GR 41570; (September, 1934) (Digest)
G.R. No. 41570 ; September 6, 1934
Red Line Transportation Co. vs. Rural Transit Co., Ltd.
FACTS
The Rural Transit Company, Ltd. (RTC) filed an application with the Public Service Commission (PSC) for a certificate of public convenience to operate a transportation service between Ilagan and Tuguegarao and additional trips on its Manila-Tuguegarao line. Red Line Transportation Co. (Red Line) opposed, claiming it already adequately served the Ilagan-Tuguegarao route and that granting RTC’s application would cause ruinous competition. During the hearings, evidence revealed that the real party in interest was not RTC but the Bachrach Motor Company, Inc., which was using “Rural Transit Company, Ltd.” as a trade name. The PSC, relying on a prior resolution authorizing Bachrach Motor Co. to use RTC’s name as a trade name, granted the application to RTC. Red Line appealed. Subsequently, RTC was judicially dissolved.
ISSUE
Whether the Public Service Commission validly granted a certificate of public convenience to the Rural Transit Company, Ltd., given that the real party in interest was the Bachrach Motor Company, Inc., which was using RTC’s name as a trade name.
RULING
No. The Supreme Court set aside the PSC’s order. The Court held that a corporation, under the Corporation Law ( Act No. 1459 ), must operate under its own distinct corporate name. The PSC has no legal power to authorize one corporation (Bachrach Motor Co.) to assume the name of another existing corporation (Rural Transit Co., Ltd.) as a trade name. Such practice is void as it contravenes the law, leads to confusion, and may facilitate fraud. Since the application was filed in the name of RTC, which was not the real party in interest, the application was fictitious. The grant of the certificate to RTC was therefore invalid.
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