G.R. No.

96161 February 21, 1992

PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS
INDUSTRIAL DEVELOPMENT v. COURT OF APPEALS, SECURITIES &
EXCHANGE COMMISSION and STANDARD PHILIPS
CORPORATION,respondents.
FACTS:

Petitioner Philips Export B.V. (PEBV), aforeign corporation organized

under the laws of the Netherlands, although not engaged in business
here, is the registered owner of the trademarks PHILIPS and PHILIPS SHIELD
EMBLEM .

Respondent Standard Philips Corporation (Standard Philips), on the

other hand, was issued a Certificate of Registration by respondent
Commission on 19 May 1982.

Petitioners filed a letter complaint with the Securities & Exchange

Commission (SEC) asking for the cancellation of the word PHILIPS from
Private Respondents corporate name.

As a result of Private Respondents refusal to amend its Articles of

Incorporation, Petitioners filed with the SEC. Alleging, among others, that
Private Respondents use of the word PHILIPS amounts to an infringement
and clear violation of Petitioners exclusive right to use the same
considering that both parties engage in the same business.

Private Respondent countered that Petitioner PEBV has no legal

capacity to sue; that its use of its corporate name is not at all similar to
Petitioners trademark PHILIPS when considered in its entirety; and that its
products consisting of chain rollers, belts, bearings and cutting saw are
grossly different from Petitioners electrical products.
ISSUE: WON petitioner may sue private respondent.
HELD: YES.

The Court declared that a corporations right to use its corporate and
trade name is a property right, a rightin rem, which it may assert and
protect against the world in the same manner as it may protect its tangible
property, real or personal, against trespass or conversion. It is regarded, to
a certain extent, as a property right and one which cannot be impaired or
defeated by subsequent appropriation by another corporation in the same
field.

A name is peculiarly important as necessary to the very existence of a

corporation. Its name is one of its attributes, an element of its existence,
and essential to its identity.

A corporation acquires its name by choice and need not select a name
identical with or similar to one already appropriated by a senior corporation
while an individuals name is thrust upon him. A corporation can no more
use a corporate name in violation of the rights of others than an individual
can use his name legally acquired so as to mislead the public and injure
another

Our own Corporation Code, in its Section 18, expressly 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
law.Where a change in a corporate name is approved, the commission shall
issue an amended certificate of incorporation under the amended name.
The statutory prohibition cannot be any clearer. To come within its scope, two
requisites must be proven, namely:
(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.

In this regard, there is no doubt with respect to Petitioners prior

adoption of the name PHILIPS as part of its corporate name. Petitioners
Philips Electrical and Philips Industrial were incorporated on 29 August 1956
and 25 May 1956, respectively, while Respondent Standard Philips was
issued a Certificate of Registration on 12 April 1982, twenty-six (26) years
later (Rollo, p. 16). Petitioner PEBV has also used the trademark PHILIPS

on electrical lamps of all types and their accessories since 30 September

1922.

The second requisite no less exists in this case. In determining 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 look to the record as well as the
names themselves. While the corporate names of Petitioners and Private
Respondent are not identical, a reading of Petitioners corporate names, to
wit: PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS
INDUSTRIAL DEVELOPMENT, INC., inevitably leads one to conclude that
PHILIPS is, indeed, the dominant word in that all the companies affiliated
or associated with the principal corporation, PEBV, are known in the
Philippines and abroad as the PHILIPS Group of Companies.

What is lost sight of, however, is that PHILIPS is a trademark or trade

name which was registered as far back as 1922. Petitioners, therefore, have
the exclusive right to its use which must be free from any infringement by
similarity. A corporation has an exclusive right to the use of its name, which
may be protected by injunction upon a principle similar to that upon which
persons are protected in the use of trademarks and tradenames (18 C.J.S.
574). Such principle proceeds upon the theory that it is a fraud on the
corporation which has acquired a right to that name and perhaps carried on
its business thereunder, that another should attempt to use the same
name, or the same name with a slight variation in such a way as to induce
persons to deal with it in the belief that they are dealing with the
corporation which has given a reputation to the name.

