G.R. No. 122174. October 3, 2002.

INDUSTRIALREFRACTORIESCORPORATION OF THEPHILIPPINES, petitioner

, vs. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION
and REFRACTORIESCORPORATION OF THEPHILIPPINES, respondents.

Appeals; Pleadings and Practice; It must be noted that at the time the SEC En Banc
rendered its decision on May 10, 1994, the governing rule on appeals from quasi-judicial
agencies like the SEC was Supreme Court Circular No. 1-91.—Petitioner contends that the
petition before the Court of Appeals was timely filed. It must be noted that at the time the
SEC En Banc rendered its decision on May 10, 1994, the governing rule on appeals from
quasi-judicial agencies like the SEC was Supreme Court Circular No. 1-91. As provided
therein, the remedy should have been a petition for review filed before the Court of Appeals
within fifteen (15) days from notice, raising questions of fact, of law, or mixed questions of
fact and law. A motion for reconsideration suspends the running of the period.
Same; Same; Official records of SEC officials as to the dates of receipt and filing of papers
enjoy the presumption of regularity.—If reckoned from the dates supplied by petitioner, then
the petition was timely filed. On the other hand, if reckoned from the dates provided by
respondent RCP, then it was filed way beyond the reglementary period. On this score, we
agree with the appellate court’s finding that petitioner failed to rebut respondent RCP’s
allegations of material dates of receipt and filing. In addition, the certifications were executed
by the SEC officials based on their official records which enjoy the presumption of regularity.
As such, these are prima facieevidence of the facts stated therein. And based on such dates,
there is no question that the petition was filed with the Court of Appeals beyond the fifteen
(15) day period. On this ground alone, the instant petition should be denied as the SEC En
Banc’s decision had already attained finality and the SEC’s findings of fact, when supported
by substantial evidence, is final.
Securities and Exchange Commission; Jurisdiction; Scope; Jurisdiction of the SEC is not
merely confined to the adjudicative functions provided in Section 5 of P.D. 902-A, as
amended.—Petitioner’s argument on the SEC’s jurisdiction over the case is utterly myopic.
The jurisdiction of the SEC is not merely confined to the adjudicative functions provided in
Section 5 of P.D. 902-A, as amended. By express mandate, it has absolute jurisdiction,
supervision and control over all corporations. It also exercises regulatory and administrative
powers to implement and enforce the Corporation Code, one of which is Section 18, which
provides: “SEC. 18. Corporate name.—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 laws. When a change in the corporate
name is approved, the Commission shall issue an amended certificate of incorporation under
the amended name.” It is the SEC’s duty to prevent confusion in the use of corporate names
not only for the protection of the corporations involved but more so for the protection of the
public, and it has authority to de-register at all times and under all circumstances corporate
names which in its estimation are likely to generate confusion. Clearly therefore, the present
case falls within the ambit of the SEC’s regulatory powers.
Same; Same; Same; Confusing and deceptive similarity of corporate names prohibited
under Section 18 of the Corporation Code.—Likewise untenable is petitioner’s argument that

1
there is no confusing or deceptive similarity between petitioner and respondent RCP’s
corporate names. Section 18 of the Corporation Code expressly prohibits the use of a
corporate name which 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 the foregoing prohibition is to avoid fraud
upon the public that will have occasion to deal with the entity concerned, the evasion of legal
obligations and duties, and the reduction of difficulties of administration and supervision
over corporation. Pursuant thereto, the Revised Guidelines in the Approval of Corporate and
Partnership Names specifically requires that: (1) a corporate name shall not be identical,
misleading or confusingly similar to one already registered by another corporation with the
Commission; and (2) if the proposed name is similar to the name of a registered firm, the
proposed name must contain at least one distinctive word different from the name of the
company already registered.
Same; Same; Same; Requisites to fall within the prohibition of the law.—As held
in Philips Export B.V. vs. Court of Appeals,to fall within the prohibition of the law, two
requisites must be proven, to wit: (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.

