PHILIPPINE FIRST INSURANCE COMPANY, INC.

vs.
MARIA CARMEN HARTIGAN, CGH, and O. ENGKEE
G.R. No. L-26370
(July 31, 1970)

FACTS:
On June 1, 1953, plaintiff was originally named as 'The Yek Tong Lin Fire and Marine
Insurance Co., Ltd’ an insurance corp. duly presented with the Security and Exchange
Commissioner and before a Notary Public as provided in their articles of incorporation. Later
amended its articles of incorporation and changed its name on May 26, 1961 as ‘Philippine First
Insurance Co., Inc.’ pursuant to a certificate of the Board of Directors.
The complaint alleges that: Philippine First Insurance Co., Inc., doing business under the
name of 'The Yek Tong Lin Fire and Marine Insurance Co., Lt.' signed as co-maker together
with defendant Maria Carmen Hartigan, CGH, to which a promissory note was made in favour
of China Banking. Said defendant failed to pay in full despite renewal of such note. The
complaint ends with a prayer for judgment against the defendants, jointly and severally, for the
sum of P4,559.50 with interest at the rate of 12% per annum from November 23, 1961 plus
P911.90 by way of attorney's fees and costs.
Defendants admitted the execution of the indemnity agreement but they claim that they
signed said agreement in favor of the Yek Tong Lin Fire and Marine Insurance Co., Ltd.' and not
in favor of the plaintiff Philippine Insurance. They likewise admit that they failed to pay the
promissory note when it fell due but they allege that since their obligation with the China
Banking Corporation based on the promissory note still subsists, the surety who co-signed the
promissory note is not entitled to collect the value thereof from the defendants otherwise they
will be liable for double amount of their obligation, there being no allegation that the surety has
paid the obligation to the creditor. In their special defense, defendants claim that there is no
privity of contract between the plaintiff and the defendants and consequently, the plaintiff has
no cause of action against them, considering that the complaint does not allege that the plaintiff
and the 'Yek Tong Lin Fire and Marine Insurance Co., Ltd.' are one and the same or that the
plaintiff has acquired the rights of the latter.

ISSUE: May a Philippine corporation change its name and still retain its original personality and
individuality as such?

RULING: YES. As can be gleaned under Sections 6 and 18 of the Corporation Law, the name of
a corporation is peculiarly important as necessary to the very existence of a corporation. 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. There is nothing sacrosanct in a name
when it comes to artificial beings. The sentimental considerations which individuals attach to
their names are not present in corporations and partnerships. Of course, as in the case of an
individual, such change may not be made exclusively. by the corporation's own act. It has to
follow the procedure prescribed by law for the purpose; and this is what is important and
indispensably prescribed — strict adherence to such procedure.
A general power to alter or amend the charter of a corporation necessarily includes the
power to alter the name of the corporation. Hence, a mere change in the name of a
corporation, either by the legislature or by the corporators or stockholders under legislative
authority, does not, generally speaking, affect the identity of the corporation, nor in any way
affect the rights, privileges, or obligations previously acquired or incurred by it. Indeed, it has
been said that a change of name by a corporation has no more effect upon the identity of the
corporation than a change of name by a natural person has upon the identity of such person.
The corporation, upon such change in its name, is in no sense a new corporation, nor the
successor of the original one, but remains and continues to be the original corporation. It is the
same corporation with a different name, and its character is in no respect changed. ... (6
Fletcher, Cyclopedia of the Law of Private Corporations, 224-225, citing cases.)
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. To be effective, Section 18 of
the Corporation Law, earlier quoted, requires that "a copy of the articles of incorporation as
amended, duly certified to be correct by the president and the secretary of the corporation and
a majority of the board of directors or trustees, shall be filed with the Securities & Exchange
Commissioner", and it is only from the time of such filing, that "the corporation shall have the
same powers and it and the members and stockholders thereof shall thereafter be subject to
the same liabilities as if such amendment had been embraced in the original articles of
incorporation." It goes without saying then that appellant rightly acted in its old name when on
May 15, 1961, it entered into the indemnity agreement, Annex A, with the defendant-appellees;
for only after the filing of the amended articles of incorporation with the Securities & Exchange
Commission on May 26, 1961, did appellant legally acquire its new name; and it was perfectly
right for it to file the present case In that new name on December 6, 1961. Such is, but the
logical effect of the change of name of the corporation upon its actions.
Therefore, actions brought by a corporation after it has changed its name should be
brought under the new name although for the enforcement of rights existing at the time the
change was made. The change in the name of the corporation does not affect its right to bring
an action on a note given to the corporation under its former name.

