1962, by respondent municipality
to install, operate and maintain an electric heat, light and power service in said municipality — approved
by the Provincial Board of Rizal on August 31, 1962 — filed with the Commission an application for a
certificate of public convenience and necessity for said service. Rizal Light then sought the dismissal of
the application upon the ground that applicant Morong Electric had no legal personality when it filed its
application on September 10, 1962, because its certificate of incorporation was issued by the Securities
and Exchange Commission only on October 17, 1962.

ISSUE:

Whether the franchise granted to Moring Electric was rendered invalid by the fact that it had no
corporate existence on the day the franchise was granted under its name.

RULING:

NO. Rizal Light’s contention that Morong Electric did not yet have a legal personality on May 6, 1962,
when a municipal franchise was granted to it is correct. The juridical personality and legal existence of
Morong Electric began only on October 17, 1962, when its certificate of incorporation was issued by the
SEC. Before that date, or pending the issuance of said certificate of incorporation, the incorporators
cannot be considered as de facto corporation. HOWEVER, fact that Morong Electric had no corporate
existence on the day the franchise was granted in its name does not render the franchise invalid,
because later Morong Electric obtained its certificate of incorporation and then accepted the franchise
in accordance with the terms and conditions thereof. While a franchise cannot take effect until the
grantee corporation is organized, the franchise may, nevertheless, be applied for before the company is
fully organized. A grant of a street franchise is valid although the corporation is not created until
afterwards. The incorporation of Morong Electric on October 17, 1962, and its acceptance of the
franchise as shown by its action in prosecuting the application filed with the Commission for the
approval of said franchise, not only perfected a contract between the respondent municipality and
Morong Electric but also cured the deficiency pointed out by the petitioner in the application of Morong
EIectric.
**NOTE: “The conclusion herein reached regarding the validity of the franchise granted to Morong
Electric is not incompatible with the holding of this Court in Cagayan Fishing Development Co., Inc. vs.
Teodoro Sandiko upon which the petitioner leans heavily in support of its position. In said case this
Court held that a corporation should have a full and complete organization and existence as an entity
before it can enter any kind of a contract or transact any business. It should be pointed out, however,
that this Court did not say in that case that the rule is absolute or that under no circumstances may the
acts of promoters of a corporation be ratified or accepted by the corporation when subsequently
organized. Of course, there are exceptions. It will be noted that American courts generally hold that a
contract made by the promoters of a corporation on its behalf may be adopted, accepted or ratified by
the corporation when organized

FERMIN Z. CARAM, JR. and ROSA O. DE CARAM, petitioners vs. THE HONORABLE COURT OF APPEALS and
ALBERTO V. ARELLANO, respondents.

FACTS:

Fermin Caram Jr. and Rosa De Caram (CARAMS) were ordered to jointly and severally pay Arellano the
amount of P50,000.00 for the preparation of the project study and his technical services that led to the
organization of the defendant corporation, plus P10,000.00 attorney's fees; The CARAMS claim that this
order has no support in fact and law because they had no contract whatsoever with the private
respondent regarding the above-mentioned services. Their position is that as mere subsequent investors
in the corporation that was later created, they should not be held solidarity liable with the Filipinas
Orient Airways, a separate juridical entity, and with Barretto and Garcia, their co-defendants in the
lower court.

ISSUE:

Whether or not CARAMS (petitioners) should be held personally liable with the Filipinas Orient Airways.

RULING:

NO. Petitioners were not really involved in the initial steps that finally led to the incorporation of the
Filipinas Orient Airways. Elsewhere in the decision, Barretto was described as "the moving spirit." The
finding of the respondent court is that the project study was undertaken by the private respondent at
the request of Barretto and Garcia who, upon its completion, presented it to the petitioners to induce
them to invest in the proposed airline. The study could have been presented to other prospective
investors. At any rate, the airline was eventually organized based on the project study with the
petitioners as major stockholders and, together with Barretto and Garcia, as principal officers. CARAMS
were not involved in the initial stages of the organization of the airline, which were being directed by
Barretto as the main promoter. It was he who was putting all the pieces together, so to speak. The
petitioners were merely among the financiers whose interest was to be invited and who were in fact
persuaded, on the strength of the project study, to invest in the proposed airline. Significantly, there
was no showing that the Filipinas Orient Airways was a fictitious corporation and did not have a separate
juridical personality, to justify making the petitioners, as principal stockholders thereof, responsible for
its obligations. As a bona fide corporation, the Filipinas Orient Airways should alone be liable for its
corporate acts as duly authorized by its officers and directors.
CARAMS cannot be held personally liable for the compensation claimed by the private respondent for
the services performed by him in the organization of the corporation. To repeat, they did not contract
such services. It was only the results of such services that Barretto and Garcia presented to them, and
which persuaded them to invest in the proposed airline. The most that can be said is that they benefited
from such services, but that surely is no justification to hold them personally liable therefor. Otherwise,
all the other stockholders of the corporation, including those who came in later, and regardless of the
amount of their shareholdings, would be equally and personally liable also with the petitioners for the
claims of the private respondent.

