21. UMALI vs.

CA
FACS: Mauricia was administratrix in charge over a parcel of land left be Felipe. Said land was
mortgaged to the DBP and was about to be foreclosed but then Mauricias nephew, Santiago Rivera,
proposed that they convert the land into 4 subdivisions so that they can raise the necessary money to
avoid foreclosure. Mauricia agreed. Rivera sought to develop said land through his company, Slobec
Realty Corporation (SRC), of which he was also the president. SRC then contracted with Bormaheco, Inc.
for the purchase of one tractor. Bormaheco agreed to sell the tractor on an installment basis. At the same
time, SRC mortgaged said tractor to Bormaheco as security just in case SRC will default. As additional
security, Mauricia and other family members executed a surety agreement whereby in case of default in
paying said tractor, the Insurance Corporation of the Philippines (ICP) shall pay the balance. The surety
bond agreement between Mauricia and ICP was secured by Mauricias parcel of land (same land to be
developed). SRC defaulted in paying said tractor. Bormaheco foreclosed the tractor but it wasnt enough
hence ICP paid the deficiency. ICP then foreclosed the property of Mauricia. ICP later sold said property
to Philippine Machinery Parts Manufacturing Corporation (PMPMC). PMPMC then demanded Mauricia
to vacate the premises of said property.
While all this was going on, Mauricia died. Her successor-administratrix, Umali, questioned the
foreclosure made by ICP. Umali alleged that all the transactions are void and simulated hence they were
defrauded; that through Bormahecos machinations, Mauricia was fooled into entering into a surety
agreement with ICP; that Bormaheco even made the premium payments to ICP for said surety bond; that
the president of Bormaheco is a director of PMPMC; that the counsel who assisted in all the transactions,
Atty. Martin De Guzman, was the legal counsel of ICP, Bormaheco, and PMPMC.
ISSUE: Whether or not the veil of corporate fiction should be pierced.
HELD: No. There is no clear showing of fraud in this case. The mere fact that Bormaheco paid said
premium payments to ICP does not constitute fraud per se. As it turned out, Bormaheco is an agent of
ICP. SRC, through Rivera, agreed that part of the payment of the mortgage shall be paid for the insurance.
Naturally, when Rivera was paying some portions of the mortgage to Bormaheco, Bormaheco is applying
some parts thereof for the payment of the premium and this was agreed upon beforehand.
The veil of corporate fiction cant be pierced also by the simple reason that the businesses of two
or more corporations are interrelated, absent sufficient showing that the corporate entity was purposely
used as a shield to defraud creditors and third persons of their rights. In this case, there is no justification
for disregarding their separate personalities. Moreover, Umali is not enforcing a claim against the
individual members of the corporations. They are not claiming said members to be liable. Umali is merely
questioning the validity of the foreclosure.
23. AVELINA G. RAMOSO, RENATO B. vs. CA
FACTS: Ramoso and several others are investors and majority stock holders of the franchise branches of
Commercial Credit Corporation (CCC). CCC is a lending and investment firm. CCC contracted with its
franchise branches for the latter to assign its receivables to CCC. But this practice was discontinued due
to a prohibition (DOSRI rule) issued by the Central Bank where corporations are prohibited from lending
funds to persons with related interests, among others. To circumvent this, CCC incorporated CCC Equity,
a wholly owned subsidiary to manage the franchise branches. CCC later changed its name to General
Credit Corporation (GCC).
Later on, Ramoso alleged that they discovered several bad business practices being conducted by
GCC; that such questionable practices divested GCC of its assets thereby placing the franchise branches
at a disadvantage; that GCC, through CCC Equity mismanaged the franchise branches thereby causing
imminent losses to the investors.

Ramoso et al then sued GCC before SEC. The hearing officer ruled in favor of Ramoso et al. He
pierced the veil of corporate fiction and declared that the franchise branches, GCC, and CCC equity are
one and the same corporation; that as such, the franchise branches, in whom Ramoso et al invested, are
not liable to the obligations incurred by GCC. The SEC en banc however reversed the ruling of the
hearing officer. The Court of Appeals affirmed the SEC en banc.
ISSUE: Whether or not the veil of corporate fiction should be pierced.
