Cagayan De Oro Filipino-Chinese Chamber of Commerce and Industry, Inc., et al. vs. Stephen S. Gaisano, Jr., et al.

[SEC-SICD * CASE NO. 3105. December 24, 1987.] CAGAYAN DE ORO FILIPINO-CHINESE CHAMBER OF COMMERCE AND INDUSTRY, INC. AND TIRSO S. LIMBONHAI , petitioners , vs .STEPHEN S. GAISANO, JR.,ET AL. , respondents . D E C I S I O N The nature of the petition of Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. and Tirso S. Limbonhai, as culled from the allegations and prayers thereof, is for affirming the exclusive right of petitioner to use its corporate name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." to the exclusion of others; and pending consideration and resolution of the instant petition, a temporary restraining order be issued enjoining the respondents, their agents or whomsoever may act in their name and behalf from (1) using the name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." or represent to be acting for and on behalf of the petitioners organization in any of their dealings or relations with the general public; and (2) printing, publishing or otherwise utilizing the name of petitioner-organization in any of their transactions; and for other reliefs. prLL The essential allegations of the verified petition are that petitioner Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. is a duly organized and registered non-stock corporation composed of Filipino-Chinese businessmen, traders and merchants of Cagayan de Oro City with principal office at the 3rd Floor, CFCCC Building, Tiano Bros. St. cor. T. Chavez St.,Cagayan de Oro City, Misamis Oriental, Philippines; that petitioner Tirso Limbonhai, who has been a member since 1946 of the said Chamber, was elected President of the petitioner organization together with the other officials of the said, organization for the year 1986-1987 on January 21, 1986 and inducted into office on May 24, 1986 by the Federation Executive Vice President Yao Eng Hue, and again on July 6, 1986 by President Corazon C. Aquino; that petitioner organization known initially as Chinese Chamber of Commerce started as an informal aggrupation of Chinese businessmen, traders and merchants of Cagayan de Oro City even before the last Pacific War until August 8, 1978, when it was formally incorporated as a non-stock organization of Filipino-Chinese businessmen, traders and merchants under SEC Reg. No. 81234 and registered as "Cagayan de Oro Filipino-Chinese Chamber of Commerce, Inc.",later amended on August 6, 1986 to "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc.;that respondents, through Stephen Gaisano, Jr.,addressed two (2) letters to the Federation, the first dated July 18, 1986, informing the Federation of their alleged organization bearing the same and identical name of petitioner organization, "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." and induction of their officers by President Corazon C. Aquino on July 6, 1986, with the second letter, dated August 5, 1986, applying for membership in the Federation which has been politely rejected by the Federation, for obvious reasons, among others, that two Chamber of Commerce and Industry in one locality of the same name cannot be allowed; that respondents fraudulently and malevolently appropriated the name of the petitioners' organization by printing and distributing of invitations to an inauguration of their Association using the petitioners' organization's name last August 26, 1986; that respondents are aware of the fact that the name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc.",belongs exclusively to and is the rightful property of the petitioner organization and therefore, it cannot be used by any one and for any purpose without the consent of the original owner, and that petitioner-corporation has not authorized the respondents to use its name for any purpose whatsoever. Finding the verified petition to be sufficient in form and substance, and so as not to render ineffective and nugatory any judgment that may be rendered in this case, the Commission issued a restraining Order dated December 24, 1986, effective for a period of twenty (20) days from the issuance thereof, enjoining the respondents, their agents or whomsoever may act in their name and behalf from: (1) Using the name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." or represent to be acting for and in behalf of the petitioner organization in any of their dealings or relations with the general public; and, (2) Printing, publishing or otherwise utilizing the name of the petitioner organization in any of their transactions. After hearing the application for the issuance of the Writ of Preliminary Injunction, which started on January 12, 1987 and terminated on March 2, 1987, the Commission issued an Order dated April 13, 1987 granting the issuance of the Writ of Preliminary Injunction, enjoining the respondents, their agents or whomsoever may act in their name and behalf from: 1. Using the name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, or representing to be acting for and on behalf of the petitioner organization in any of their dealings or relations with the general public; and 2. Printing, publishing or otherwise utilizing the name of petitioner corporation in any of their transactions. On April 22, 1987, the Commission issued the Writ of Preliminary Injunction, after the petitioners posted a bond of TEN THOUSAND (P10,000.00) PESOS. On May 28, 1987, respondents filed a Motion for Reconsideration of the Order of April 13, 1987 and the same was denied by the Commission in its Order of August 20, 1987. During the preliminary conference hearing (Pre-trial) on September 14, 1987, the parties agreed and manifested to submit their case for decision on the basis of their evidences presented during the hearing for the issuance of the writ of preliminary injunction. cdll Respondents, in their Answer to the petition with an Opposition to the issuance of a writ of preliminary injunction filed on January 21, 1987, set forth, among other things that Tirso S. Limbonhai has not been elected President of the petitioner-corporation because his election was tainted with fraud and deceit, and perpetuated and entrenched himself as President of the petitioner corporation through high-handed and fraudulent means for his own benefit and personal gain and glory; that contrary to the claim of the petitioners, the reason why the Federation did not accept the application of the respondents for membership is to avoid dissension and ill-feelings among the members of the petitioner corporation; that respondents have been using the name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry as early as April, 1986 and as such it is petitioners who were impelled by