Facts:

Lyceum of the Philippines, Inc. is an educational institution duly

registered with Securities and Exchange Commission since 1950. (Sept)

In 1984, it instituted proceedings before SEC to compel several

education institutions to delete the word Lyceum from their corporate
names and to permanently enjoin them from using the said word.

Their action is based on a SEC Resolution wherein SEC ordered the

Lyceum of Baguio to change its corporate name as it is identical to the
Lyceum of the Philippines which was able to register first.

SEC En Banc ruled that the attaching of the geographical names after
the word Lyceum sufficiently distinguishes one from the other.

However, the CA ruled otherwise.

Issue No.1: WON the corporate names of the parties are identical with or
deceptively similar to that of the petitioner. NO

Held: The corporate names of the parties carry the word Lyceum but
confusion and deception are precluded by the appending of geographic
names. Lyceum generally refers to a school or an institution of learning and it
is natural to use this word to designate an entity which is organized and
operating as an educational institution.
Thus, we do not believe that the "Lyceum of Aparri" can be mistaken by the
general public for the Lyceum of the Philippines, or that the "Lyceum of
Camalaniugan" would be confused with the Lyceum of the Philippines.
Issue No. 2: WON the use by the Lyceum of the Philippines of the word
Lyceum in its corporate name has been for such length of time and with such
exclusivity as to have become associated or identified with the petitioner
institution in the mind of the general public. (Doctrine of Secondary
meaning). NO
Held: Doctrine of Secondary meaning is a word of phrase originally
incapable of exclusive appropriation, might nevertheless have been used so
long and so exclusively by one producer with reference to his article that, in
trade and to that branch of the purchasing public, the word or phrase has
come to mean that the article was his product.
Lyceum of the Philippines has not gained exclusive use of Lyceum by long
passage of time. The number alone of the private respondents suggests
strongly that the use of Lyceum has not been attended with the exclusivity
essential for the applicability of the doctrine. It may be noted that one of the
respondents Western Pangasinan Lyceum used such term 17 years before
the petitioner registered with the SEC. Moreover, there may be other schools
using the name but not registered with the SEC because they have not
adopted the corporate form of organization.
DOCTRINE:
Doctrine of secondary meaning can be extended to corporation name but
must comply with the requirement that it has been used so long and so
exclusively by one and that the said name has come to mean that it is
referred to as that corporation.
Western Pangasinan Lyceum 27 October 1950
Lyceum of Cabagan 31 October 1962
Lyceum of Lallo, Inc. 26 March 1972
Lyceum of Aparri 28 March 1972
Lyceum of Tuao, Inc. 28 March 1972
Lyceum of Camalaniugan 28 March 1972

Etymologically, the word "Lyceum" is the Latin word for the Greek lykeion
which in turn referred to a locality on the river Ilissius in ancient Athens
"comprising an enclosure dedicated to Apollo and adorned with fountains
and buildings erected by Pisistratus, Pericles and Lycurgus frequented by the
youth for exercise and by the philosopher Aristotle and his followers for
teaching."
Lyceum" is in fact as generic in character as the word "university." In the
name of the petitioner, "Lyceum" appears to be a substitute for "university;"
in other places, however, "Lyceum," or "Liceo" or "Lycee" frequently denotes
a
secondary
school
or
a
college.

Citation:

G.R. No. 101897

March 5, 1993

LYCEUM OF THE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS,

LYCEUM OF APARRI, LYCEUM OF CABAGAN, LYCEUM OF CAMALANIUGAN,
INC., LYCEUM OF LALLO, INC., LYCEUM OF TUAO, INC., BUHI LYCEUM,
CENTRAL LYCEUM OF CATANDUANES, LYCEUM OF SOUTHERN
PHILIPPINES, LYCEUM OF EASTERN MINDANAO, INC. and WESTERN
PANGASINAN LYCEUM, INC., respondents
BATANGAS LAGUNA TAYABAS BUS COMPANY, INC vs. BITANGA
G.R. No. 137934/ G.R. No. 137936