HELD: No. Whether the existence of the corporation should be pierced depends on questions of facts,
appropriately pleaded. In this case, Ramoso et al did not properly plead their cause. They merely alleged
that CCC Equity is a conduit of GCC. As found by the SEC en banc, Ramoso et al were not able to prove
that CCC Equity was incorporated in order to perpetrate fraud against them. Mere allegation that a
corporation is the alter ego of the individual stockholders is insufficient. The presumption is that the
stockholders or officers and the corporation are distinct entities. The burden of proving otherwise is on
the party seeking to have the court pierce the veil of the corporate entity. It was not shown that the debts
incurred by GCC were actually incurred in bad faith.
24. BOYER ROXAS VS. COURT OF APPEALS
FACTS: When Eugenia Roxas died, her heirs formed a corporation under the name and style of Heirs of
Eugenia V. Roxas, Inc. using her estate as the capital of the corporation, the private respondent herein.
It was primarily engaged in agriculture business, however it amended its purpose to enable it to engage in
resort and restaurant business. Petitioners are stockholders of the corporation and two of the heirs of
Eugenia. By tolerance, they were allowed to occupy some of the properties of the corporation as their
residence. However, the BOD of the corporation passed a resolution evicting the petitioners from the
property of the corporation because the same will be needed for expansion.
Respondent presented its evidence averring that the subject premises are owned by the
corporation. Whereas petitioners argues that their occupancy of the subject premises should be respected
because they own an aliquot part of the corporation as stockholders, and that the veil of corporate
fiction must be pierced by virtue thereof.
ISSUE: WON the piercing of the corporate veil is proper.
HELD: No. The separate personality of a corporation may only be disregarded when the corporation is
used as a cloak or cover for fraud or illegality, or to work injustice, or when necessary to achieve equity
or when necessary for the protection of creditors.
25. FRANCISCO and MERRYLAND DEVELOPMENT CORPORATION vs. MEJIA, as
Executrix of the Testate Estate of GUTIERREZ
FACTS: Gutierrez was the registered owner of a parcel of land in Camarin, Caloocan City. Gutierrez and
Cardale Financing executed a Deed of Sale with Mortgage relating such lots. Due to Cardales failure to
settle its mortgage obligation, Gutierrez filed a complaint for rescission of the contract. During the
pendency of the rescission case, Gutierrez died and was substituted by her executrix, Mejia. Francisco
represented Cardale in her capacity as VP and Treasurer of Cardale, she lost interest in proceeding with
the presentation of its evidence and the case lapsed into inactive status for a period of about 14 years.
In the meantime, the mortgaged parcels of land became delinquent in the payment of RE taxes
which culminated in their levy and auction sale in satisfaction of the tax arrears. The highest bidder for
the three parcels of land was Merryland, whos President and majority stockholder is Francisco. Francisco
did not mention the tax delinquencies and sale in favor of Merryland.

Mejia filed a case against Francisco, Merryland and the Register of Deeds of Caloocan City
alleging that Francisco controlled Cardale and Merryland and that she had employed fraud by
intentionally causing Cardale to default in its payment of real property taxes on the mortgaged properties
so that Merryland could purchase the same by means of a tax delinquency sale.
ISSUE: WON the Doctrine of Piercing the Veil of Corporate Fiction should be applied in case at bar.
HELD: Yes. If it is proven that the corporate officer has used the corporate fiction to defraud a third party,
or that he has acted negligently, maliciously or in bad faith, then the corporate veil shall be lifted and he
shall be held personally liable for the particular corporate obligation involved.
In this case, Francisco knew that Cardale of which she was vice-president and treasurer had an
outstanding obligation to Gutierrez for the unpaid balance of the real properties which Cardale purchased
from Gutierrez. She also knew that Gutierrez had a mortgage lien on the said properties to secure
payment of the aforesaid obligation. She likewise knew that the said mortgaged properties were under
litigation which was an action filed by Gutierrez against Cardale for rescission of the sale and/or recovery
of said properties. Despite such knowledge, appellee Francisco did not inform Gutierrezs Estate or the
Executrix (herein appellant) as well as the trial court that the mortgaged properties had incurred tax
delinquencies, and that Final Notices dated July 9, 1982 had been sent by the City Treasurer of Caloocan
demanding payment of such tax arrears within ten (10) days from receipt thereof.
26. LBC EXPRESS, INC. vs. THE COURT OF APPEALS, ADOLFO M. CARLOTO, and RURAL
BANK OF LABASON, INC.
FACTS: Private respondent Adolfo Carloto , incumbent President-Man-ager of private respondent Rural
Bank of Labason, charged the petitioner for Damages Arising from Non-performance of Obligation. After
hearing, the trial court rendered its decision against the petitioner. The court ordered, among others, that
the respondent be paid moral damaged in the amount of P10,000.
ISSUE: WON respondent Rural Bank of Labason, Inc., being an artificial person should be awarded
moral damages.
HELD: No. Moral damages are granted in recompense for physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury. A corporation, being an artificial person and having existence only in legal contemplation, has no
feelings, no emotions, no senses; therefore, it cannot experience physical suffering and mental anguish.
Mental suffering can be experienced only by one having a nervous system and it flows from real ills,
sorrows, and grieves of lifeall of which cannot be suffered by respondent bank as an artificial person.
27. Alfafara vs. Acebedo Optical Co., Inc.
FACTS: Petitioners are optometrists. They brought an injunctive suit to enjoin respondent Acebedo
Optical Co., Inc. and its agents, representatives, and/or employees from practicing optometry in the
province of Cebu.
They claimed that, through the licensed optometrists under its employ, respondent had been
engaging in the practice of optometry by examining the human eye, analyzing the ocular functions,
prescribing ophthalmic lenses, prisms, and contact lenses; and conducting ocular exercises, visual
trainings, orthoptics, prosthetics, and other preventive or corrective measures for the aid, correction, or
relief of the human eye. They contended that such acts of respondent were done in violation of the
Optometry Law (R.A. No. 1998)3 and the Code of Ethics for Optometrists
In its answer, respondent averred that the advertisements referred to by petitioner were part of its
promotion to make known to the public the opening of its new branches in Cebu; that incidental to its

business of selling optical products, it hired duly licensed optometrists who conducted eye examination,
prescribed ophthalmic lenses, and rendered other services. that it exercised neither control nor supervision
over the optometrists under its employ; and that the hired optometrists exercised neither control nor
supervision in the sale of optical products and accessories by respondent.
The trial court found that the hiring of licensed optometrists by the respondent was unlawful because it
resulted in the practice of the Optometry profession by respondent, a juridical person.
ISSUE: WON the practive of optometry is separate and distinct from the business.
HELD: Yes. An optometrist is a person who has been certified by the Board of Optometry and
registered with the Professional Regulation Commission as qualified to practice optometry in the
Philippines. Thus, only natural persons can engage in the practice of optometry and not corporations.
Respondent, which is not a natural person, cannot take the licensure examinations for optometrist and,
therefore, it cannot be registered as an optometrist under R.A. No. 1998.
Acebedo simply dispensed optical and ophthalmic instruments and supplies. It was pointed out that R.A.
No. 1998 does not prohibit corporations from employing licensed optometrists. What it prohibits is the
practice of optometry by individuals who do not have a license to practice.
The optometrists are employees of respondent, their practice of optometry is separate and distinct from
the business of respondent of selling optical products
1. ALHAMBRA CIGAR & CIGARETTE MANUFACTURING COMPANY, INC vs SEC
FACTS: Alhambra Cigar, by its corporate articles, was to exist for fifty (50) years from incorporation.
After its term, it entered into a state of liquidation. Thereafter, a new corporation, Alhambra Industries,
Inc., was formed to carry on the business of Alhambra Cigar. Gamboa was the trustee to take charge of its
liquidation. Within Alhambra's three-year statutory period for liquidation - RA 3531 was enacted into law
which amended Sec 18 of the Corporation Law; it empowered domestic private corporations to extend
their corporate life beyond the period fixed by the articles of incorporation for a term not to exceed 50
years in any one instance.
At a special meeting, Alhambra's board of directors resolved to amend paragraph 4 of its AI to
extend its corporate life for an additional fifty years, or a total of 100 years from its incorporation. The
amended AI was filed with SEC. However, it was returned because RA 3531 cannot be availed of by the
said corporation as it has no retroactive effect.
ISSUE: May a corporation extend its life by amendment of its articles of incorporation effected during the
three-year statutory period for liquidation when its original term of existence had already expired.
HELD: No. A corporation cannot extend its life by amendment of its articles of incorporation effected
during the three-year statutory period for liquidation when its original term of existence had already
expired. Life of Alhambra expired on 1962 whereas RA 3531 effectivity date in on 1963. Thus, when
Alhambra made its attempt to extend its corporate existence, its original term of fifty years had already
expired, it was in the midst of the three-year grace period statutorily fixed in Section 77 of the
Corporation Law.
Plain from the language of the provision is its meaning: continuance of a "dissolved" corporation
as a body corporate for three years has for its purpose the final closure of its affairs, and no other.
The common law rule, at the beginning, was rigid and inflexible in that upon its dissolution, a
corporation became legally dead for all purposes. Statutory authorizations had to be provided for its
continuance after dissolution "for limited and specified purposes incident to complete liquidation of its
affairs".3 Thus, the moment a corporation's right to exist as an "artificial person" ceases, its corporate
powers are terminated "just as the powers of a natural person to take part in mundane affairs cease to exist

upon his death". There is nothing left but to conduct, as it were, the settlement of the estate of a deceased
juridical person.
2. PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL
DEVELOPMENT vs. CA, SEC and STANDARD PHILIPS CORPORATION
FACTS: Philips Export, a foreign 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 . 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 SEC asking for the cancellation of the word "PHILIPS" from
Private Respondent's corporate name. As a result of respondents refusal to amend its AI, petitioners filed
a case with the SEC alleging, among others, that Private Respondent's 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. 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 corporation's right to use its corporate and trade name is a property
right, a right in 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. 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.
3. LAUREANO VS. CA
FACTS: Spouses Reynaldo Laureano and Florence Laureano are majority stockholders of LAUREANO
INVESTMENT & DEVELOPMENT CORPORATION. They entered into a series of loan and credit
transactions with Philippine National Cooperative Bank (PNCB). To secure payment of the loans, they
executed Deeds of Real Estate Mortgage. In view of their failure to pay their indebtedness, PNCB applied
for extrajudicial foreclosure of the real estate mortgages.
Bormaheco, Inc. became the successor of the obligations and liabilities of PNCB over subject lots
by virtue of a Deed of Sale/Assignment.
Bormaheco, Inc. filed an ex-parte petition with the Registry of Deeds of Makati for the issuance
of a writ of possession over various lots that it bought from a bank. A motion for intervention was filed by
LIDECO Corporation for certain adverse claims. Bormaheco opposed the motion on the ground that
Lideco has no personality to sue because it is not a juridical entity. Apparently, Lideco is not a corporation
registered with the Securities and Exchange Commission.

ISSUE: May the plaintiff which purports to be a corporation validly bring suit under a name other than
that registered with the Securities and Exchange Commission?
HELD: No. Art. 36. Corporate powers and capacity. Every corporation incorporated under this Code
has the power and capacity, among others, to sue and be sued in its corporate name.
In the case at bar, Lideco Corporation had no personality to intervene since it had not been duly
registered as a corporation. If petitioner legally and truly wanted to intervene, it should have used its
corporate name as the law requires and not another name which it had not registered. Indeed, as the
Respondent Court found, nowhere in the motion for intervention and complaint in intervention does it
appear that Lideco Corporation stands for Laureano Investment and Development Corporation.
Bormaheco, Inc., thus, was not estopped from questioning the juridical personality of Lideco
Corporation, even after the trial court had allowed it to intervene in the case.
A corporation cannot sue under a name other than that registered with the SEC. The contention
that Laureano Investment & Development Corporation merely used the abbreviation is not tenable.
Lideco Corporation had no personality to intervene since it had not been duly registered as a
corporation.
4) Gala vs Ellice Agro-Industrial Corporation
FACTS:
Ellice Agro-Industrial Corporation was formed by spouses Manuel and Alicia Gala, their children
Guia Domingo, Ofelia Gala, Raul Gala, and Rita Benson, and their encargados Virgilio Galeon and Julian
Jader. The spouses transferred several parcels of land as payment of their subscriptions. Subsequently,
Guia Domingo, Ofelia Gala, Raul Gala, Virgilio Galeon and Julian Jader incorporated the Margo
Management and Development Corporation. Manuel Galathen transferred his shares in Ellice to Margo
and Raul Gala. Alicia transferred her shares to de Villa, Ofelia, Raul and Margo. de Villa later on
transferred his shares to Margo.
A special stockholders meeting of Margo was held where Raul Gala was elected as chairman.
During the meeting, the board approved several actions, including the commencement of proceedings to
annul certain dispositions of Margos property made by Alicia Gala. The board also resolved to change
the name of the corporation to MRG Management and Development Corporation. Similarly, a special
stockholders meeting of Ellice was held to elect a new board of directors where Raul Gala, likewise, was
elected as chairman.
Respondents filed against petitioners with the SEC a petition for the appointment of a
management committee or receiver, accounting and restitution by the directors and officers, and the
dissolution of Ellice Agro-Industrial Corporation for alleged mismanagement, diversion of funds,
financial losses and the dissipation of assets. Whereas, petitioners initiated a complaint against the
respondents praying for, among others, the nullification of the elections of directors and officers of both
Margo Management and Development Corporation and Ellice Industrial Corporation and the return of all
titles to real property in the name of Margo and Ellice, as well as all corporate papers and records of both
Margo and Ellice which are in the possession and control of the respondents.
ISSUE:
WON SEC has authority to inquire on the matters.
HELD:
No. If a corporations purpose, as stated in the Articles of Incorporation, is lawful, then the SEC
has no authority to inquire whether the corporation has purposes other than those stated.

The best proof of the purpose of a corporation is its articles of incorporation and by-laws. The articles of
incorporation must state the primary and secondary purposes of the corporation, while the by-laws outline
the administrative organization of the corporation, which, in turn, is supposed to insure or facilitate the
accomplishment of said purpose. In the case at bar, a perusal of the Articles of Incorporation of Ellice and
Margo shows no sign of the allegedly illegal purposes that petitioners are complaining of. It is well to
note that, if a corporations purpose, as stated in the Articles of Incorporation, is lawful, then the SEC has
no authority to inquire whether the corporation has purposes other than those stated, and mandamus will
lie to compel it to issue the certificate of incorporation.
5. Young Auto Supply vs. Court of Appeals
FACTS: On 28 October 1987, YASCO represented by Garcia, its president, Nelson Garcia and Vicente
Sy, sold all of their shares of stock in Consolidated Marketing & Development Corporation (CMDC) to
George C. Roxas. The purchase price was P8,000,000.00 payable as follows: a down payment of
P4,000,000.00 and the balance of P4,000,000.00 in four postdated checks of P1,000,000.00 each.
Immediately after the execution of the agreement, Roxas took full control of the four markets of CMDC.
However, the vendors held on to the stock certificates of CMDC as security pending full payment of the
balance of the purchase price. The first check of P4,000,000.00, representing the down payment, was
honored by the drawee bank but the four other checks representing the balance of P4,000,000.00 were
dishonored. In the meantime, Roxas sold one of the markets to a third party. Out of the proceeds of the
sale, YASCO received P600,000.00, leaving a balance of P3,400,000.00.
Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to the proceeds of
the sale of the CMDC shares to Nemesio Garcia. On 10 June 1988, YASCO and Garcia filed a complaint
against Roxas in the Regional Trial Court, Branch 11, Cebu City, praying that Roxas be ordered to pay
them the sum of P3,400,000.00 or that full control of the three markets be turned over to YASCO and
Garcia. The complaint also prayed for the forfeiture of the partial payment of P4,600,000.00 and the
payment of attorney's fees and costs.
Failing to submit his answer, and on 19 August 1988, the trial court declared Roxas in default.
The order of default was, however, lifted upon motion of Roxas. On 22 August 1988, Roxas filed a
motion to dismiss. After a hearing, wherein testimonial and documentary evidence were presented by
both parties, the trial court in an Order dated 8 February 1991 denied Roxas' motion to dismiss. After
receiving said order, Roxas filed another motion for extension of time to submit his answer. He also filed
a motion for reconsideration, which the trial court denied in its Order dated 10 April 1991 for being proforma. Roxas was again declared in default, on the ground that his motion for reconsideration did not toll
the running of the period to file his answer. On 3 May 1991, Roxas filed an unverified Motion to Lift the
Order of Default which was not accompanied with the required affidavit of merit. But without waiting for
the resolution of the motion, he filed a petition for certiorari with the Court of Appeals.
The Court of Appeals dismissal of the complaint on the ground of improper venue. In holding that
the venue was improperly laid in Cebu City, the Court of Appeals relied on the address of YASCO, as
appearing in the Deed of Sale dated October 28, 1987, which is "No. 1708 Dominga Street, Pasay City."
This was the same address written in YASCO's letters and several commercial documents in the
possession of Roxas A subsequent motion for reconsideration by YASCO was to no avail. YASCO and
Garcia filed the petition.
Issue: WON the venue for the case against YASCO and Garcia in Cebu City was improperly laid?
Ruling: A corporation has no residence in the same sense in which this term is applied to a natural person.
But for practical purposes, a corporation is in a metaphysical sense a resident of the place where its
principal office is located as stated in the articles of incorporation. The Corporation Code precisely
requires each corporation to specify in its articles of incorporation the "place where the principal office of
the corporation is to be located which must be within the Philippines." The purpose of this requirement is

to fix the residence of a corporation in a definite place, instead of allowing it to be ambulatory. Actions
cannot be filed against a corporation in any place where the corporation maintains its branch offices.
The Court ruled that to allow an action to be instituted in any place where the corporation has branch
offices, would create confusion and work untold inconvenience to said entity. By the same token, a
corporation cannot be allowed to file personal actions in a place other than its principal place of business
unless such a place is also the residence of a co-plaintiff or a defendant. With the finding that the
residence of YASCO for purposes of venue is in Cebu City, where its principal place of business is
located, it becomes unnecessary to decide whether Garcia is also a resident of Cebu City and whether
Roxas was in estoppel from questioning the choice of Cebu City as the venue. The decision of the Court
of Appeals was set aside.
6. Republic Planters vs Court of Appeals
FACTS: In 1979, World Garment Manufacturing (WGM), through its board authorized Shozo Yamaguchi
(president) and Fermin Canlas (treasurer) to obtain credit facilities from Republic Planters Bank (RPB).
For this, 9 promissory notes were executed. Each promissory note was uniformly written in the following
manner:
___________, after date, for value received, I/we, jointly and severally promise to pay to the ORDER of
the REPUBLIC PLANTERS BANK, at its office in Manila, Philippines, the sum of ___________
PESOS(.) Philippine Currency
Please credit proceeds of this note to:
________ Savings Account ______XX Current Account
No. 1372-00257-6 of WORLDWIDE GARMENT MFG. CORP.
Sgd. Shozo Yamaguchi
Sgd. Fermin Canlas
However, no payment was made to RPB and the latter sued (WGM) in February 1982. In December
1982, WGM changed its name to Pinch Manufacturing Corporation (PMC). The trial court ruled that
Canlas as well as the other signatory of the promissory note as solidarily liable for the amount stated
therein. Only Canlas appealed. He averred that he cannot be held liable solidarily because in signing the
promissory note, he did so within the scope and authority granted to him by the corporate board hence he
should not be liable. The Court of Appeals agreed with him and ruled that the change of name of WGM to
PMC extinguished the personality of WGM and hence so is its liability.
ISSUE: WON the change of name of WGM to PMC extinguished the personality of WGM and hence so
is its liability.
HELD: No. The change of name did not create a new corporation. Nor did it render PMC the successor of
WGM. There is still only one corporation to speak of here. It is the same corporation with a different
name, and its character is in no respect changed. A change in the corporate name does not make a new
corporation, and whether effected by special act or under a general law, has no affect on the identity of the
corporation, or on its property, rights, or liabilities. The corporation continues, as before, responsible in its
new name for all debts or other liabilities which it had previously contracted or incurred.
Anent the issue of the liability of Canlas as treasurer of WGM, it is true that as a general rule,
officers or directors under the old corporate name bear no personal liability for acts done or contracts
entered into by officers of the corporation, if duly authorized. However, under the Negotiable Instruments
Law, agents who sign a promissory note without indicating their capacity as such and without disclosing
their principal shall be held personally liable to the promissory note. No parol evidence shall be admitted
to prove the agency. In this case, Canlas signed the promissorny note without indicating that he did so as
agent or treasurer of WGM, hence, he is personally liable pursuant to the Negotiable Instruments Law.

7. LYCEUM OF THE PHILS. V. CA

FACTS:
1. Petitioner had sometime commenced before in the SEC a complaint against Lyceum of Baguio, to
require it to change its corporate name and to adopt another name not similar or identical with that of
petitioner. SEC decided in favor of petitioner. Lyceum of Baguio filed petition for certiorari but was
denied
for
lack of merit.
2. Armed with the resolution of the Court, petitioner instituted before the SEC to compel private
respondents, which are also educational institutions, to delete word Lyceum from their corporate names
and permanently to enjoin them from using such as part of their respective names.
3. Hearing officer sustained the claim of petitioner and held that the word Lyceum was capable of
appropriation and that petitioner had acquired an enforceable right to the use of that word.
4. In an appeal, the decision was reversed by the SEC En Banc. They held that the word Lyceum to
have become identified with petitioner as to render use thereof of other institutions as productive of
consfusion about the identity of the schools concerned in the mind of the general public.
5. Petitioner went to appeal with the CA but the latter just affirmed the decision of the SEC En Banc.
HELD:
Under the corporation code, no corporate name may be allowed by the SEC 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 laws. The policy
behind this provision is to avoid fraud upon the public, which would have the occasion to deal with the
entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties of
administration and supervision over corporations.
The corporate names of private respondents are not identical or deceptively or confusingly similar to that
of petitioners. Confusion and deception has been precluded by the appending of geographic names to the
word Lyceum. Furthermore, the word Lyceum has become associated in time with schools and other
institutions providing public lectures, concerts, and public discussions. Thus, it generally refers to a
school or an institution of learning.
Petitioner claims that the word has acquired a secondary meaning in relation to petitioner with the result
that the word, although originally generic, has become appropriable by petitioner to the exclusion of other
institutions.
The doctrine of secondary meaning is a principle used in trademark law but has been extended to
corporate names since the right to use a corporate name to the exclusion of others is based upon the same
principle, which underlies the right to use a particular trademark or tradename. Under this doctrine, a
word or phrase originally incapable of exclusive appropriation with reference to an article in the market,
because geographical or otherwise descriptive might nevertheless have been used for so long and so
exclusively by one producer with reference to this article that, in that trade and to that group of
purchasing public, the word or phrase has come to mean that the article was his produce. The doctrine
cannot be made to apply where the evidence didn't prove that the business has continued for so long a
time that it has become of consequence and acquired good will of considerable value such that its articles
and produce have acquired a well known reputation, and confusion will result by the use of the disputed
name.
Petitioner didn't present evidence, which provided that the word Lyceum acquired secondary meaning.
The petitioner failed to adduce evidence that it had exclusive use of the word. Even if petitioner used the
word for a long period of time, it hadnt acquired any secondary meaning in its favor because the
appellant failed to prove that it had been using the same word all by itself to the exclusion of others.
8. Lozano vs. De los Santos

FACTS: Upon the request of the Sangguniang Bayan of Mabalacat, Pampanga, Lozano and Anda agreed
to consolidate their respective associations and form the Unified Mabalacat-Angeles Jeepney Operators
and Drivers Association, Inc. (UMAJODA); petitioner and private respondent also agreed to elect one set
of officers who shall be given the sole authority to collect the daily dues from the members of the
consolidated association; elections were held and both petitioner and private respondent ran for president;
petitioner won; private respondent protested and, alleging fraud, refused to recognize the results of the
election; private respondent also refused to abide by their agreement and continued collecting the dues
from the members of his association despite several demands to desist. Petitioner was thus constrained to
file the complaint to restrain private respondent from collecting the dues and to order him to pay damages
in the amount of P25,000.00and attorneys fees of P500.00.
Private respondent moved to dismiss the complaint for lack of jurisdiction, claiming that
jurisdiction was lodged with the Securities and Exchange Commission (SEC).
ISSUE: WON the SEC has the jurisdiction in case at bar.
Held: No. The jurisdiction of the Securities and Exchange Commission is determined by a concurrence of
two elements: (1) the status or relationship of the parties; and (2) the nature of the question that is the
subject of their controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership
relations between and among stockholders, members, or associates. The second element requires that the
dispute among the parties be intrinsically connected with the regulation of the corporation, partnership or
association or deal with the internal affairs of the corporation, partnership or association.