NAZARIO TRILLANA, administrator-appellee, vs. QUEZON COLLEGE, INC., claimant-appellant

FACTS:

On 1 June 1948, Damasa Crisostomo wrote a letter to Quezon College asking the latter to enter her
subscription to 200 shares of its capital stock and undertaking to enclose an initial payment and pay the
balance in accordance with the law and the rules and regulations of the Quezon College. Damasa
Crisostomo died on October 26, 1948. As no payment appears to have been made on the subscription
mentioned in the foregoing letter, the Quezon College, Inc. presented a claim before the Court of First
Instance of Bulacan in her testate proceeding, for the collection of the sum of P20,000, representing the
value of the subscription to the capital stock of the Quezon College, Inc. This claim was opposed by the
administrator of the estate, and the Court of First Instance of Bulacan, after hearing issued an order
dismissing the claim of the Quezon College, Inc. on the ground that the subscription in question was
neither registered in nor authorized by the Securities and Exchange Commission. From this order the
Quezon College, Inc. has appealed.

ISSUE:

Whether or not Damasa’s subscription to Quezon College, Inc. had been successfully registered or at
least perfected.

RULING:

There is nothing in the record to show that the Quezon College, Inc. accepted the term of payment
suggested by Damasa Crisostomo, or that if there was any acceptance the same came to her knowledge
during her lifetime. As the application of Damasa Crisostomo is obviously at variance with the terms
evidenced in the form letter issued by the Quezon College, Inc., there was absolute necessity on the part
of the College to express its agreement to Damasa's offer in order to bind the latter. Conversely, said
acceptance was essential, because it would be unfair to immediately obligate the Quezon College, Inc.
under Damasa's promise to pay the price of the subscription after she had caused fish to be caught. In
other words, the relation between Damasa Crisostomo and the Quezon College, Inc. had only thus
reached the preliminary stage whereby the latter offered its stock for subscription on the terms stated in
the form letter, and Damasa applied for subscription fixing her own plan of payment, — a relation, in the
absence as in the present case of acceptance by the Quezon College, Inc. of the counteroffer of Damasa
Crisostomo, that had not ripened into an enforceable contract
BAYLA VS. SILANG TRAFFIC, CO.

Facts:

Petitioners are individual who agreed and paid severally to the Respondent Corporation sums of money
as account of shares of stock. Petitioners further agreed to pay their shares in installments. However,
upon failure to pay, the Respondent automatically reverted in its favor the subscribed shares of stock
and installments already paid by the Petitioners. The latter instituted an action for the recovery of sums
of money.

Issue:

Whether the Contract between the parties is Sale or Subscription

Held:

SALE. Whether a particular contract is a subscription, or a sale of stock is a matter of construction and
depends upon its terms and the intention of the parties. The Agreement of the parties is entitled
“Agreement for Installment Sale of Shares in the Silang Traffic Company, Inc.” and it was entered on
March 1935, long after the incorporation of the respondent, which took place in 1927. The Court ruled
that a subscription to stock in an existing corporation is, as between the subscriber and the corporation,
simply a contract of purchase and sale. The lower courts erred in overlooking the distinction between
subscription and purchase "A subscription, properly speaking, is the mutual agreement of the
subscribers to take and pay for the stock of a corporation, while a purchase is an independent
agreement between the individual and the corporation to buy shares of stock from it at stipulated
price."

VELASCO VS. POIZAT

Facts: The Philippine Chemical Product Company was originally organized by several residents of Manila
with a capital of P50,000 divided into 50 shares. The Defendant Poizat was a stockholder therein and
acted as treasurer and manager. It appears however that Poizat was not able to give the full amount of
his stock. 0n 1914, a meeting of the board of the directors was held and two resolutions was made, (1) a
proposal that the directors/shareholders should make new subscription and (2) defendant Poizat, who
was absent during the meeting, should be required to pay the remaining subscription for which he was
still indebted to the company. Thereafter, the Company went into voluntary insolvency and assigned
Petitioner Velasco as the assignee. Velasco instituted an action against Poizat for the recovery of the
remaining subscription.

Issue:

WON Respondent Poizat is deemed release in its subscription obligation

Held:

NO. Section 36 of the Corporation Law clearly recognizes that a stock subscription is subsisting liability
from the time the subscription is made, since it requires the subscriber to pay interest quarterly from
that date unless he is relieved from such liability by the by-laws of the corporation. The subscriber is as
much bound to pay the amount of the share subscribed by him as he would be to pay any other debt,
and the right of the company to demand payment is no less incontestable.

Further, the Court ruled that when insolvency supervenes upon a corporation and the court assumes
jurisdiction to wind up, all unpaid stock subscriptions become payable on demand, and are at once
recoverable in an action instituted by the assignee or receiver appointed by the court. The doctrine is
that when insolvency supervenes, all unpaid subscriptions become at once due and enforceable. The
general doctrine is that the corporation has no legal capacity to release an original subscriber to its
capital stock from the obligation of paying for his shares, in whole or in part,

PNB VS. BITULOK SAWMILL, INC

Facts:

Petitioner-creditor Phil. National Bank extended loan to the Phil. Lumber Distributing Agency Inc. as
capital for its lumber industry. Thereafter, Petitioner was allowed to substitute the receiver of the Phil.
Lumber Distributing Agency Inc. By virtue of which, Petitioner instituted 9 actions against Respondents
seeking for the recovery of the balance of their stock subscriptions to the said agency. The Lower Court
dismissed the action merely based on equity.

Issue:

WON the Respondents are released from their subscription obligation

Held:

NO. The Court relied on its own ruling in the leading case of Velasco v. Poizat, where it held: "It is
established doctrine that subscriptions to the capital of a corporation constitute a fund to which
creditors have a right to look for satisfaction of their claims and that the assignee in insolvency can
maintain an action upon any unpaid stock subscription in order to realize assets for the payment of its
debt. Further, a corporation has no power to release an original subscriber to its capital stock from the
obligation of paying for his shares, without a valuable consideration for such release; and as against
creditors a reduction of the capital stock can take place only in the manner and under the conditions
prescribed by the statute or the charter or the articles of incorporation.
GOVERNMENT OF THE PHIL VS. MANILA RAILROAD

Facts:

Petitioner filed a Petition in SC praying that a Writ be issued to compel Respondent Manila Railroad
Company to provide and equip the telegraph poles of said company. The petitioner relies upon Sec. 84
of Act No. 1459 which is the General Corporation law. By virtue of which, according to the petitioner,
the respondent company is required to erect and maintain posts for its telegraph wires, of sufficient
length and strength, and equipped with sufficient crosspieces to carry the number of wires which the
Government may consider necessary for the public service, and that six wires are now necessary for the
public service. On the other hand, respondent contends that Sec 84 of Act No. 1459 has been repealed
by Act No. 1510 which is the special charter of the Manila Railroad Company. Under the provisions of
this Charter, the respondent may place four wires only.

Issue:

Whether Respondent is governed by its own special charter and not by general law

Held:

YES. Inasmuch as Act No. 1510 is the charter of Manila Railroad Company and constitute a contract
between it and the Government, the company is governed by its contract and not by the provisions of
any general law upon questions covered by said contract. Section 84 of the Corporation Law (Act No.
1459) was intended to apply to all railways in the Philippine Islands which did not have a special charter
contract. Act No. 1510 applies only to respondent, and being a special charter of said company, its
adoption had the effect of superseding the provisions of the general Corporation Law which are
applicable to railroads in general. The special charter (Act No. 1510) had the effect of superseding the
general Corporation Law upon all matters covered by said special charter. Said Act, inasmuch as it
contained a special provision relating to the erection of telegraph and telephone poles, and the number
of wires which the Government might place thereon, superseded the general law upon that question.
The charter of a corporation is a contract between three parties: (a) it is a contract between the state
and the corporation to which the charter is granted; (b) it is a contact between the stockholders and the
state and (c) it is also a contract between the corporation and its stockholders.
Rural Bank of Salinas vs. CA, 210 SCRA 510 (1992)

FACTS:

On June 10, 1979, Clemente G. Guerrero, President of the Rural Bank of Salinas, Inc., executed a Special
Power of Attorney in favor of his wife, private respondent Melania Guerrero, giving and granting the
latter full power and authority to sell or otherwise dispose of and/or mortgage 473 shares of stock of the
Bank registered in his name (represented by the Bank’s stock certificates nos. 26, 49 and 65), to execute
the proper documents therefor, and to receive and sign receipts for the dispositions.

