.R. No.

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

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

Barredo, J.:

FACTS:

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

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

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

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

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

1. 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;
2. 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;
3. 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.

RATIO:

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

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

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

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

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

WHEREFORE, judgment of the lower court is reversed, and this case is remanded to the trial court for further
proceedings consistent herewith with costs against appellees.