Same; Same; Same; First Requisite of Priority of Adoption.—As regards the first
requisite, it has been held that the right to the exclusive use of a corporate name with freedom
from infringement by similarity is determined by priority of adoption. In this case,
respondent RCP was incorporated on October 13, 1976 and since then has been using the
corporate name “Refractories Corp. of the Philippines”. Meanwhile, petitioner was
incorporated on August 23, 1979 originally under the name “Synclaire Manufacturing
Corporation”. It only started using the name “Industrial Refractories Corp. of the
Philippines” when it amended its Articles of Incorporation on August 23, 1985, or nine (9)
years after respondent RCP started using its name. Thus, being the prior registrant,
respondent RCP has acquired the right to use the word “Refractories” as part of its corporate
name.
Same; Same; Same; Second Requisite.—Anent the second requisite, in determining the
existence of confusing similarity in corporate names, the test is whether the similarity is such
as to mislead a person using ordinary care and discrimination and the Court must look to the
record as well as the names themselves. Petitioner’s corporate name is “Industrial
Refractories Corp. of the Phils.”, while respondent’s is “Refractories Corp. of the Phils.”
Obviously, both names contain the identical words “Refractories”, “Corporation” and
“Philippines”. The only word that distinguishes petitioner from respondent RCP is the word
“Industrial” which merely identifies a corporation’s general field of activities or operations.
We need not linger on these two corporate names to conclude that they are patently similar
that even with reasonable care and observation, confusion might arise.
Attorney’s Fees; Award of attorney’s fees found fair and reasonable when its claimant is
compelled to litigate with third persons or to incur expenses to protect its just and valid
claim.—We find the award of P50,000.00 as attorney’s fees to be fair and reasonable. Article
2208 of the Civil Code allows the award of such fees when its claimant is compelled to litigate
with third persons or to incur expenses to protect its just and valid claim. In this case, despite
its undertaking to change its corporate name in case another firm has acquired a prior right
to use such name, it refused to do so, thus compelling respondent to undergo litigation and
incur expenses to protect its corporate name.

2
PETITION for review on certiorari of a decision ofthe Court of Appeals.

The facts are stated in theopinion of the Court.

AUSTRIA-MARTINEZ, J.:

Filed before us is a petition for review on certiorariunder Rule

45 of the Rules of Court assailing theDecision of the Court ofAppeals in CA-
G.R. SP No. 35056, denying due course and dismissing the petition filed
by IndustrialRefractories Corp. of thePhilippines (IRCP).
Respondent RefractoriesCorporation of thePhilippines (RCP) is
a corporation duly organized on October 13, 1976 for thepurpose of engaging
in thebusiness of manufacturing, producing, selling, exporting and otherwise
dealing in any and all refractory bricks, its by-products and derivatives. On June 22,
1977, it registered its corporate and business name with theBureau of Domestic
Trade.
Petitioner IRCP on theother hand, was incorporated on August 23, 1979
originally under thename “Synclaire Manufacturing Corporation”. It amended its
Articles of Incorporation on August 23, 1985 to change its corporate name to
“Industrial RefractoriesCorp. of the Philippines”. It is engaged
in the business of manufacturing all kinds of ceramics and other products, except
paints and zincs.
Both companies are theonly local suppliers ofmonolithic gunning mix. 1

Discovering that petitioner was using such corporate name, respondent RCP
filed on April 14, 1988 with the Securities and Exchange Commission (SEC) a
petition to compel petitioner to change its corporate name on theground that its
corporate name is confusingly similar with that of petitioner’s such that the public
may be confused or deceived into believing that they are one
and the same corporation. 2

The SEC decided in favor of respondent RCP and rendered judgment on July 23,
1993 with the following dispositive portion:

“WHEREFORE, judgment is hereby rendered in favor ofthe petitioner and

against therespondent declaring thelatter’s corporate name
‘Industrial RefractoriesCorporation of thePhilippines’ as deceptively and confusingly
similar to that ofpetitioner’s corporate name
‘Refractories Corporation ofthe Philippines’. Accordingly, respondent is hereby
directed to amend its Articles ofIncorporation by deleting thename
‘RefractoriesCorporation of thePhilippines’ in its corporate name within thirty (30)
days from finality of this Decision. Likewise, respondent is hereby ordered to
pay the petitionerthe sum of P50,000.00 as attorney’s fees.”
3

3
Petitioner appealed to theSEC En Banc, arguing that it does not have any
jurisdiction over the case, and that respondent RCP has no right to the exclusive
use of its corporate name as it is composed of generic or common words. 4

In its Decision dated July 23, 1993, the SEC En Bancmodified the appealed
decision in that petitionerwas ordered to delete or drop from its corporate name
only the word “Refractories”. 5

Petitioner IRCP elevated the decision of the SEC En Banc through a petition
for review on certiorari to theCourt of Appeals which then rendered the herein
assailed decision. Theappellate court upheld thejurisdiction of the SEC
over the case and ruled that thecorporate names ofpetitioner IRCP and
respondent RCP are confusingly or deceptively similar, and that respondent RCP has
established its prior right to use the word “Refractories” as its corporate
name. Theappellate court also
6 found that the petition was filed
beyond the reglementary period. 7

Hence, herein petition which we must deny.

