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Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 119002 October 19, 2000

INTERNATIONAL EXPRESS TRAVEL & TOUR SERVICES, INC., petitioner,

vs.HON. COURT O APPEALS, HENRI !AHN, PHILIPPINE OOT"ALL E#ERATION, respondents.

D ! I S I O N

!APUNAN, J.:

On "une #$ %&'&, petitioner International (press Travel and Tour Services, Inc., throu)h its *ana)in) director,+rote a letter to the Philippine Football Federation Federation-, throu)h its president private respondent enri

/ahn, +herein the for*er offered its services as a travel a)enc0 to the latter.%The offer +as accepted.

Petitioner secured the airline tic1ets for the trips of the athletes and officials of the Federation to the South ast2sian 3a*es in /uala 4u*pur as +ell as various other trips to the People5s Republic of !hina and 6risbane.The total cost of the tic1ets a*ounted to P77&,897.'#. For the tic1ets received, the Federation *ade t+o partial

pa0*ents, both in Septe*ber of %&'&, in the total a*ount of P%:8,78:.9$.;

On 7 October %&'&, petitioner +rote the Federation, throu)h the private respondent a de*and letter re


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( ( (&

The dispositive portion of the trial court5s decision reads@

>RFOR, =ud)*ent is rendered orderin) defendant enri /ahn to pa0 the plaintiff the principal su* ofP;$:,9;7.;$, plus the interest thereon at the le)al rate co*puted fro* "ul0 9, %&&$, the date the co*plaint +asfiled, until the principal obli)ation is full0 liith the costs a)ainst defendant enri /ahn.%$

Onl0 enri /ahn elevated the above decision to the !ourt of 2ppeals. On ;% Dece*ber %&&7, the respondentcourt rendered a decision reversin) the trial court, the decretal portion of said decision reads@

>RFOR, pre*ises considered, the =ud)*ent appealed fro* is hereb0 RVRSD and ST 2SID and

another one is rendered dis*issin) the co*plaint a)ainst defendant enri S. /ahn.%%

In findin) for enri /ahn, the !ourt of 2ppeals reco)ni?ed the =uridical e(istence of the Federation. It rationali?edthat since petitioner failed to prove that enri /ahn )uaranteed the obli)ation of the Federation, he should not beheld liable for the sa*e as said entit0 has a separate and distinct personalit0 fro* its officers.

Petitioner filed a *otion for reconsideration and as an alternative pra0er pleaded that the Federation be held

liable for the unpaid obli)ation. The sa*e +as denied b0 the appellate court in its resolution of ' Februar0 %&&9,+here it stated that@

2s to the alternative pra0er for the Modification of the Decision b0 e(pressl0 declarin) in the dispositive portionthereof the Philippine Football Federation PFF- as liable for the unpaid obli)ation, it should be re*e*bered thatthe trial court dis*issed the co*plaint a)ainst the Philippine Football Federation, and the plaintiff did not appealfro* this decision. ence, the Philippine Football Federation is not a part0 to this appeal and conseIT T PI4IPPIN FOOT6244 FDR2TION PFF- 2S 2 !ORPOR2T NTIT 2ND IN NOTO4DIN3 T2T PRIV2T RSPONDNT NRI /2N >2S T ON >O RPRSNTD TPFF 2S 2VIN3 2 !ORPOR2T PRSON24IT.

6. T ONOR264 !OCRT OF 2PP24S RRD IN NOT O4DIN3 PRIV2T RSPONDNTNRI /2N PRSON244 4I264 FOR T O64I32TION OF T CNIN!ORPOR2TD PFF,2VIN3 N3OTI2TD >IT PTITIONR 2ND !ONTR2!TD T O64I32TION IN 624F OFT PFF, M2D 2 P2RTI24 P2MNT 2ND 2SSCRD PTITIONR OF FC44 STT4IN3 TO64I32TION.

!. 2SSCMIN3 2R3CNDO T2T PRIV2T RSPONDNT /2N IS NOT PRSON244 4I264,T ONOR264 !OCRT OF 2PP24S RRD IN NOT EPRSS4 D!42RIN3 IN ITSD!ISION T2T T PFF IS SO44 4I264 FOR T O64I32TION.

The resolution of the case at bar hin)es on the deter*ination of the e(istence of the Philippine FootballFederation as a =uridical person. In the assailed decision, the appellate court reco)ni?ed the e(istence of theFederation. In support of this, the !2 cited Republic 2ct #%#9, other+ise 1no+n as the Revised !harter of thePhilippine 2*ateur 2thletic Federation, and Presidential Decree No. 8$7 as the la+s fro* +hich said Federationderives its e(istence.

2s correctl0 observed b0 the appellate court, both R.2. #%#9 and P.D. No. 8$7 reco)ni?ed the =uridical e(istenceof national sports associations. This *a0 be )leaned fro* the po+ers and functions )ranted to theseassociations. Section %7 of R.2. #%#9 provides@

S!. %7. Functions, po+ers and duties of 2ssociations. The National Sports5 2ssociation shall have thefollo+in) functions, po+ers and duties@
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%. To adopt a constitution and b0la+s for their internal or)ani?ation and )overn*entB

;. To raise funds b0 donations, benefits, and other *eans for their purposes.

#. To purchase, sell, lease or other+ise encu*ber propert0 both real and personal, for theacco*plish*ent of their purposeB

7. To affiliate +ith international or re)ional sports5 2ssociations after due consultation +ith the e(ecutiveco**itteeB

( ( (

%#. To perfor* such other acts as *a0 be necessar0 for the proper acco*plish*ent of their purposesand not inconsistent +ith this 2ct.

Section ' of P.D. 8$7, )rants si*ilar functions to these sports associations@

S!. '. Functions, Po+ers, and Duties of National Sports 2ssociation. The National sports associations shallhave the follo+in) functions, po+ers, and duties@

%. 2dopt a !onstitution and 604a+s for their internal or)ani?ation and )overn*ent +hich shall besub*itted to the Depart*ent and an0 a*end*ent thereto shall ta1e effect upon approval b0 theDepart*ent@ Provided, ho+ever, That no tea*, school, club, or)ani?ation, or entit0 shall be ad*itted asa votin) *e*ber of an association unless 8$ per cent of the athletes co*posin) said tea*, school, club,or)ani?ation, or entit0 are Filipino citi?ensB

;. Raise funds b0 donations, benefits, and other *eans for their purpose sub=ect to the approval of theDepart*entB

#. Purchase, sell, lease, or other+ise encu*ber propert0, both real and personal, for the acco*plish*entof their purposeB

7. !onduct local, interport, and international co*petitions, other than the Ol0*pic and 2sian 3a*es, forthe pro*otion of their sportB

9. 2ffiliate +ith international or re)ional sports associations after due consultation +ith the Depart*entB

( ( (

%#. Perfor* such other functions as *a0 be provided b0 la+.

The above po+ers and functions )ranted to national sports associations clearl0 indicate that these entities *a0ac


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of the present e(ecutive co**ittee of the Philippine 2*ateur 2thletic Federation. The said e(ecutive co**itteeshall be dissolved upon the or)ani?ation of the e(ecutive co**ittee herein provided@ Provided, further, That thefunctionin) e(ecutive co**ittee is char)ed +ith the responsibilit0 of seein) to it that the National Sports5

2ssociations are for*ed and or)ani?ed +ithin si( *onths fro* and after the passa)e of this 2ct.

Section : of P.D. 8$7, si*ilarl0 provides@

S!. :. National Sports 2ssociations. 2pplication for accreditation or reco)nition as a national sportsassociation for each individual sport in the Philippines shall be filed +ith the Depart*ent to)ether +ith, a*on)

others, a cop0 of the !onstitution and 604a+s and a list of the *e*bers of the proposed association.

The Depart*ent shall )ive the reco)nition applied for if it is satisfied that the national sports association to beor)ani?ed +ill pro*ote the ob=ectives of this Decree and has substantiall0 co*plied +ith the rules andre)ulations of the Depart*ent@ Provided, That the Depart*ent *a0 +ithdra+ accreditation or reco)nition forviolation of this Decree and such rules and re)ulations for*ulated b0 it.

The Depart*ent shall supervise the national sports association@ Provided, That the latter shall have e(clusivetechnical control over the develop*ent and pro*otion of the particular sport for +hich the0 are or)ani?ed.

!learl0 the above cited provisions ree cannot subscribe to the position ta1en b0 the appellate court that even assu*in) that theFederation +as defectivel0 incorporated, the petitioner cannot den0 the corporate e(istence of the Federation

because it had contracted and dealt +ith the Federation in such a *anner as to reco)ni?e and in effect ad*it itse(istence.%9 The doctrine of corporation b0 estoppel is *ista1enl0 applied b0 the respondent court to thepetitioner. The application of the doctrine applies to a third part0 onl0 +hen he tries to escape liabilit0 on a

contract fro* +hich he has benefited on the irrelevant )round of defective incorporation. %8In the case at bar,the petitioner is not tr0in) to escape liabilit0 fro* the contract but rather is the one clai*in) fro* the contract.

>RFOR, the decision appealed fro* is RVRSD and ST 2SID. The decision of the Re)ional Trial!ourt of Manila, 6ranch #9, in !ivil !ase No. &$9#9&9 is hereb0 RINST2TD.

SO ORDRD.

Davide, "r., !."., !hair*an-, Puno, Pardo, and naresSantia)o, ""., concur.

E(((((((((((((((((((((((((((((((((((


Manila

TIRD DIVISION

G.R. No. 1$%' No(e)ber $, 1999

LIM TONG LIM, petitioner,vs.
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PHILIPPINE ISHING GEAR IN#USTRIES, INC., respondent.

PANGANI"AN, J.:

2 partnership *a0 be dee*ed to e(ist a*on) parties +ho a)ree to borro+ *one0 to pursue a business and todivide the profits or losses that *a0 arise therefro*, even if it is sho+n that the0 have not contributed an0 capitalof their o+n to a Aco**on fund.A Their contribution *a0 be in the for* of credit or industr0, not necessaril0 cash

or fi(ed assets. 6ein) partner, the0 are all liable for debts incurred b0 or on behalf of the partnership. The liabilit0for a contract entered into on behalf of an unincorporated association or ostensible corporation *a0 lie in aperson +ho *a0 not have directl0 transacted on its behalf, but reaped benefits fro* that contract.

The Case

In the Petition for Revie+ on Certioraribefore us, 4i* Ton) 4i* assails the Nove*ber ;8, %&&' Decision of the!ourt of 2ppeals in !23R !V

7%7::, 1+hich disposed as follo+s@

>RFOR, Gthere bein)H no reversible error in the appealed decision, the sa*e is hereb0

affir*ed. 2

The decretal portion of the ue?on !it0 Re)ional Trial !ourt RT!- rulin), +hich +as affir*ed b0 the !2, readsas follo+s@

>RFOR, the !ourt rules@

%. That plaintiff is entitled to the +rit of preli*inar0 attach*ent issued b0 this !ourt on Septe*ber;$, %&&$B

;. That defendants are =ointl0 liable to plaintiff for the follo+in) a*ounts, sub=ect to the*odifications as hereinafter *ade b0 reason of the special and uni


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replaced the attached propert0 as a )uarant0 for an0 =ud)*ent that plaintiff *a0 be ableto secure in this case +ith the o+nership and possession of the nets and floats a+ardedand delivered b0 the sheriff to plaintiff as the hi)hest bidder in the public auction sale. Ithas also been noted that o+nership of the nets G+asH retained b0 the plaintiff until fullpa0*ent G+asH *ade as stipulated in the invoicesB hence, in effect, the plaintiff attachedits o+n properties. It G+asH for this reason also that this !ourt earlier ordered theattach*ent bond filed b0 plaintiff to )uarant0 da*a)es to defendants to be cancelledand for the P&$$,$$$.$$ cash bidded and paid for b0 plaintiff to serve as its bond in favor

of defendants.

Fro* the fore)oin), it +ould appear therefore that +hatever =ud)*ent the plaintiff *a0be entitled to in this case +ill have to be satisfied fro* the a*ount of P&$$,$$$.$$ asthis a*ount replaced the attached nets and floats. !onsiderin), ho+ever, that the total

=ud)*ent obli)ation as co*puted above +ould a*ount to onl0 P'7$,;%8.&;, it +ould beinerit of 2ttach*ent and that !hua, ao and 4i*, as )eneral partners, +ere =ointl0 liable to pa0

respondent. '

The trial court ruled that a partnership a*on) 4i*, !hua and ao e(isted based %- on the testi*onies of the

+itnesses presented and ;- on a !o*pro*ise 2)ree*ent e(ecuted b0 the three 9in !ivil !ase No. %7&;MN+hich !hua and ao had brou)ht a)ainst 4i* in the RT! of Malabon, 6ranch :;, for a- a declaration of nullit0 ofco**ercial docu*entsB b- a refor*ation of contractsB c- a declaration of o+nership of fishin) boatsB d- an

in=unction and e- da*a)es. 10The !o*pro*ise 2)ree*ent provided@

a- That the parties plaintiffs L 4i* Ton) 4i* a)ree to have the four 7- vesselssold in the a*ount of P9,:9$,$$$.$$ includin) the fishin) net. This


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P9,:9$,$$$.$$ shall be applied as full pa0*ent for P#,;9$,$$$.$$ in favor of "4oldin)s !orporation andKor 4i* Ton) 4i*B

b- If the four 7- vesselGsH and the fishin) net +ill be sold at a hi)her price thanP9,:9$,$$$.$$ +hatever +ill be the e(cess +ill be divided into #@ %K# 4i* Ton)4i*B %K# 2ntonio !huaB %K# Peter aoB

c- If the proceeds of the sale the vessels +ill be less than P9,:9$,$$$.$$+hatever the deficienc0 shall be shouldered and paid to "4 oldin) !orporation

b0 %K# 4i* Ton) 4i*B %K# 2ntonio !huaB %K# Peter ao. 11

The trial court noted that the !o*pro*ise 2)ree*ent +as silent as to the nature of their obli)ations, but that =oint

liabilit0 could be presu*ed fro* the e2S ON4 !C2 >O RPRSNTD T2T >2S 2!TIN3 FOR O!2NCST FISIN3 !ORPOR2TION >N 6OC3T T NTS FROM PI4IPPINFISIN3, T !OCRT OF 2PP24S >2S CN"CSTIFID IN IMPCTIN3 4I26I4IT TOPTITIONR 4IM 2S >44.

III T TRI24 !OCRT IMPROPR4 ORDRD T SICR 2ND 2TT2!MNT OFPTITIONR 4IM5S 3OODS.

In deter*inin) +hether petitioner *a0 be held liable for the fishin) nets and floats fro* respondent, the !ourt*ust resolve this 1e0 issue@ +hether b0 their acts, 4i*, !hua and ao could be dee*ed to have entered into apartnership.

This Court's Ruling

The Petition is devoid of *erit.

First and Second Issues@

Existence of a Partnership

and Petitioner's Liabilit

In ar)uin) that he should not be held liable for the e


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leased to the t+o the *ain asset of the purported partnership the fishin) boat F!" Lourdes. The lease +as forsi( *onths, +ith a *onthl0 rental of P#:,9$$ plus ;9 percent of the )ross catch of the boat.

>e are not persuaded b0 the ar)u*ents of petitioner. The facts as found b0 the t+o lo+er courts clearl0 sho+edthat there e(isted a partnership a*on) !hua, ao and hi*, pursuant to 2rticle %:8: of the !ivil !ode +hichprovides@

2rt. %:8: 60 the contract of partnership, t+o or *ore persons bind the*selves to contribute*one0, propert0, or industr0 to a co**on fund, +ith the intention of dividin) the profits a*on)

the*selves.

Specificall0, both lo+er courts ruled that a partnership a*on) the three e(isted based on the follo+in) factual

findin)s@ 1*

%- That Petitioner 4i* Ton) 4i* re


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Thus, the fore)oin) factual findin)s of the RT! and the !2 are bindin) on this !ourt, absent an0 co)ent proof

that the present action is e*braced b0 one of the e(ceptions to the rule. 1%In assailin) the factual findin)s of thet+o lo+er courts, petitioner effectivel0 )oes be0ond the bounds of a petition for revie+ under Rule 79.

Compromise Agreement

#ot the Sole "asis of Partnership

Petitioner ar)ues that the appellate court5s sole basis for assu*in) the e(istence of a partnership +as the

!o*pro*ise 2)ree*ent. e also clai*s that the settle*ent +as entered into onl0 to end the dispute a*on)the*, but not to ad=udicate their pree(istin) ri)hts and obli)ations. is ar)u*ents are baseless. The 2)ree*ent+as but an e*bodi*ent of the relationship e(tant a*on) the parties prior to its e(ecution.

2 proper ad=udication of clai*ants5 ri)hts *andates that courts *ust revie+ and thorou)hl0 appraise all relevantfacts. 6oth lo+er courts have done so and have found, correctl0, a pree(istin) partnership a*on) the parties. Ini*pl0in) that the lo+er courts have decided on the basis of one piece of docu*ent alone, petitioner fails toappreciate that the !2 and the RT! delved into the histor0 of the docu*ent and e(plored all the possibleconsee are not convinced b0 petitioner5s ar)u*ent that he +as *erel0 the lessor of the boats to !hua and ao, not apartner in the fishin) venture. is ar)u*ent alle)edl0 finds support in the !ontract of 4ease and the re)istrationpapers sho+in) that he +as the o+ner of the boats, includin) F!" Lourdes+here the nets +ere found.

is alle)ation defies lo)ic. In effect, he +ould li1e this !ourt to believe that he consented to the sale of his o+nboats to pa0 a debt of Chua and %ao, +ith the e(cess of the proceeds to be divided a*on) the three of the*. Nolessor +ould do +hat petitioner did. Indeed, his consent to the sale proved that there +as a pree(istin)partnership a*on) all three.

Veril0, as found b0 the lo+er courts, petitioner entered into a business a)ree*ent +ith !hua and ao, in +hichdebts +ere underta1en in order to finance the ace stress that it is unreasonable indeed, it is absurd for petitioner to sell his propert0 to pa0 a debt he didnot incur, if the relationship a*on) the three of the* +as *erel0 that of lessorlessee, instead of partners.

Corporation b Estoppel

Petitioner ar)ues that under the doctrine of corporation b0 estoppel, liabilit0 can be i*puted onl0 to !hua andao, and not to hi*. 2)ain, +e disa)ree.

Sec. ;% of the !orporation !ode of the Philippines provides@

Sec. ;%. Corporation b estoppel. 2ll persons +ho assu*e to act as a corporation 1no+in) itto be +ithout authorit0 to do so shall be liable as )eneral partners for all debts, liabilities and

da*a)es incurred or arisin) as a result thereof@ Pro(ided ho)e(er That +hen an0 suchostensible corporation is sued on an0 transaction entered b0 it as a corporation or on an0 tortco**itted b0 it as such, it shall not be allo+ed to use as a defense its lac1 of corporatepersonalit0.

One +ho assu*es an obli)ation to an ostensible corporation as such, cannot resist perfor*ancethereof on the )round that there +as in fact no corporation.

Thus, even if the ostensible corporate entit0 is proven to be le)all0 none(istent, a part0 *a0 be estopped fro*den0in) its corporate e(istence. AThe reason behind this doctrine is obvious an unincorporated associationhas no personalit0 and +ould be inco*petent to act and appropriate for itself the po+er and attributes of acorporation as provided b0 la+B it cannot create a)ents or confer authorit0 on another to act in its behalfB thus,


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those +ho act or purport to act as its representatives or a)ents do so +ithout authorit0 and at their o+n ris1. 2ndas it is an ele*entar0 principle of la+ that a person +ho acts as an a)ent +ithout authorit0 or +ithout a principalis hi*self re)arded as the principal, possessed of all the ri)ht and sub=ect to all the liabilities of a principal, aperson actin) or purportin) to act on behalf of a corporation +hich has no valid e(istence assu*es suchprivile)es and obli)ations and beco*es personall0 liable for contracts entered into or for other acts perfor*ed as

such a)ent. 1+

The doctrine of corporation b0 estoppel *a0 appl0 to the alle)ed corporation and to a third part0. In the first

instance, an unincorporated association, +hich represented itself to be a corporation, +ill be estopped fro*den0in) its corporate capacit0 in a suit a)ainst it b0 a third person +ho relied in )ood faith on suchrepresentation. It cannot alle)e lac1 of personalit0 to be sued to evade its responsibilit0 for a contract it enteredinto and b0 virtue of +hich it received advanta)es and benefits.

On the other hand, a third part0 +ho, 1no+in) an association to be unincorporated, nonetheless treated it as acorporation and received benefits fro* it, *a0 be barred fro* den0in) its corporate e(istence in a suit brou)hta)ainst the alle)ed corporation. In such case, all those +ho benefited fro* the transaction *ade b0 theostensible corporation, despite 1no+led)e of its le)al defects, *a0 be held liable for contracts the0 i*pliedl0assented to or too1 advanta)e of.

There is no dispute that the respondent, Philippine Fishin) 3ear Industries, is entitled to be paid for the nets it

sold. The onl0


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SO ORDRD.

$elo Purisima and +on,aga-Rees ../ concur/

*itug ./ pls/ see concurring opinion/

Se-r-te O/o/

VITUG, J., concurrin) opinionB

I share the vie+s e(pressed in the ponencia of an estee*ed collea)ue, Mr. "ustice 2rte*io V. Pan)aniban,particularl0 the findin) that 2ntonio !hua, Peter ao and petitioner 4i* Ton) 4i* have incurred the liabilities of)eneral partners. I *erel0 +ould +ish to elucidate a bit, albeit briefl0, the liabilit0 of partners in a )eneralpartnership.

>hen a person b0 his act or deed represents hi*self as a partner in an e(istin) partnership or +ith one or *orepersons not actual partners, he is dee*ed an a)ent of such persons consentin) to such representation and in

the sa*e *anner, if he +ere a partner, +ith respect to persons +ho rel0 upon the representation. 1 Theassociation for*ed b0 !hua, ao and 4i*, should be, as it has been dee*ed, a de factopartnership +ith all theconse


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Drivers 2ssociation, Inc. CM2"OD2-B petitioner and private respondent also a)reed to elect one set of officers+ho shall be )iven the sole authorit0 to collect the dail0 dues fro* the *e*bers of the consolidated associationBelections +ere held on October ;&, %&&9 and both petitioner and private respondent ran for presidentB petitioner+onB private respondent protested and, alle)in) fraud, refused to reco)ni?e the results of the electionB privaterespondent also refused to abide b0 their a)ree*ent and continued collectin) the dues fro* the *e*bers of hisassociation despite several de*ands to desist. Petitioner +as thus constrained to file the co*plaint to restrainprivate respondent fro* collectin) the dues and to order hi* to pa0 da*a)es in the a*ount of P;9,$$$.$$ and

attorne05s fees of P9$$.$$. 1

Private respondent *oved to dis*iss the co*plaint for lac1 of =urisdiction, clai*in) that =urisdiction +as lod)ed

+ith the Securities and (chan)e !o**ission S!-. The M!T! denied the *otion on Februar0 &, %&&8. 2 It

denied reconsideration on March ', %&&8. $

Private respondent filed a petition for certioraribefore the Re)ional Trial !ourt, 6ranch 9', 2n)eles !it0. Thetrial court found the dispute to be intracorporate, hence, sub=ect to the =urisdiction of the S!, and ordered the

M!T! to dis*iss !ivil !ase No. %;%7 accordin)l0. *It denied reconsideration on Ma0 #%, %&&8. %

ence this petition. Petitioner clai*s that@

T RSPONDNT "CD3 2!TD >IT 3R2V 26CS OF DIS!RTION 2MOCNTIN3 TO42!/ OR E!SS OF "CRISDI!TION 2ND SRIOCS RROR OF 42> IN !ON!4CDIN3T2T T S!CRITIS 2ND E!2N3 !OMMISSION 2S "CRISDI!TION OVR 2 !2SOF D2M23S 6T>N 2DSKPRSIDNTS OF T>O ;- 2SSO!I2TIONS >OINTNDD TO !ONSO4ID2TKMR3 TIR 2SSO!I2TIONS 6CT NOT T GSICH

2PPROVD 2ND R3ISTRD >IT T S!CRITIS 2ND E!2N3 !OMMISSION.+

The =urisdiction of the Securities and (chan)e !o**ission S!- is set forth in Section 9 of PresidentialDecree No. &$;2. Section 9 reads as follo+s@

Sec. 9. . . . GTHhe Securities and (chan)e !o**ission GhasH ori)inal and e(clusive =urisdictionto hear and decide cases involvin)@

a- Devices or sche*es e*plo0ed b0 or an0 acts of the board of directors, business associates,its officers or partners, a*ountin) to fraud and *isrepresentation +hich *a0 be detri*ental tothe interest of the public andKor of the stoc1holders, partners, *e*bers of associations oror)ani?ations re)istered +ith the !o**ission.

b- !ontroversies arisin) out of intracorporate or partnership relations, bet+een and a*on)stoc1holders, *e*bers or associatesB bet+een an0 or all of the* and the corporation,partnership or association of +hich the0 are stoc1holders, *e*bers, or associates, respectivel0Band bet+een such corporation, partnership or association and the state insofar as it concernstheir individual franchise or ri)ht to e(ist as such entit0.

c- !ontroversies in the election or appoint*ent of directors, trustees, officers or *ana)ers ofsuch corporations, partnerships or associations.

d- Petitions of corporations, partnerships or associations to be declared in the state ofsuspension of pa0*ents in cases +here the corporation, partnership or association possessessufficient propert0 to cover all its debts but foresees the i*possibilit0 of *eetin) the* +hen the0respectivel0 fall due or in cases +here the corporation, partnership or association has nosufficient assets to over its liabilities, but is under the *ana)e*ent of a Rehabilitation Receiver

or Mana)e*ent !o**ittee created pursuant to this Decree.

The )rant of =urisdiction to the S! *ust be vie+ed in the li)ht of its nature and function under the la+. '

This =urisdiction is deter*ined b0 a concurrence of t+o ele*ents@ %- the status or relationship of the

partiesB and ;- the nature of the


13/26

corporation, partnership or association or deal +ith the internal affairs of the corporation, partnership or

association. 112fter all, the principal function of the S! is the supervision and control of corporations,partnership and associations +ith the end in vie+ that invest*ents in these entities *a0 be encoura)ed andprotected, and their entities *a0 be encoura)ed and protected, and their activities pursued for the pro*otion of

econo*ic develop*ent. 12

There is no intracorporate nor partnership relation bet+een petitioner and private respondent. The controvers0bet+een the* arose out of their plan to consolidate their respective =eepne0 drivers5 and operators5 associations

into a sin)le co**on association. This unified association +as, ho+ever, still a proposal. It had not beenapproved b0 the S!, neither had its officers and *e*bers sub*itted their articles of consolidation isaccordance +ith Sections :' and :& of the !orporation !ode. !onsolidation beco*es effective not upon *ere

a)ree*ent of the *e*bers but onl0 upon issuance of the certificate of consolidation b0 the S!. 1$>hen theS!, upon processin) and e(a*inin) the articles of consolidation, is satisfied that the consolidation of thecorporations is not inconsistent +ith the provisions of the !orporation !ode and e(istin) la+s, it issues a

certificate of consolidation +hich *a1es the reor)ani?ation official. 1The ne+ consolidated corporation co*es

into e(istence and the constituent corporations dissolve and cease to e(ist. 1*

The /2M2"D2 and S2M2"OD2 to +hich petitioner and private respondent belon) are dul0 re)istered +ith theS!, but these associations are t+o separate entities. The dispute bet+een petitioner and private respondent isnot +ithin the /2M2"D2 nor the S2M2"OD2. It is bet+een *e*bers of separate and distinct associations.Petitioner and private respondent have no intracorporate relation *uch less do the0 have an intracorporatedispute. The S! therefore has no =urisdiction over the co*plaint.

The doctrine of corporation b0 estoppel 1% advanced b0 private respondent cannot override =urisdictional

re


14/26

2ntonio M. Nu0les and Purun)an, !hato, !hato, Tarriela L Tan 4a+ Offices for respondents.

Froilan Siobal for >estern Pan)asinan 40ceu*.

S4426CS

%. !ORPOR2TION 42>B !ORPOR2T N2MSB R3ISTR2TION OF PROPOSD N2M >I! ISIDNTI!24 OR !ONFCSIN34 SIMI42R TO T2T OF 2N EISTIN3 !ORPOR2TION, PROI6ITDB!ONFCSION 2ND D!PTION FF!TIV4 PR!4CDD 6 T 2PPNDIN3 OF 3O3R2PI!

N2MS TO T >ORD A4!CMA. The 2rticles of Incorporation of a corporation *ust, a*on) other thin)s,set out the na*e of the corporation. Section %' of the !orporation !ode establishes a restrictive rule insofar ascorporate na*es are concerned@ ASection %'. !orporate na*e. No corporate na*e *a0 be allo+ed b0 theSecurities an (chan)e !o**ission if the proposed na*e is identical or deceptivel0 or confusin)l0 si*ilar tothat of an0 e(istin) corporation or to an0 other na*e alread0 protected b0 la+ or is patentl0 deceptive, confusin)or contrar0 to e(istin) la+s. >hen a chan)e in the corporate na*e is approved, the !o**ission shall issue ana*ended certificate of incorporation under the a*ended na*e.A The polic0 underl0in) the prohibition in Section%' a)ainst the re)istration of a corporate na*e +hich is Aidentical or deceptivel0 or confusin)l0 si*ilarA to that ofan0 e(istin) corporation or +hich is Apatentl0 deceptiveA or Apatentl0 confusin)A or Acontrar0 to e(istin) la+s,A isthe avoidance of fraud upon the public +hich +ould have occasion to deal +ith the entit0 concerned, the evasionof le)al obli)ations and duties, and the reduction of difficulties of ad*inistration and supervision overcorporations. >e do not consider that the corporate na*es of private respondent institutions are Aidentical +ith,or deceptivel0 or confusin)l0 si*ilarA to that of the petitioner institution. True enou)h, the corporate na*es ofprivate respondent entities all carr0 the +ord A40ceu*A but confusion and deception are effectivel0 precluded b0the appendin) of )eo)raphic na*es to the +ord A40ceu*.A Thus, +e do not believe that the A40ceu* of 2parriAcan be *ista1en b0 the )eneral public for the 40ceu* of the Philippines, or that the A40ceu* of !a*alaniu)anA+ould be confused +ith the 40ceu* of the Philippines.

;. ID.B ID.B DO!TRIN OF S!OND2R M2NIN3B CS OF >ORD A4!CM,A NOT 2TTNDD >ITE!4CSIVIT. It is clai*ed, ho+ever, b0 petitioner that the +ord A40ceu*A has ac


15/26

Pan)asinan 40ceu* and a little later +ith other private respondent institutions +hich re)istered +ith the S!usin) A40ceu*A as part of their corporation na*es. There *a0 +ell be other schools usin) 40ceu* or 4iceo intheir na*es, but not re)istered +ith the S! because the0 have not adopted the corporate for* of or)ani?ation.

#. ID.B ID.B MCST 6 V24C2TD IN TIR NTIRT TO DTRMIN >TR T 2R!ONFCSIN34 OR D!PTIV4 SIMI42R TO 2NOTR !ORPOR2T NTIT5S N2M. petitionerinstitution is not entitled to a le)all0 enforceable e(clusive ri)ht to use the +ord A40ceu*A in its corporate na*eand that other institutions *a0 use A40ceu*A as part of their corporate na*es. To deter*ine +hether a )iven

corporate na*e is AidenticalA or Aconfusin)l0 or deceptivel0 si*ilarA +ith another entit05s corporate na*e, it is notenou)h to ascertain the presence of A40ceu*A or A4iceoA in both na*es. One *ust evaluate corporate na*es intheir entiret0 and +hen the na*e of petitioner is =u(taposed +ith the na*es of private respondents, the0 are notreasonabl0 re)arded as AidenticalA or Aconfusin)l0 or deceptivel0 si*ilarA +ith each other.

D ! I S I O N

F4I!I2NO, " p@

Petitioner is an educational institution dul0 re)istered +ith the Securities and (chan)e !o**ission AS!A-.>hen it first re)istered +ith the S! on ;% Septe*ber %&9$, it used the corporate na*e 40ceu* of thePhilippines, Inc. and has used that na*e ever since.

On ;7 Februar0 %&'7, petitioner instituted proceedin)s before the S! to co*pel the private respondents, +hichare also educational institutions, to delete the +ord A40ceu*A fro* their corporate na*es and per*anentl0 toen=oin the* fro* usin) A40ceu*A as part of their respective na*es.

So*e of the private respondents activel0 participated in the proceedin)s before the S!. These are thefollo+in), the dates of their ori)inal S! re)istration bein) set out belo+ opposite their respective na*es@

>estern Pan)asinan 40ceu* ;: October %&9$

40ceu* of !aba)an #% October %&8;

40ceu* of 4allo, Inc. ;8 March %&:;

40ceu* of 2parri ;' March %&:;

40ceu* of Tuao, Inc. ;' March %&:;

40ceu* of !a*alaniu)an ;' March %&:;

The follo+in) private respondents +ere declared in default for failure to file an ans+er despite service ofsu**ons@

6uhi 40ceu*B

!entral 40ceu* of !atanduanesB

40ceu* of astern Mindanao, Inc.B and

40ceu* of Southern Philippines

Petitioner5s ori)inal co*plaint before the S! had included three #- other entities@

%. The 40ceu* of Malacana0B

;. The 40ceu* of MarbelB and

#. The 40ceu* of 2raullo

The co*plaint +as later +ithdra+n insofar as concerned the 40ceu* of Malacana0 and the 40ceu* of Marbel,for failure to serve su**ons upon these t+o ;- entities. The case a)ainst the 4iceu* of 2raullo +as dis*issed+hen that school *otu proprio chan)e its corporate na*e to APa*antasan n) 2raullo.A

The bac1)round of the case at bar needs so*e recountin). Petitioner had so*eti*e before co**enced in theS! a proceedin) S!!ase No. %;7%- a)ainst the 40ceu* of 6a)uio, Inc. to re


16/26

point of ti*e, % and ordered the latter to chan)e its na*e to another na*e Anot si*ilar or identical G+ithHA thena*es of previousl0 re)istered entities.

The 40ceu* of 6a)uio, Inc. assailed the Order of the S! before the Supre*e !ourt in a case doc1eted as 3.R.No. 4789&9. In a Minute Resolution dated %7 Septe*ber %&::, the !ourt denied the Petition for Revie+ for lac1of *erit. ntr0 of =ud)*ent in that case +as *ade on ;% October %&::. ;

2r*ed +ith the Resolution of this !ourt in 3.R. No. 4789&9, petitioner then +rote all the educational institutionsit could find usin) the +ord A40ceu*A as part of their corporate na*e, and advised the* to discontinue such use

of A40ceu*.A >hen, +ith the passa)e of ti*e, it beca*e clear that this recourse had failed, petitioner institutedbefore the S! S!!ase No. ;9:& to enforce +hat petitioner clai*s as its proprietar0 ri)ht to the +ordA40ceu*.A The S! hearin) officer rendered a decision sustainin) petitioner5s clai* to an e(clusive ri)ht to usethe +ord A40ceu*.A The hearin) officer relied upon the S! rulin) in the 40ceu* of 6a)uio, Inc. case S!!ase No. %;7%- and held that the +ord A40ceu*A +as capable of appropriation and that petitioner had ace do not consider that the corporate na*es of private respondent institutions are Aidentical +ith, or deceptivel0


17/26

or confusin)l0 si*ilarA to that of the petitioner institution. True enou)h, the corporate na*es of privaterespondent entities all carr0 the +ord A40ceu*A but confusion and deception are effectivel0 precluded b0 theappendin) of )eo)raphic na*es to the +ord A40ceu*.A Thus, +e do not believe that the A40ceu* of 2parriA canbe *ista1en b0 the )eneral public for the 40ceu* of the Philippines, or that the A40ceu* of !a*alaniu)anA+ould be confused +ith the 40ceu* of the Philippines.

t0*olo)icall0, the +ord A40ceu*A is the 4atin +ord for the 3ree1 l01eion +hich in turn referred to a localit0 onthe river Ilissius in ancient 2thens Aco*prisin) an enclosure dedicated to 2pollo and adorned +ith fountains and

buildin)s erected b0 Pisistratus, Pericles and 40cur)us freith the fore)oin) as a 0ardstic1, G+eH believe the appellant failed to satisf0 the afore*entioned re


18/26

institutions of the Ro*an !atholic !hurch had been usin) the sa*e or si*ilar +ord li1e 54iceo de Manila,5 54iceode 6aleno5 in 6aleno, Masbate-, 54iceo de Masbate,5 54iceo de 2lba05 lon) before appellant started usin) the+ord 540ceu*5. The appellant also failed to prove that the +ord 540ceu*5 has beco*e so identified +ith itseducational institution that confusion +ill surel0 arise in the *inds of the public if the sa*e +ord +ere to be usedb0 other educational institutions.

In other +ords, +hile the appellant *a0 have proved that it had been usin) the +ord 540ceu*5 for a lon) period ofti*e, this fact alone did not a*ount to *ean that the said +ord had acestern Pan)asinan 40ceu*, Inc., used the ter* A40ceu*A seventeen %:- 0ears beforethe petitioner re)istered its o+n corporate na*e +ith the S! and be)an usin) the +ord A40ceu*.A It follo+s thatif an0 institution had acestern Pan)asinan 40ceu*, Inc. rather than the petitioner institution.

In this connection, petitioner ar)ues that because the >estern Pan)asinan 40ceu*, Inc. failed to reconstruct itsrecords before the S! in accordance +ith the provisions of R.2. No. 8;, +hich records had been destro0eddurin) >orld >ar II, >estern Pan)asinan 40ceu* should be dee*ed to have lost all ri)hts it *a0 have acestern Pan)asinan 40ceu*, Inc. re)istered +ith theS! soon after petitioner had filed its o+n re)istration on ;% Septe*ber %&9$. >hether or not >esternPan)asinan 40ceu*, Inc. *ust be dee*ed to have lost its ri)hts under its ori)inal %# re)istration, appears tous to be esternPan)asinan 40ceu* and a little later +ith other private respondent institutions +hich re)istered +ith the S!usin) A40ceu*A as part of their corporation na*es. There *a0 +ell be other schools usin) 40ceu* or 4iceo intheir na*es, but not re)istered +ith the S! because the0 have not adopted the corporate for* of or)ani?ation.

>e conclude and so hold that petitioner institution is not entitled to a le)all0 enforceable e(clusive ri)ht to usethe +ord A40ceu*A in its corporate na*e and that other institutions *a0 use A40ceu*A as part of their corporate

na*es. To deter*ine +hether a )iven corporate na*e is AidenticalA or Aconfusin)l0 or deceptivel0 si*ilarA +ithanother entit05s corporate na*e, it is not enou)h to ascertain the presence of A40ceu*A or A4iceoA in both na*es.One *ust evaluate corporate na*es in their entiret0 and +hen the na*e of petitioner is =u(taposed +ith thena*es of private respondents, the0 are not reasonabl0 re)arded as AidenticalA or Aconfusin)l0 or deceptivel0si*ilarA +ith each other.

>RFOR, the petitioner havin) failed to sho+ an0 reversible error on the part of the public respondent!ourt of 2ppeals, the Petition for Revie+ is DNID for lac1 of *erit, and the Decision of the !ourt of 2ppealsdated ;' "une %&&% is hereb0 2FFIRMD. No pronounce*ent as to costs.

SO ORDRD.

6idin, Davide, "r., Ro*ero and Melo, "" ., concur.

3utierre?, "r., " ., on ter*inal leave.

E((((((((((((((((((((((((((((((((((


Manila

N 62N!

G.R. No. L;2*9' /e 29, 19*0

C. ARNOL# HALL -/5 "RA#LE3 P. HALL,petitioners,vs.


19/26

E#MUN#O S. PICCIO, 56e o< t:e Cort o< rt I/t-/ce o< Le8te, RE# "RO=N, EMMA "RO=N,HIPOLITA CAPUCIONG, / : c--ct8 - rece(er o< t:e -r E-ter/ L)ber -/5 Co))erc-7 Co., I/c., respondents.

Claro $/ Recto for petitioners/Ramon 0io1no and .ose &/ 0io1no for respondents/

"ENG4ON, J.>

This is petition to set aside all the proceedin)s had in civil case No. #'% of the !ourt of First Instance of 4e0teand to en=oin the respondent =ud)e fro* further actin) upon the sa*e.

Facts@ %- on Ma0 ;', %&7:, the petitioners !. 2rnold all and 6radle0 P. all, and the respondents Fred 6ro+n,**a 6ro+n, ipolita D. !hap*an and !eferino S. 2bella, si)ned and ac1no+led)ed in 4e0te, the article ofincorporation of the Far astern 4u*ber and !o**ercial !o., Inc., or)ani?ed to en)a)e in a )eneral lu*berbusiness to carr0 on as )eneral contractors, operators and *ana)ers, etc. 2ttached to the article +as an affidavitof the treasurer statin) that ;#,7;' shares of stoc1 had been subscribed and full0 paid +ith certain propertiestransferred to the corporation described in a list appended thereto.

;- I**ediatel0 after the e(ecution of said articles of incorporation, the corporation proceeded to do business+ith the adoption of b0la+s and the election of its officers.

#- On Dece*ber ;, %&7:, the said articles of incorporation +ere filed in the office of the Securities and(chan)e !o**issioner, for the issuance of the correspondin) certificate of incorporation.

7- On March ;;, %&7', pendin) action on the articles of incorporation b0 the aforesaid )overn*ental office, therespondents Fred 6ro+n, **a 6ro+n, ipolita D. !hap*an and !eferino S. 2bella filed before the !ourt ofFirst Instance of 4e0te the civil case nu*bered #'%, entitled AFred 6ro+n et al. (s. 2rnold !. all et al.A, alle)in)a*on) other thin)s that the Far astern 4u*ber and !o**ercial !o. +as an unre)istered partnershipB that the0+ished to have it dissolved because of bitter dissension a*on) the *e*bers, *is*ana)e*ent and fraud b0 the*ana)ers and heav0 financial losses.

9- The defendants in the suit, na*el0, !. 2rnold all and 6radle0 P. all, filed a *otion to dis*iss, contestin)the court5s =urisdiction and the sufficientl0 of the cause of action.

8- 2fter hearin) the parties, the on. d*und S. Piccio ordered the dissolution of the co*pan0B and at therehereupon, the present specialcivil action +as instituted in this court. It is based upon t+o *ain propositions, to +it@

a- The court had no =urisdiction in civil case No. #'% to decree the dissolution of the co*pan0, because it bein)a de facto corporation, dissolution thereof *a0 onl0 be ordered in a 2uo )arrantoproceedin) instituted inaccordance +ith section %& of the !orporation 4a+.

b- Inas*uch as respondents Fred 6ro+n and **a 6ro+n had si)ned the article of incorporation but onl0 apartnership.

0iscussion@ The second proposition *a0 at once be dis*issed. 2ll the parties are infor*ed that the Securitiesand (chan)e !o**ission has not, so far, issued the correspondin) certificate of incorporation. 2ll of the*1no+, or sou)ht to 1no+, that the personalit0 of a corporation be)ins to e(ist onl0 fro* the *o*ent suchcertificate is issued not before sec. %%, !orporation 4a+-. The co*plainin) associates have not representedto the others that the0 +ere incorporated an0 *ore than the latter had *ade si*ilar representations to the*. 2nd

as nobod0 +as led to believe an0thin) to his pre=udice and da*a)e, the principle of estoppel does not appl0.Obviousl0 this is not an instance re


20/26

There are least t+o reasons +h0 this section does not )overn the situation. Not havin) obtained the certificate ofincorporation, the Far astern 4u*ber and !o**ercial !o. even its stoc1holders *a0 not probabl0 clai*Ain )ood faithA to be a corporation.

Cnder our statue it is to be noted !orporation 4a+, sec. %%- that it is the issuance of a certificate ofincorporation b0 the Director of the 6ureau of !o**erce and Industr0 +hich calls a corporation intobein). The i**unit0 if collateral attac1 is )ranted to corporations Aclai*in) in )ood faith to be acorporation under this act.A Such a clai* is co*patible +ith the e(istence of errors and irre)ularitiesB but

not +ith a total or substantial disre)ard of the la+. Cnless there has been an evident atte*pt to co*pl0+ith the la+ the clai* to be a corporation Aunder this actA could not be *ade Ain )ood faith.A Fisher onthe Philippine 4a+ of Stoc1 !orporations, p. :9. See alsou*phre0s (s. Dre+, 9& Fla., ;&9B 9; So.,#8;.-

Second, this is not a suit in +hich the corporationis a part0. This is a liti)ation bet+een stoc1holders of thealle)ed corporation, for the purpose of obtainin) its dissolution. ven the e(istence of a de 3urecorporation *a0be ter*inated in a private suit for its dissolution bet+een stoc1holders, +ithout the intervention of the state.

There *i)ht be roo* for ar)u*ent on the ri)ht of *inorit0 stoc1holders to sue for dissolutionB %but that h1ch brin)s us to one principal reason +h0 this petition *a0 not prosper, na*el0@ the petitioners have theirre*ed0 b0 appealin) the order of dissolution at the proper ti*e.

There is a secondar0 issue in connection +ith the appoint*ent of a receiver. 6ut it *ust be ad*itted that

receivership is proper in proceedin)s for dissolution of a co*pan0 or corporation, and it +as no error to re=ect thecounterbond, the court havin) declared the dissolution. 2s to the a*ount of the bond to be de*anded of thereceiver, *uch depends upon the discretion of the trial court, +hich in this instance +e do not believe has beenclearl0 abused.

.udgment@ The petition +ill, therefore, be dis*issed, +ith costs. The preli*inar0 in=unction heretofore issued +illbe dissolved.

4,aeta Pablo Tuason $ontemaor and Rees ../ concur.

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ManilaS!OND DIVISION

G.R. No. 1221+ October $, 2002

IN#USTRIAL RERACTORIES CORPORATION O THE PHILIPPINES,petitioner,vs.COURT O APPEALS, SECURITIES AN# EXCHANGE COMMISSION -/5 RERACTORIES CORPORATIONO THE PHILIPPINES,respondents.

AUSTRIA;MARTINE4, J.:

Filed before us is a petition for revie+ on certiorari under Rule 79 of the Rules of !ourt assailin) the Decision ofthe !ourt of 2ppeals in !23.R. SP No. #9$98, den0in) due course and dis*issin) the petition filed b0 IndustrialRefractories !orp. of the Philippines IR!P-.

Respondent Refractories !orporation of the Philippines R!P- is a corporation dul0 or)ani?ed on October %#,%&:8 for the purpose of en)a)in) in the business of *anufacturin), producin), sellin), e(portin) and other+isedealin) in an0 and all refractor0 bric1s, its b0products and derivatives. On "une ;;, %&::, it re)istered itscorporate and business na*e +ith the 6ureau of Do*estic Trade.

Petitioner IR!P on the other hand, +as incorporated on 2u)ust ;#, %&:& ori)inall0 under the na*e AS0nclaireManufacturin) !orporationA. It a*ended its 2rticles of Incorporation on 2u)ust ;#, %&'9 to chan)e its corporatena*e to AIndustrial Refractories !orp. of the PhilippinesA. It is en)a)ed in the business of *anufacturin) all 1indsof cera*ics and other products, e(cept paints and ?incs.

6oth co*panies are the onl0 local suppliers of *onolithic )unnin) *i(.%


21/26

Discoverin) that petitioner +as usin) such corporate na*e, respondent R!P filed on 2pril %7, %&'' +ith theSecurities and (chan)e !o**ission S!- a petition to co*pel petitioner to chan)e its corporate na*e on the)round that its corporate na*e is confusin)l0 si*ilar +ith that of petitioners such that the public *a0 be

confused or deceived into believin) that the0 are one and the sa*e corporation.;

The S! decided in favor of respondent R!P and rendered =ud)*ent on "ul0 ;#, %& +ith the follo+in)dispositive portion@

A>RFOR, =ud)*ent is hereb0 rendered in favor of the petitioner and a)ainst the respondent declarin) thelatters corporate na*e Industrial Refractories !orporation of the Philippines as deceptivel0 and confusin)l0si*ilar to that of petitioners corporate na*e Refractories !orporation of the Philippines. 2ccordin)l0,respondent is hereb0 directed to a*end its 2rticles of Incorporation b0 deletin) the na*e Refractories!orporation of the Philippines in its corporate na*e +ithin thirt0 #$- da0s fro* finalit0 of this Decision. 4i1e+ise,

respondent is hereb0 ordered to pa0 the petitioner the su* of P9$,$$$.$$ as attorne0s fees.A#

Petitioner appealed to the S! n 6anc, ar)uin) that it does not have an0 =urisdiction over the case, and thatrespondent R!P has no ri)ht to the e(clusive use of its corporate na*e as it is co*posed of )eneric or co**on

+ords.7

In its Decision dated "ul0 ;#, %&, the S! n 6anc *odified the appealed decision in that petitioner +as

ordered to delete or drop fro* its corporate na*e onl0 the +ord ARefractoriesA.9

Petitioner IR!P elevated the decision of the S! n 6anc throu)h a petition for revie+ on certiorari to the !ourtof 2ppeals +hich then rendered the herein assailed decision. The appellate court upheld the =urisdiction of theS! over the case and ruled that the corporate na*es of petitioner IR!P and respondent R!P are confusin)l0or deceptivel0 si*ilar, and that respondent R!P has established its prior ri)ht to use the +ord ARefractoriesA as

its corporate na*e.8The appellate court also found that the petition +as filed be0ond the re)le*entar0 period.:

ence, herein petition +hich +e *ust den0.

Petitioner contends that the petition before the !ourt of 2ppeals +as ti*el0 filed. It *ust be noted that at the ti*ethe S! n 6anc rendered its decision on Ma0 %$, %&&7, the )overnin) rule on appeals fro*


22/26

of the facts stated therein.%82nd based on such dates, there is no


23/26

R!P started usin) its na*e. Thus, bein) the prior re)istrant, respondent R!P has achile the +ord ArefractoriesA is a )eneric ter*, its usa)e is not +idespread and is li*ited *erel0 to theindustr0Ktrade in +hich it is used, and its continuous use b0 respondent R!P for a considerable period has *ade

the ter* so closel0 identified +ith it. #8Moreover, as held in the case of A/6 !--/b - I67e- /6 #o @-8!rto He, H.S.!. - "-/-/6 P7/-, I/c. (. I67e- /6 #o @-8 Crto e, H-76 -t S:-8 /6!-toto:-/-/, petitioners appropriation of respondent5s corporate na*e cannot find =ustification under the

)eneric +ord rule.#:2 contrar0 rulin) +ould encoura)e other corporations to adopt verbati* and re)ister an

e(istin) and protected corporate na*e, to the detri*ent of the public.#'

Finall0, +e find the a+ard of P9$,$$$.$$ as attorne05s fees to be fair and reasonable. Artc7e 220' o< t:e C(7Co5eallo+s the a+ard of such fees +hen its clai*ant is co*pelled to liti)ate +ith third persons or to incure(penses to protect its =ust and valid clai*. In this case, despite its underta1in) to chan)e its corporate na*e in

case another fir* has acRFOR, the instant petition for revie+ on certiorari is hereb0 DNID for lac1 of *erit.

!osts a)ainst petitioner.

SO ORDRD.

6ellosillo, 2ctin) !."., !hair*an-, uisu*bin), and !alle=o, Sr., ""., concur.

Mendo?a, "., on official leave.

E(((((((((((((((((((((((((((((((((((((


Manila

S!OND DIVISION

G.R. No. 1*01% 78 21, 200%

SEVENTH #A3 A#VENTIST CONERENCE CHURCH O SOUTHERN PHILIPPINES, INC., -/5orreree/te5 b8 MANASSEH C. ARRANGUE4, "RIGI#O P. GULA3, RANCISCO M. LUCENARA, #IONICES


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O. TIPGOS, LORESTO C. MURILLON, ISRAEL C. NINAL, GEORGE G. SOMOSOT, ESSIE T. OR"ISO,LORETO PAEL -/5 OEL "ACU"AS,petitioners,vs.NORTHEASTERN MIN#ANAO MISSION O SEVENTH #A3 A#VENTIST, INC., -/5or reree/te5 b8OSUE A. LA3ON, =EN#ELL M. SERRANO, LORANTE P. T3 -/5 ETHRO CALAHAT -/5or SEVENTH

#A3 A#VENTIST CHURCH BO NORTHEASTERN MIN#ANAO MISSION,Respondents.

D ! I S I O N

CORONA, J.:

This petition for revie+ on certiorari assails the !ourt of 2ppeals !2- decision %and resolution;in !23.R. !VNo. 7%&88 affir*in), +ith *odification, the decision of the Re)ional Trial !ourt RT!- of 6a0u)an, 2)usan delSur, 6ranch : in !ivil !ase No. 8#.

This case involves a %,$8& s


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upheld&>e ans+er in the affir*ative.

The controvers0 bet+een petitioners and respondents involves t+o supposed transfers of the lot previousl0o+ned b0 the spouses !osio@ %- a donation to petitioners alle)ed predecessorsininterest in %&9& and ;- asale to respondents in %&'$.

Donation is undeniabl0 one of the *odes of ac


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stated@

G>Hhen Feli( !osio +as sho+n the 2bsolute Deed of Sale durin) the hearin) ((( he ac1no+led)ed that thesa*e +as his ((( but that it +as not his intention to sell the controverted propert0 because he had previousl0donated the sa*e lot to the South Philippine Cnion Mission of SD2 !hurch of 6a0u)ansperan?a. !osioavouched that had it been his intend*ent to sell, he +ould not have disposed of it for a *ere P;,$$$.$$ in t+oinstall*ents but for P9$,$$$.$$ or P8$,$$$.$$. 2ccordin) to hi*, the P;,$$$.$$ +as not a consideration of thesale but onl0 a for* of help e(tended.

A t:oro6: -/-78 -/5 er-7, /o/et:e7e, o< t:e #ee5 o< Abo7te S-7e 5c7oe5 t:-t t :- t:eee/t-7 reDte o< co/tr-ct r-/t to ??? Artc7e 1$1' o< t:e C(7 Co5e, e(cept that theconsideration of P;,$$$.$$ is so*e+hat insufficient for a G%,$8&sould then this inade

Corpo 2 Full

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