August 10, 2001

FACTS: On October 28, 1997, Dolores Potenciano, Max Joseph Potenciano,

Mercedelin Potenciano, Delfin Yorro, and Maya Industries, Inc., entered into a
Sale and Purchase Agreement, whereby they sold to BMB Property Holdings,
Inc., represented by its President, Benjamin Bitanga, their 21,071,114 shares
of stock in BLTB. The said shares represented 47.98% of the total
outstanding capital stock of BLTB. The purchase price for the shares of stock
was P72,076,425.00. A downpayment was made while the balance was
payable on November 26, 1997. The contracting parties stipulated that the
downpayment was conditioned upon receipt by the buyer of certain
documents upon signing of the Agreement, namely, the Secretary's
Certificate stating that the Board of Directors of Maya Industries, Inc.
authorized the sale of its shares in BLTB and the execution of the Agreement,

and designating Dolores A. Potenciano as its Attorney-in-Fact; the Special

Power of Attorney executed by each of the sellers in favor of Dolores A.
Potenciano for purposes of the Agreement; the undated written resignation
letters of the Directors of BLTB, except Henry John A. Potenciano, Michael A.
Potericiano and Candido A. Potenciano; a revocable proxy to vote the subject
shares made by the sellers in favor of the buyer; a Declaration of Trust
made by the sellers in favor of the buyer acknowledging that the
subject shares shall be held in trust by the sellers for the buyer
pending their transfer to the latter's name; and the duly executed
capital gains tax return forms covering the sale, indicating no taxable gain on
the same. Furthermore, the buyer guaranteed that it shall take over the
management and operations of BLTB but shall immediately surrender the
same to the sellers in case it fails to pay the balance of the purchase price on
November 26, 1997. On November 21, 1997, at a meeting of the
stockholders of BLTB, Benjamin Bitanga and Monina Grace Lim were elected
as directors of the corporation Subsequently, on November 28, 1997,
another stockholders' meeting was held, wherein Laureano A. Siy and Renato
L. Leveriza were elected as directors. At the same meeting, the Board of
Directors of BLTB elected James Olayvar, Eduardo Azucena, Evelio Custodia,
and Gemma Santos as officers. During a meeting of the Board of Directors on
April 14, 1998, the newly elected directors of BLTB scheduled the annual
stockholders' meeting on May 19, 1998, to be held at the principal office of
BLTB in San Pablo, Laguna. Before the scheduled meeting, Michael
Potenciano wrote Benjamin Bitanga, requesting for a postponement of the
stockholders' meeting due to the absence of a thirty-day advance notice.
However, no response from Bitanga on whether or not the request for
postponement was favorably acted upon. On the scheduled date of the
meeting, inasmuch as there was no notice of postponement prior to that, a
total of 286 stockholders, representing 87% of the shares of stock of BLTB,
arrived and attended the meeting. The majority of the stockholders present
rejected the postponement and voted to proceed with the meeting. The
Potenciano group was re-elected to the Board of Directors, and a new set of
officers was thereafter elected. On May 21, 1998, the Bitanga group filed
with the SEC a Complaint for Damages and Injunction. Their prayer for the
issuance of a temporary restraining order was, however, denied at the exparte summary hearing conducted by SEC Chairman Perfecto Yasay, Jr.
Likewise, the Potenciano group filed on May 25, 1998, a Complaint for
Injunction and Damages with Preliminary Injunction and Temporary
Restraining Order with the SEC. The SEC Chairman Perfecto Yasay, Jr. issued
a temporary restraining order enjoining the Bitanga group from acting as

officers and directors of BLTB. On June 8, 1998, the Bitanga group filed
another complaint with application for a writ of preliminary injunction and
prayer for temporary restraining order, seeking to annul the May 19, 1998
stockholders' meeting. A joint hearing was conducted. On June 17, 1998, the
SEC Hearing Panel granted the Bitanga group's application for a writ of
preliminary injunction upon the posting of a bond in the amount of
P20,000,000.00. It declared that the May 19, 1998 stockholders' meeting
was void on the grounds that, first, Michael Potenciano had himself asked for
its postponement due to improper notice; and, second, there was no quorum,
since BMB Holdings, Inc., represented by the Bitanga group, which then
owned 50.26% of BLTB's shares having purchased the same from the
Potenciano group, was not present at the said meeting. The Hearing Panel
further held that the Bitanga Board remains the legitimate Board in a holdover capacity. The Potenciano group filed a petition for certiorari with the SEC
En Banc on June 29, 1998, seeking a writ of preliminary injunction to restrain
the implementation of the Hearing Panel's assailed Order. On July 21, 1998,
the SEC En Banc set aside the June 17, 1998 Order of the Hearing Panel and
issued the writ of preliminary injunction prayed for. The Bitanga group
immediately filed a petition for certiorari with the Court of Appeals on July
22, 1998, followed by a Supplemental Petition on August 10, 1998.
Meanwhile, on July 29, 1998, the SEC En Banc issued a writ of preliminary
injunction against the Bitanga group, after the Potencianos posted the
required bond of P20,000,000.00. On November 23, 1998, the CA rendered
the now assailed Decision, reversing the assailed Orders of the SEC En Banc
and reinstating the Order of the Hearing Panel ordered dated June 17, 1998.
The CA denied the Motions for Reconsideration in a Resolution dated March
25, 1999. Hence, this petition for review.
ISSUE: Whether or not the stockholders' meeting on May 19, 1998 was void
since BMB Holdings, Inc., represented by the Bitanga group was not present
at the said meeting.
RULING: Until registration is accomplished, the transfer, though valid
between the parties, cannot be effective as against the corporation. Thus,
the unrecorded transferee, the Bitanga group in this case, cannot vote nor be
voted for. The purpose of registration, therefore, is two-fold: to enable the
transferee to exercise all the rights of a stockholder, including the right to
vote and to be voted for, and to inform the corporation of any change in
share ownership so that it can ascertain the persons entitled to the rights
and subject to the liabilities of a stockholder. Until challenged in a proper

proceeding, a stockholder of record has a right to participate in any

meeting; his vote can be properly counted to determine whether a
stockholders' resolution was approved, despite the claim of the alleged
transferee. On the other hand, a person who has purchased stock, and who
desires to be recognized as a stockholder for the purpose of voting, must
secure such a standing by having the transfer recorded on the corporate
books. Until the transfer is registered, the transferee is not a stockholder but
an outsider.
WHEREFORE, in view of all the foregoing, the instant petitions for review are
GRANTED. The Decision of the Court of Appeals dated November 23, 1998 in
CA-G.R. SP No. 48374 and its resolution dated March 25, 1999 are SET ASIDE.
The Orders of the SEC En Banc dated July 21, 1998 and July 27, 1998 in SEC
Case No. EB 611 are ordered REINSTATED.

Rural Bank of Salinas Inc. vs. CA (supra)

G.R. No. 96674; June 26, 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).
Almost four months later, or two (2) days before the death of Clemente
Guerrero on June 24, 1980, private respondent Melania Guerrero, pursuant to
the same Special Power of Attorney, executed a Deed of Assignment for the
remaining one (1) share of stock in favor of private respondent Francisco
Guerrero, Sr.

Subsequently, private respondent Melania Guerrero presented to petitioner

Rural Bank of Salinas the two (2) Deeds of Assignment for registration with a
request for the transfer in the Bank's stock and transfer book of the 473
shares of stock so assigned, the cancellation of stock certificates in the name
of Clemente G. Guerrero, and the issuance of new stock certificates covering
the transferred shares of stocks in the name of the new owners thereof.
However, petitioner Bank denied the request of respondent Melania
Guerrero.
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:
WON the corporate secretary is compelled to register the said transfer
of shares.

HELD:
YES. Based on those circumstances, there was a clear duty on the part
of the corporate secretary to register the 473 shares in favor of the new
owners, since the person who sought the transfer of shares had express
instructions from and specific authority given by the registered stockholder
to cause the disposition of stocks registered in his name.
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, mandamus
will lie to compel the officers of the corporation to transfer said stock in the
books of the corporation. This is because the corporation's obligation to
register is ministerial. (Note, however, that in such cases, the person
requesting the registration must be the prima facie owner of the shares. Cf.
Lim Tay v. CA, 293 SCRA 634)