Petitioner contends that the petition before theCourt of Appeals was timely
filed. It must be noted that at the time theSEC En Banc rendered its decision on
May 10, 1994, the governing rule on appeals from quasi-judicial agencies
like the SEC was Supreme Court Circular No. 1-91. As provided
therein, the remedy should have been a petition for review filed
before the Court ofAppeals within fifteen (15) days from notice, raising
questions of fact, of law, or mixed questions offact and law. A motion for
8

reconsideration suspends the running of the period. 9

In the case at bench, there is a discrepancy between the dates provided

by petitioner and respondent. Petitioner alleges thefollowing dates of receipt and
filing:
10

June 10, Receipt of SEC’s Decision dated

1994 May 10, 1994
June 20, Filing of Motion for Reconsideration
1994
September Receipt of SEC’s Order dated
1, 1994 August 3, 1994 denying petitioner’s
motion for reconsideration
September Filing of Motion for extension of
2, 1994 time
September Filing of Petition
6, 1994

Respondent RCP, however, asserts that the foregoing dates are incorrect
as thecertifications issued by theSEC show that petitionerreceived the SEC’s
Decision dated May 10, 1994 on June 9, 1994, filed the motion for reconsideration via

4
registered mail on June 25, 1994, and received theOrder dated August 3, 1994 on
August 15, 1994. Thus, the petition was filed twenty-one (21) days
11

beyond the reglementary period provided in Supreme Court Circular No. 1-91. 12

If reckoned from the dates supplied by petitioner, then the petition was timely
filed. On the other hand, if reckoned from the dates provided by respondent RCP,
then it was filed way beyond the reglementary period. On this score, we agree
with the appellate court’s finding that petitioner failed to rebut respondent RCP’s
allegations of material dates of receipt and filing. In addition, the certifications
13

were executed by the SEC officials based on their official records which 14

enjoy the presumption ofregularity. As 15 such, these are prima

facie evidence of thefacts stated therein. And based on such dates, there is no
16

question that thepetition was filed with theCourt of Appeals beyond the fifteen
(15) day period. On this ground alone, theinstant petition should be denied
as the SEC En Banc’sdecision had already attained finality and theSEC’s
findings of fact, when supported by substantial evidence, is final. 17

Nevertheless, to set thematters at rest, we shall delve into the other issues posed
by petitioner.
Petitioner’s arguments, substantially, are as follows: (1) jurisdiction is vested
with the regular courts as the present case is not one of the instances provided in
P.D. 902-A; (2) respondent RCP is not entitled to use thegeneric name
“refractories”; (3) there is no confusing similarity between their corporate names;
and (4) there is no basis for the award ofattorney’s fees. 18

Petitioner’s argument on the SEC’s jurisdiction over the case is utterly

myopic. The jurisdiction of the SEC is not merely confined to the adjudicative
functions provided in Section 5 of P.D. 902-A, as amended. By express mandate, it
19

has absolute jurisdiction, supervision and control over all corporations. It also20

exercises regulatory and administrative powers to implement and

enforce the Corporation Code, one of which is Section 18,which provides:
21

“SEC. 18. Corporate name.—No corporate name may be allowed by the Securities and
Exchange Commission if theproposed 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. When a change in the corporate
name is approved, the Commission shall issue an amended certificate of incorporation
under the amended name.”

It is the SEC’s duty to prevent confusion in theuse of corporate names not only
for the protection ofthe corporations involved but more so
for theprotection of the public, and it has authority to deregister at all times and
under all circumstances corporate names which in its estimation are likely to
generate confusion. Clearly
22 therefore, the present case falls
within the ambit of theSEC’s regulatory powers. 23

Likewise untenable is petitioner’s argument that there is no confusing or

deceptive similarity between petitioner and respondent RCP’s corporate
names. Section 18 of theCorporation Codeexpressly prohibits the use of a

5
corporate name which is “identical or deceptively or confusingly similar to that ofany
existing corporation or to any other name already protected by law or is patently
deceptive, confusing or contrary to existing laws.”The policy behind theforegoing
prohibition is to avoid fraud upon the public that will have occasion to deal
with the entity concerned, the evasion oflegal obligations and duties,
and the reduction ofdifficulties ofadministration and supervision
over corporation. 24