ZUELLIG FREIGHT AND CARGO SYSTEMS v. NLRC and RONALDO SAN MIGUEL
G.R. No. 157900; July 15, 2013; Bersamin, J.

SUMMARY:
In June 1994, San Miguel et. al. were informed that Zuellig, then known as Zeta Brokerage Corp. would cease
operations and that San Miguel and other employees would be separated. San Miguel reluctantly accepted his
separation pay subject to the standing offer to be hired to his former position by Zuellig. However, San Miguel
was terminated, without valid cause and in violation of due process, 15 days after the acceptance. San Miguel
filed a complaint for ULP, illegal dismissal, non-payment of salaries and moral damages against Zuellig. He
contended that the amendments of the articles of incorporation of Zeta did not dissolve Zeta as they were for
the purpose of changing the corporate name, broadening of primary functions and increasing the capital
stock. LA found that Zuellig and Zeta are legally the same entity and that San Miguel had been illegally
dismissed. NLRC affirmed LA. CA likewise affirmed LA and NLRC. SC affirmed. SC ruled that Zeta and Zuellig
remained one and the same corporation. There being no just cause for termination and no compliance with
due process, Zuellig is guilty of illegal dismissal.

DOCTRINE:
The mere change in the corporate name is not considered under the law as the creation of a new corporation;
hence, the renamed corporation remains liable for the illegal dismissal of its employee separated under that
guise. Thus, the change of name did not give Zuellig the license to terminate employees of Zeta like San Miguel
without just or authorized cause. Despite its new name, was the mere continuation of Zeta's corporate being,
and still held the obligation to honor all of Zeta's obligations, one of which was to respect San Miguel's
security of tenure. The dismissal of San Miguel from employment on the pretext that petitioner, being a
different corporation, had no obligation to accept him as its employee, was illegal and ineffectual.

Zuellig Freight and Cargo Systems,

vs.
National Labor Relations Commission and Ronaldo V. San Miguel

G.R. No. 157900; July 22, 2013

Facts: This is a petition appealing the decision of CA, whereby it dismissed its petition for certiorari and
upheld the adverse decision of the NLRC finding San Miguel to have been illegally dismissed. San
Miguel, employed as checker/custom representative, brought a complaint for unfair labor practice, illegal
dismissal, non-payment of salaries and moral damages against petitioner, formerly known as Zeta
Brokerage Corporation (Zeta). He contended that amendments of the articles of incorporation of Zeta
were for the purpose of changing the corporate name, broadening the primary functions, and increasing
the capital stock; and that such amendments could not mean that Zeta had been thereby dissolved.
Petitioner countered that San Miguel’s termination from Zeta had been for a cause authorized by
the Labor Code; that its non-acceptance of him had not been by any means irregular or discriminatory;
that its predecessor-in-interest had complied with the requirements for termination due to the cessation
of business operations and that it had no obligation to employ San Miguel in the exercise of its valid
management prerogative.
NLRC and CA rendered its decision holding San Miguel to have been illegally dismissed ordering
Zuellig to pay San Miguel his back wages and Attorney’s fees equivalent to ten percent (10%) of the total
award.

Issue: Whether or not the awarding of attorney’s fees had basis in fact and in law.

Ruling: Yes, the court upheld the CA, NLRC and Labor Arbiter unanimous decision, where
the amendments of the articles of incorporation of Zeta to change the corporate name to Zuellig Freight
and Cargo Systems, Inc. did not produce the dissolution of the former as a corporation, therefore not
giving them the license to terminate employees without just or authorized cause and considering that that
San Miguel had been compelled to litigate and to incur expenses to protect his rights and interest entitles
him to recover attorney’s fees.

In Producers Bank of the Philippines v. Court of Appeals, the Court ruled that attorney’s fees could be
awarded to a party whom an unjustified act of the other party compelled to litigate or to incur expenses
to protect his interest.

HARRILL v. DAVIS et al.

Doctrine:

Parties who actively engage in business for profit under the name and
pretense of a corporation which they know neither exists nor has any
color of existence may not escape individual liability because
strangers are led by their pretense to con- tract with their pretended
entity as a corporation.

Color of legal organization as a corporation, such as a charter or the filing

of articles of incorporation under some law, and user of the supposed
corporate franchise in good faith, are indispensable to the existence of a de
facto corporation which will exempt from individual liability those who
actively conduct it.

Neither the execution of articles which are not filed, nor statements nor
beliefs of the promoters that they are a corporation, nor the treatment of
themselves by themselves and by those who deal with them as a
corporation, nor all these together, will exempt those who actively conduct
the business under the assumed name of such a nonexistent corporation
from individual liability for the debts they incur.

Facts:

The four defendants(Walter B. Mann, Frank Davis, Robert S. Davis, and

James G. Knight) agreed in April or June, 1902, to take specified shares in
a $10,000 enterprise for the purpose of building a cotton gin and carrying
on the business of buying, ginning, and selling cotton, and to organize a
corporation for this purpose. They transacted a business with the plaintiff
consisting of the purchase of lumber, materials, and labor for their buildings
and of dealing in cotton with it which amounted to several tens of
thousands of dollars, and they remained indebted to it over $5,000, of
which $4,700.
On September 3, 1902, three of the defendants met and signed articles of
incorporation as the "Coweta Cotton & Milling Company" and a declaration
of the purpose of the incorporation, which the statutes required to be
verified by the signers and to be filed with the clerk of the Court of Appeals
and with the clerk of the judicial district in which the contemplated
corporation was to do business. This declaration was verified by Mann on
November 10, 1902, and by Frank M. Davis on December 10, 1902, and it
was filed with the clerk of the Court of Appeals on December 22, 1902, and
was never filed elsewhere. Frank M. Davis, as general manager of the
investment company, treated the milling company as a corporation all the
time during which this indebtedness was contracted, and never charged
any of it to himself or his associates.

The Western Investment Company brought this action for a balance due It
upon an account for lumber and materials sold, cotton handled, and
services rendered to Walter B. Mann, Frank Davis, Robert S. Davis, and
James G. Knight, as partners doing business under the firm name the
"Coweta Cotton & Milling Company. The defendants denied the partnership
and their liability, and averred that the indebtedness in question was that of
the milling company and that that company was a corporation.

Issue/s:

Was there ‘colorable’ compliance enough to give the supposed corporation

at least the status of a ‘de facto’ corporation?

Held:

There was none.

The defendants cannot escape individual liability on the ground that the
Coweta Cotton & Milling Company was a corporation de facto when that
portion of the plaintiff's claim was incurred, because it then had no color of
incorporation, and they knew it and yet, actively used its name to incur the
obligation.

The general rule is that parties who associate themselves together and
actively engage in business for profit under any name are liable as partners
for the debts they incur under that name. It is an exception to this rule that
such associates may escape individual liability for such debts by a
compliance with incorporation laws or by a real attempt to comply with
them which gives the color of a legal corporation, and by the user of the
franchise of such a corporation in the honest belief that it is duly
incorporated. When the fact appears, as it does in the case at bar, by
indisputable evidence that parties associated and knowingly incurred
liabilities under a given name, the legal presumption is that they are
governed by the general rule, and the burden is upon them to prove that
they fall under some exception to it.

For the exception to apply, under the general law of Arkansas in force in
the Indian Territory, the filing of articles of incorporation with the clerk of the
Court of Appeals was a sine qua non of any color of a legal corporation.
Without that there was not, and there could not be, an apparent corporation
or the color of a corporation, Agreements to form one, statements that
there was one, signed articles of association to make one, acts as one,
created no color of incorporation, because there could be no incorporation
or color of it under the law until the articles were filed.

The defendants never became a corporation de facto prior to December

22, 1902, that they never became a corporation de jure, that the
indebtedness here in question was not incurred under any promise or
assurance of the defendants as promoters that it should become the
obligation of a corporation to be formed, that a large part of it was incurred
in the conduct of a general commercial business, and not to prepare for the
commencement of such a business or for the organization of a corporation