GR 122174; (October, 2002) (Digest)
G.R. No. 122174; October 3, 2002
Industrial Refractories Corporation of the Philippines, petitioner, vs. Court of Appeals, Securities and Exchange Commission and Refractories Corporation of the Philippines, respondents.
FACTS
Respondent Refractories Corporation of the Philippines (RCP) was incorporated on October 13, 1976, and registered its corporate name on June 22, 1977. Petitioner Industrial Refractories Corp. of the Philippines (IRCP) was incorporated on August 23, 1979, originally named “Synclaire Manufacturing Corporation,” and amended its Articles of Incorporation on August 23, 1985, to adopt its current name. Both companies are local suppliers of monolithic gunning mix. RCP filed a petition with the Securities and Exchange Commission (SEC) on April 14, 1988, to compel IRCP to change its corporate name on the ground that it is confusingly similar. The SEC ruled in favor of RCP on July 23, 1993, ordering IRCP to amend its Articles of Incorporation by deleting “Refractories Corporation of the Philippines” from its name and to pay attorney’s fees. The SEC En Banc, in a Decision dated May 10, 1994, modified the order, directing IRCP to delete or drop only the word “Refractories” from its corporate name. IRCP appealed to the Court of Appeals, which upheld the SEC’s jurisdiction and finding of confusing similarity, and also ruled that the petition was filed beyond the reglementary period. IRCP elevated the case to the Supreme Court via a petition for review on certiorari.
ISSUE
1. Whether the petition for review filed by IRCP with the Court of Appeals was timely.
2. Whether the SEC has jurisdiction over the case.
3. Whether the corporate name “Industrial Refractories Corp. of the Philippines” is confusingly or deceptively similar to “Refractories Corp. of the Philippines.”
4. Whether the award of attorney’s fees is proper.
RULING
1. The Supreme Court agreed with the Court of Appeals that the petition was filed beyond the reglementary period. Applying Supreme Court Circular No. 1-91, the period to appeal was fifteen (15) days from notice. Based on certifications from SEC officials, which enjoy a presumption of regularity, IRCP received the SEC En Banc Decision on June 9, 1994, filed a motion for reconsideration on June 25, 1994, received the Order denying the motion on August 15, 1994, and filed the petition with the Court of Appeals on September 6, 1994, which was twenty-one (21) days late. The SEC decision had thus attained finality.
2. The SEC has jurisdiction over the case. Its jurisdiction is not confined to the adjudicative functions under P.D. 902-A but includes absolute jurisdiction, supervision, and control over all corporations, including the regulatory power to enforce Section 18 of the Corporation Code, which prohibits the registration of a corporate name that is identical or deceptively similar to an existing one. This power is exercised to prevent public confusion.
3. The corporate names are confusingly or deceptively similar. Under the test in Philips Export B.V. vs. Court of Appeals, two requisites must be proven: (a) the complainant acquired a prior right to the use of the corporate name, and (b) the proposed name is identical, deceptively similar, or patently deceptive. RCP has prior right, being incorporated in 1976, nine years before IRCP amended its name in 1985. The names are patently similar, both containing the identical words “Refractories,” “Corporation,” and “Philippines,” with only the word “Industrial” distinguishing them, which merely denotes a field of activity. Both companies cater to the same clientele (the steel industry), and the SEC found instances of actual confusion. The similarity is such that it may mislead a person using ordinary care.
4. The award of attorney’s fees in the amount of P50,000.00 is fair and reasonable. Under Article 2208 of the Civil Code, attorney’s fees are recoverable when a party is compelled to litigate to protect its interest. RCP was compelled to litigate because IRCP, despite an undertaking to change its name if another had prior right, refused to do so.
The petition for review on certiorari was DENIED for lack of merit.