Pursuant thereto, theRevised Guidelines in theApproval of Corporate and

Partnership Names specifically requires that: (1) a corporate name shall not be
25

identical, misleading or confusingly similar to one already registered by

another corporation with the Commission; and (2) if the proposed name is similar
26

to the name of a registered firm, theproposed name must contain at least one
distinctive word different from the name of thecompany already registered. 27

As held in Philips Export B.V. vs. Court of Appeals, to 28 fall

within the prohibition of the law, two requisites must be proven, to wit:

1. (1)that the complainant corporation acquired a prior right over the use of such
corporate name;

and

2. (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.

As regards the first requisite, it has been held that the right to theexclusive use of a
corporate name with freedom from infringement by similarity is determined
by priority ofadoption. In this case, respondent RCP was incorporated on October
29

13, 1976 and since then has been using the corporate name
“Refractories Corp. of the Philippines”. Meanwhile, petitioner was
incorporated on August 23, 1979 originally under thename “Synclaire
Manufacturing Corporation”. It only started using the name
“Industrial RefractoriesCorp. of the Philippines” when it amended its
Articles of Incorporation on August 23, 1985, or nine (9) years after respondent RCP
started using its name. Thus, being the prior registrant, respondent RCP has
acquired the right to use the word “Refractories” as part of its corporate name.
Anent the second requisite, in determining the existence of confusing similarity
in corporate names, the test is whether the similarity is such as to mislead a person
using ordinary care and discrimination and theCourt must look to therecord as well
as the names themselves. Petitioner’s
30 corporate name is
“Industrial RefractoriesCorp. of the Phils.”, while respondent’s is
“Refractories Corp. of thePhils.” Obviously, both names contain the identical
words “Refractories”, “Corporation” and “Philippines”. The only word that
distinguishes petitioner from respondent RCP is the word “Industrial” which

6
merely identifies a corporation’s general field of activities or operations. We need
not linger on these two corporate names to conclude that they are patently similar
that even with reasonable care and observation, confusion might arise. It must be
31

noted that both cater to thesame clientele, i.e.,the steel industry. In fact, the SEC
found that there were instances when different steel companies were actually
confused between the two, especially since they also have similar product
packaging. Such findings are accorded not only great respect but even finality, and
32

are binding upon this Court, unless it is shown that it had arbitrarily disregarded or
misapprehended evidence before it to such an extent as to compel a contrary
conclusion had such evidence been properly appreciated. And even without such
33

proof of actual confusion between the two corporate names, it suffices that confusion
is probable or likely to occur.
34

Refractory materials are described as follows:

“Refractories are structural materials used at high temperatures to

[sic] industrial furnaces. They are supplied mainly in the form ofbrick of standard sizes
and ofspecial shapes. Refractoriesalso include refractory cements, bonding mortars, plastic
firebrick, castables, ramming mixtures, and other bulk materials such as dead-burned grain
magneside, chrome or ground ganister and special clay.”35

While the word “refractories” is a generic term, its usage is not widespread and is
limited merely to the industry/trade in which it is used, and its continuous use by
respondent RCP for a considerable period has made theterm so closely identified with
it. Moreover, as held in the case of Ang Kaanib sa Iglesia ng Dios kay Kristo Hesus,
36

H.S.K. sa Bansang Pilipinas, Inc. vs. Iglesia ng Dios kay Cristo Jesus, Haligi at
Suhay ng Katotohanan,petitioner’s appropriation of respondent’s corporate name
cannot find justification under thegeneric word rule. A contrary ruling would
37

encourage other corporations to adopt verbatim and register an existing and

protected corporate name, to thedetriment of the public. 38

Finally, we find the award of P50,000.00 as attorney’s fees to be fair and

reasonable. Article 2208 ofthe Civil Code allows theaward of such fees when its
claimant is compelled to litigate with third persons or to incur expenses to protect its
just and valid claim. In this case, despite its undertaking to change its corporate name
in case another firm has acquired a prior right to use such name, it refused to do so,
39

thus compelling respondent to undergo litigation and incur expenses to protect its
corporate name.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for
lack of merit.
Costs against petitioner.
SO ORDERED.

Bellosillo (Actg. C.J., Chairman), Quisumbing and Callejo, Sr., JJ., concur.
Mendoza, J., On official leave.

Petition denied.

7
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