On February 27, 1980, and pursuant to said Special Power of Attorney, private respondent Melania
Guerrero, as Attorney-in-Fact, executed a Deed of Assignment for 472 shares out of the 473 shares, in
favor of private respondents Luz Andico (457 shares), Wilhelmina Rosales (10 shares) and Francisco
Guerrero, Jr. (5 shares).

On December 5, 1980, private respondent Melania Guerrero filed with the Securities and Exchange
Commission (SEC) an action for mandamus against petitioners Rural Bank of Salinas, its President and
Corporate Secretary. The case was docketed as SEC Case No. 1979.

ISSUE:

Whether or not the SEC have jurisdiction. Whether or not an action for mandamus is proper.

HELD:

Yes. Section 5 (b) of P.D. No. 902-A grants to the SEC the original and exclusive jurisdiction to hear and
decide cases involving intercorporate controversies. An intracorporeal controversy has been defined as
one which arises between a stockholder and the corporation. There is no distinction, qualification, nor
any exception whatsoever (Rivera vs. Florendo, 144 SCRA 643 [1986]). The case at bar involves shares of
stock, their registration, cancellation and issuances thereof by petitioner Rural Bank of Salinas. It is
therefore within the power of respondent SEC to adjudicate.

Respondent SEC correctly ruled in favor of the registering of the shares of stock in question in private
respondent’s names. Such ruling finds support under Section 63 of the Corporation Code, to wit:

“SEC. 63 . . . Shares of stock so issued are personal property and may be transferred by delivery of the
certificate of certificates indorsed by the owner or his attorney-in-fact or other person legally authorized
to make the transfer. No transfer, however, shall be valid, except as between the parties, until the
transfer is recorded in the books of the corporation . . .”

Yes. The right of a transferee/assignee to have stocks transferred to his name is an inherent right
flowing from his ownership of the stocks. Thus:

“Whenever a corporation refuses to transfer and register stock in cases like the present, mandamus will
lie to compel the officers of the corporation to transfer said stock in the books of the corporation” (26,
Cyc. 347, Hyer vs. Bryan, 19 Phil. 138; Fleischer vs. Botica Nolasco, 47 Phil. 583, 594).

The corporation’s obligation to register is ministerial.

For the petitioner Rural Bank of Salinas to refuse registration of the transferred shares in its stock and
transfer book, which duty is ministerial on its part, is to render nugatory and ineffectual the spirit and
intent of Section 63 of the Corporation Code. Thus, respondent Court of Appeals did not err in upholding
the Decision of respondent SEC affirming the Decision of its Hearing Officer directing the registration of
the 473 shares in the stock and transfer book in the names of private respondents. At all events, the
registration is without prejudice to the proceedings in court to determine the validity of the Deeds of
Assignment of the shares of stock in question.

Red Line Transport v. Rural Transit – G.R. No. 41570, September 6, 1934

Fact:

Petitioner Red Line Transport Co,(RED) opposed the application of Respondent Rural Transit Co (RURAL)
for a certificate of public conveyance (CPC) to facilitate bus trips from Manila to Tuguegarao. After the
Publice Service Commission approved Rural’s CPC, RED filed an motion for hearing in which it called the
attention of the CFI that the RURAL has an application of voluntary dissolution of corporation in Manila.
During the hearing, it was found out that Bachrach Motors Company is the real operator of the said bus
company. After admitting that Bachrach was the actual operator of the bus line and only using Rural as a
tradename, the CFI order the commission to amend all the documents submitted as RURAL and change
it to Bachrach and that the RURAL application assumed Bachrach as it tradename. Hence this case.

Issue:

Whether a corporation can assume a Name different from want it registered?

Held:

No. There no law that empowers the Public Service Commission or any court in this jurisdiction to
authorize one corporation to assume the name of another corporation as a trade name. Both the Rural
Transit Company, Ltd., and the Bachrach Motor Co., Inc., are Philippine corporations and the very law of
their creation and continued existence requires each to adopt and certify a distinctive name. The
incorporators “constitute a body politic and corporate under the name stated in the certificate.” A
corporation has the power “of succession by its corporate name.” The name of a corporation is
therefore essential to its existence. It cannot change its name except in the manner provided by the
statute. By that name alone is it authorized to transact business. The law gives a corporation no express
or implied authority to assume another name that is unappropriated: still less that of another
corporation, which is expressly set apart for it and protected by the law. If any corporation could assume
at pleasure as an unregistered trade name the name of another corporation, this practice would result
in confusion and open the door to frauds and evasions and difficulties of administration and supervision.
The policy of the law expressed in our corporation statute and the Code of Commerce is clearly against
such a practice.
Philippine First Insurance Company, Inc. v. Ma. Carmen Hartigan, CGH and O. Engkee

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 sums 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 or not a Philippine Corporation may change its name and still retain its original personality and
individuality?