In this case, there is no intra-corporate nor partnership relation between petitioner and private
respondent. The unified association was, however, still a proposal. It had not been approved by the SEC,
neither had its officers and members submitted their articles of consolidation in accordance with Sections
78 and 79 of the Corporation Code. Moreover, there is no estoppel as there is no third person involved.
9. Lim Tong Lim vs Philippine Fishing Gear Industries, Inc.
FACTS: It was established that Lim Tong Lim requested Peter Yao to engage in commercial fishing with
him and one Antonio Chua. The three agreed to purchase two fishing boats but since they do not have the
money they borrowed from one Jesus Lim (brother of Lim Tong Lim). They again borrowed money and
they agreed to purchase fishing nets and other fishing equipments. Now, Yao and Chua represented
themselves as acting in behalf of Ocean Quest Fishing Corporation (OQFC) they contracted with
Philippine Fishing Gear Industries (PFGI) for the purchase of fishing nets amounting to more than P500k.
They were however unable to pay PFGI and so they were sued in their own names because apparently
OQFC is a non-existent corporation. Chua admitted liability and asked for some time to pay. Yao waived
his rights. Lim Tong Lim however argued that hes not liable because he was not aware that Chua and Yao
represented themselves as a corporation; that the two acted without his knowledge and consent.
ISSUE: Whether or not Lim Tong Lim is liable.
HELD: Yes. From the factual findings of both lower courts, it is clear that Chua, Yao and Lim had
decided to engage in a fishing business, which they started by buying boats worth P3.35 million, financed
by a loan secured from Jesus Lim. In their Compromise Agreement, they subsequently revealed their
intention to pay the loan with the proceeds of the sale of the boats, and to divide equally among them the
excess or loss. These boats, the purchase and the repair of which were financed with borrowed money, fell
under the term common fund under Article 1767. The contribution to such fund need not be cash or
fixed assets; it could be an intangible like credit or industry. That the parties agreed that any loss or profit
from the sale and operation of the boats would be divided equally among them also shows that they had
indeed formed a partnership.

Lim Tong Lim cannot argue that the principle of corporation by estoppels can only be imputed to Yao and
Chua. Unquestionably, Lim Tong Lim benefited from the use of the nets found in his boats, the boat
which has earlier been proven to be an asset of the partnership. Lim, Chua and Yao decided to form a
corporation. Although it was never legally formed for unknown reasons, this fact alone does not preclude
the liabilities of the three as contracting parties in representation of it. Clearly, under the law on estoppel,
those acting on behalf of a corporation and those benefited by it, knowing it to be without valid existence,
are held liable as general partners.
10. Albert vs University Publishing
FACTS: 15 years ago, Mariano Albert entered into a contract with University Publishing Co., Inc. through
Jose M. Aruego, its President, whereby University would pay plaintiff for the exclusive right to publish
his revised Commentaries on the Revised Penal Code. The contract stipulated that failure to pay one
installment would render the rest of the payments due. When University failed to pay the second
installment, Albert sued for collection and won.
However, upon execution, it was found that the records of this Commission do not show the
registration of UNIVERSITY PUBLISHING CO., INC., either as a corporation or partnership. Albert
petitioned for a writ of execution against Jose M. Aruego as the real defendant. University opposed, on
the ground that Aruego was not a party to the case.
Issue: WON the University Publishing Co., Inc. an existing corporation with an independent juridical
personality.
Held: No. On account of the non-registration it cannot be considered a corporation, not even a corporation
de facto. It has therefore no personality separate from Jose M. Aruego; it cannot be sued independently.
In the case at bar, Aruego represented a non-existent entity and induced not only Albert but the
court to believe in such representation. He signed the contract as "President" of "University Publishing
Co., Inc.," stating that this was "a corporation duly organized and existing under the laws of the
Philippines".
"A person acting or purporting to act on behalf of a corporation which has no valid existence assumes
such privileges and obligations and becomes personally liable for contracts entered into or for other acts
performed as such agent." Aruego, acting as representative of such non-existent principal, was the real
party to the contract sued upon, and thus assumed such privileges and obligations and became personally
liable for the contract entered into or for other acts performed as such agent.