In the Matter of Valdes Consultants, Inc.

[SEC-AC NO. 304. No date supplied.] IN THE MATTER OF VALDES CONSULTANTS, INC. D E C I S I O N This is a Petition for Review and/or Appeal from the Resolution of the Hearing Officers Roy Allan V. Magturo and Villamin P. Lam of this Commission's Prosecution and Enforcement Department (PED) dated June 20, 1990 dismissing the Complaint of Carlos J. Valdes & Co. (CJVC for brevity) for lack of merit. The following facts are not controverted: On September 4, 1989, Valdes Consultants, Inc. (VCI for brevity) was duly incorporated before this Commission with SEC Reg. No. 167868. Three days later, CJVC objected to the use of the name "Valdes Consultants, Inc." by the respondent a quo on the allegation that it is confusingly similar to CJVC. On September 11, 1989, Director Fe Eloisa C. Gloria of the Corporate and Legal Department (CLD) directed VCI thru a letter-instruction to amend its Articles of Incorporation within thirty (30) days from receipt thereof or she will have to forward VCI's Articles to the PED for appropriate action. On October 2, 1989, VCI filed a letter-opposition to the Orders of CLD. On November 8, 1989, the PED directed CJVC to file/submit a reply/comment to the letter of VCI which CJVC complied with on February 8, 1990. In its Complaint, CJVC alleged that for VCI to procure its certificate of registration, it executed an undertaking "to change its corporate name in the event Carlos J. Valdes & Co. or another person, firm or entity has acquired a prior right to the use of the firm name or one deceptively or confusingly similar to it." (Letter undertaking executed by VCI on August 24, 1989) CJVC also avers that VCI has intentionally used the name "Valdes" to confuse the public that it has a business relationship with the former or is a part of the same Valdes group. Finally, CJVC proposed "Antonio A.S." be prefixed to respondent's corporate name to make it read "Antonio A.S. Valdes Consultants, Inc." to distinguish it from complainant-petitioner and to avoid confusion in the public mind. After due hearing, the hearing panel disposed of the case in favor of VCI. Hence this appeal. In the proceeding before us, herein petitioner raised two issues, to wit: 1. Whether or not the firm name "Valdes Consultants, Inc." is confusingly similar to "Carlos J. Valdes & Co." and 2. Whether or not VCI has renege in its undertaking to change its corporate name to the SEC. Anent the first issue, We sustain VCI's contention that the firm name "Valdes Consultants, Inc." is not confusingly similar to the name of herein petitioner. The hearing panel has correctly observed: . . . that of equal prominence in the firm name of CJVC is "Carlos J" which is the first name and middle initial of the founder and senior partner of the complainant firm and further, the presence of the word "Consultants" in the name of VCI. Under such circumstances, the firm names of CJVC and VCI are distinct from each other and as it was held that a corporate name is sufficiently distinguishing if a word describing the first name . . . or initials . . . or line of business . . . is added to the famous name. In their Rejoinder to Reply/Comment on the Petition for Review and/or Appeal, herein petitioner has emphasized that it is not questioning the use of the name Valdes by respondent and recognizes that the same, being the surname of the majority stockholder of VCI, is not capable of exclusive appropriation. All it asks, therefore, is that the name "Antonio A.S.", be affixed to respondent's name. In support hereof, petitioner allege that the right of a corporation to use in its name the name of an individual is not absolute and cannot be left unregulated and that a corporation could not adopt the name of an individual where it appeared that the use of such name would lead to confusion, deceive the public or defraud others operating a business under the same name, even though the name was taken from the names of principal stockholders, proprietors or incorporators. We are of one mind that with or without the name "Antonio A.S. prefixed to the respondent's name, confusion and deception to the public is rather remote. One has only to bear in mind that CJVC and VCI cater to a small and highly specialized clientele who are capable of close discrimination. Hence, to insist on confusion is undermining the capability of their clients who, We believe, are discerning enough in choosing professional firms to assist them in their business. The hearing panel has quoted, as we too quote, Fletcher that "where a business offers its services only to a small highly specialized group capable of close discrimination, a greater degree of similarity will be tolerated than where the business offers itself generally to all comers" (6 Fletcher 117). With the conclusion thus reached, We need not discuss the second issue involved in this petition. WHEREFORE, premises considered, the instant Petition is hereby DENIED for lack of merit. (did not participate) ROSARIO N. LOPEZ Chairman (SGD.) GONZALO T. SANTOS, JR. (SGD.) RODOLFO L. SAMARISTA Associate Commissioner Associate Commissioner (SGD.) MERLE O. MANUEL (SGD.) ARMANDO Z. GONZALES Associate Commissioner Associate Commissioner