RULING:

YES. 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.

Universal Mills Corporation vs. Universal Textile Mills

FACTS:

This is an appeal from the order of the Securities and Exchange Commission granting a petition by the
respondent to have the petitioner’s corporate name be changed as it is “confusingly and deceptively
similar” to that of the former.

On January 8, 1954, respondent Universal Textile Mills was issued a certificate of Corporation as a textile
manufacturing firm. On the other hand, petitioner, which deals in the production of hosieries and
apparels, acquired its current name by amending its articles of incorporation, changing its name from
Universal Hosiery mills Corporation to Universal Mills corporation.

ISSUE:

Whether or not petioner’s trade name is confusingly similar with that of respondent’s.

HELD:

Yes. The corporate names in question are not identical, but they are indisputably so similar that even
under the test of reasonable care and observation as the public generally are capable of using and may
be expected to exercise” invoked by appellant. We are apprehensive confusion will usually arise,
considering that x x x appellant included among its primary purposes the manufacturing, dyeing,
finishing and selling of fabrics of all kinds” which respondent had been engaged for more than a decade
ahead of petitioner.
UY SIULIONG, MARIANO LIMJAP, GACU UNG JIENG, EDILBERTO CALIXTO and UY CHO YEE vs. THE
DIRECTOR OF COMMERCE AND INDUSTRY

FACTS:

Petitioners had been associated together as partners, which partnership was known as "mercantil
regular colectiva, under the style and firm name of "Siuliong y Cia. ́ They desired to dissolve said
partnership and to form a corporation composed of the same persons as incorporators, to be known as
"Siulong y Compañia, Incorporada.” Puepose: (a) to acquire the business of the partnership theretofore
known as Siuliong & Co., and (b) to continue said business with some of its objects or purposes.
However, it was found upon an examination of the purposes enumerated in the proposed articles of
incorporation of "Siuliong y Cia., Inc.," that some of the purposes of the original partnership of "Siuliong
y Cia." have been omitted.

Respondent argued; (a) that the proposed articles of incorporation presented for file and registry
permitted the petitioners to engage in a business which had for its end more than one purpose; (b) that
it permitted the petitioners to engage in the banking business, and (c) to deal in real estate, in violation
of the Act of Congress of July 1, 1902.

ISSUE:

Whether a corporation organized for commercial purposes in the Philippine Islands can be organized for
more than one purpose.

HELD:

Yes. After careful scrutiny, it was found that it contains nothing which violates in the slightest degree any
of the provisions of the laws of the Philippine Islands, and the petitioners are, therefore, entitled to have
such articles of incorporation filed and registered as prayed for by them and to have issued to them a
certificate under the seal of the office of the respondent, setting forth that such articles of incorporation
have been duly filed in his office. The court was fully persuaded that all the power and authority
included in the articles of incorporation of "Siuliong y Cia., Inc.," are only incidental to the principal
purpose of said proposed incorporation, to wit: “mercantile business.” The purchase and sale,
importation and exportation of the products of the country, as well as of foreign countries, might make
it necessary to purchase and discount promissory notes, bills of exchange, bonds, negotiable
instruments, stock, and interest in other mercantile and industrial associations. It might also become
important and advisable for the successful operation of the corporation to act as agent for insurance
companies as well as to buy, sell and equip boats and to buy and sell other establishments, and
industrial and mercantile businesses
CLAVECILLA RADIO SYSTEM VS. ANTILLON

FACTS:

The New Cagayan Grocery filed a complaint against CRS for some irregularities in the transmission of a
message which changed the context and purport causing damages. The complaint was filed in the City
Court of Cagayan de Oro.

ISSUE:

Whether the action will prosper?

HELD:

No. The action was based on tort and not upon a written contract and as such, under the Rules of Court,
it should be filed in the municipality where the defendant or any of the defendants resides or may be
served with summons.

Settled is the principle in corporation law that the residence of a corporation is the place where the
principal office is established. Since it is not disputed that CRS has its principal office in Manila, it follows
that the suit against it may properly be filed in the City of Manila.

The fact that CRS maintains branch office in some parts of the country does not mean that it can be sued
in any of these places. To allow such would create confusion and work untold inconveniences to the
corporation.