selfish and devious motives and acting in evident bad faith, illegally annexed the word "Industry" to its appellation; that the demand of the petitioners for respondents to desist from using the disputed name is without any legal and factual basis considering that respondents have been using its own appellation for their association and have not used the legal name of the petitioner corporation, i.e.,Cagayan de Oro Filipino-Chinese Chamber of Commerce, Inc.;and that no irreparable injury will be caused unto the petitioners and that no relief is available to them by reason of respondents' use of the disputed name. Petitioners presented Tirso S. Limbonhai, as their witness, and adduced documentary exhibits, from Exhibits "A" to "U" with sub-markings. Stephen Gaisano, Jr. testified for the respondents and documentary evidence were, likewise, presented, from Exhibits "1" to "17" with submarkings. The only issue to be resolved in this case is whether or not respondents be allowed to use the name Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. considering the existence of the registered corporate name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." We regrettably find that the answer is in the negative. Petitioning Corporation was registered with the Commission on August 8, 1978 as Cagayan de Oro Filipino-Chinese Chamber of Commerce, Inc., composed of Filipino-Chinese businessmen, traders and merchants, with principal office at Cagayan de Oro City (Exhs. "A", "2" and "2-A"). On June 18, 1986, subject corporation decided to change its corporate name from "Cagayan de Oro Filipino-Chinese Chamber of Commerce, Inc. by adding the word "Industry" to make it "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc.", amending for this purpose its Articles of Incorporation, which was approved by the Commission on August 6, 1986 (Exhs. "B" and "1"). According to petitioners, this change of corporate name is necessary in order to conform to the name and style of the Federation of the Filipino-Chinese Chamber of Commerce and Industry, Inc., an umbrella Organization of all Filipino-Chinese Chamber of Commerce and Industry Association in the Philippines. On May 2, 1986, respondents executed an Articles of Incorporation bearing the Corporate name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. which up to date, is not registered with the Securities and Exchange Commission (Exh. "7"). This Association is composed also of Filipino-Chinese businessmen, traders and merchants, with principal office at Cagayan de Oro City. Some of them, particularly, the officers were members of the petitioning corporation. These two groups of Association elected their own set of officers for the year 1986-1987, with Tirso Limbonhai, as President of the petitioning corporation, and Stephen S. Gaisano, as President of the respondents' Association. Both officers of subject Associations were inducted into office on July 6, 1986 at two different places by Her Excellency, President Corazon C. Aquino; the Limbonhai group at the Museo de Oro, Xavier University and the Gaisano group at the Loyola House, also at Cagayan de Oro City. The existence of these two Associations with the same identical name "Cagayan de Oro Filipino Chinese Chamber of Commerce and Industry, Inc. (although the Gaisano's Association cannot necessarily affix the word, "Inc." for it is not registered with the Securities and Exchange Commission) have resulted in the claim of legitimacy or illegitimacy of one group against the other or vice versa, as shown in the publications of the different local newspapers of Cagayan de Oro City. This confusing set-up has also fragmented the business community of Cagayan de Oro City. The controversy was brought to the attention of the Federation of Filipino-Chinese Chamber of Commerce and Industry, Inc., the national association of Filipino-Chinese Chamber of Commerce and Industry all over the Philippines, for arbitration. Unfortunately, however, the Federation was not able to arbitrate the said controversy. dctai On August 20, 1986, petitioning corporation, through its President, Tirso Limbonhai, informed the Commission through a letter of even date, addressed to the Chairman, the existence of Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, which is a duplication of the petitioners' Corporate name (Cagayan de Oro Filipino Chinese Chamber of Commerce and Industry, Inc.) a corporation registered with the Commission, and requested the Commission to call the attention of this non-registered Association not to use the name of petitioning corporation in order not to confuse the minds of the public in Cagayan de Oro City. (Exh. "G") On August 22, 1986, the Commission through the Chairman, in response to the request of Mr. Limbonhai, wrote a letter to Mr. Stephen Gaisano, Jr.,informing him that the Commission does not allow two Associations to use the same name in order to avoid and preclude confusion in the minds of the public (Exh. "H"). The use by the respondents of the corporate name Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. should not be allowed because the proposed name is identically similar to petitioners' existing registered corporate name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." Thus, Section 18 of the Corporation Code of the Philippines provides: "SECTION 18. Corporate Name . No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or confusingly similar to that of any existing corporation or to 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" (Emphasis supplied) The mantle of protection covering a registered corporation provided under P.D. 902-A, the Corporation Code of the Philippines, as well as the Rules and Regulations of the Securities and Exchange Commission should be applied even against a corporation proposed to be registered with the Commission, otherwise, the protection given thereto will just be a myth. WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. That petitioners have the exclusive right to use its corporate name "Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc." to the exclusion of others; 2. That respondents, (Gaisano group) their agents, or whomsoever may act in their name and behalf are permanently enjoined from: A) Using the name Cagayan de Oro Filipino-Chinese Chamber of Commerce and Industry, Inc. or representing to be acting for and on behalf of the petitioners' organization in any of their dealings or relations with the general public, and B) Printing, publishing or otherwise utilizing the name of petitioner corporation in any of their transactions. LLjur 3. That respondents' counter-claim is DISMISSED, for lack of merit. No pronouncement as to costs. SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer