Pag-Iribang Bicolnon, Inc. vs. Confederation of Pag-Iribang Bicolnon, Inc.

[SEC-SICD * CASE NO. 3343. February 6, 1989.] PAG-IRIBANG BICOLNON, INC. , complainant , vs . CONFEDERATION OF PAG-IRIBANG BICOLNON, INC. , respondent . D E C I S I O N This refers to the petition filed by petitioners Pag-iribang Bicolnon Inc., against the respondent Confederation of Pag-iribang Bicolnon, Inc., to compel the latter to change its corporate name with prayer for a restraining order/writ of injunction alleging, among other things that petitioner corporation has a prior right to the use of the corporate name Pag-iribang Bicolnon and has already established a goodwill and reputation under the same name; that respondent corporation has thereby violated the said right of petitioner when the former registered its corporate name that is deceptively and confusingly similar to the corporate name of petitioner corporation; that last April 30, 1988, respondent scheduled an election of the members of the board, as well as its officers and which was advertised in the major dailies; that by its own publicity, respondent is not only violating petitioner's right to the corporate name but worse, causing petitioner irreparable damage and injury, by confusing if not deceiving Bicolanos to the effect that petitioner no longer exists or operates, and that petitioner is already part and parcel of respondent corporation. Hence, the prayer for the issuance of a restraining order/writ of injunction to enjoin the scheduled election. In answer thereto, respondent maintained that no one can claim exclusive right to the use of descriptive and ethnic words, especially if such words is a local translation of a word that is of universal usage, as the word "pag-iriba" which is the Bicol equivalent of the word "association" or what is called in Pilipino as "samahan"; that there was no right accruing to petitioner that has been violated by the respondent because, in the first place, there can be no exclusive right to the use of "Pag-iribang Bicolnon", and secondly, that respondent's corporate name is easily identifiable as different from the corporate name of the petitioner; that such being the case, petitioner cannot pretend to suffer any damage or injury whatsoever; that petitioner is not entitled to any relief, much less a temporary restraining order, for reasons already adduced in the preceding allegations; and that there is nothing in the allegations of the petition that the Board of Directors of the petitioner has ever passed a resolution authorizing the filing of the instant suit and as such, it now seeks the dismissal of the instant petition on the ground that the petition partakes the nature of a nuisance action. At the hearing conducted on the respondents' special affirmative defense on May 21, 1988, counsel for the petitioner, upon motion was given a period of fifteen (15) days from said date within to file his comment or opposition to the special affirmative defense. And on August 11, 1988, the undersigned Hearing Officer issued an order denying the respondents' special affirmative defense seeking the dismissal of the instant case. During the preliminary conference hearing held on August 26, 1988, respondent, upon motion of the petitioner and for failure to appear at the said preliminary conference, was considered as in default pursuant to the provision of Section 3, Rule VIII of the New Rules of Procedures in the Securities and Exchange Commission , and the reception of petitioner's evidence ex-parte was held on September 19, 1988, wherein petitioner presented three (3) witnesses. Proof adduced by petitioner consists of the testimonies of witnesses Domingo Gabitan, Teofisto Tijam and Salvador Dacer. Petitioner sought to establish through witness Gabitan that insofar as he and the other members are concerned, there exist so much confusion in the sense that when they affiliated with the petitioner they were led to believe that there is only one organization; and that the use by the respondent of the name Confederation of Pag-iribang Bicolnon, Inc., somehow created not only confusion but also chaos from among the members of the petitioner corporation. On the other hand, witness Teofisto Tijam testified that the use of the word or name Confederation of Pag-iribang Bicolnon and the name Pag-iribang Bicolnon, Inc., definitely will confuse anybody; that this is so because as far as Bicolanos are concerned there is only one Pag-iribang Bicolnon Association and whenever other association would address itself by prefixing the word Confederation or whatever it is, Bicolanos would always tend to refer to it as identical; that one proof of an actual case of confusion is when the respondent corporation announced that it was holding a party at the Army & Navy Club sometime last November 29, 1987; Bicolanos went there thinking that the affair was one organized by petitioner corporation, only to find out that it was an affair arranged by respondent corporation; and that in the convention held by respondent corporation, delegates; of petitioner corporation who came from as far as Mindanao and who attended the convention thinking that it was a convention called by the petitioner, got lost when they cannot find any of the officers of the latter. The main point at issue is whether or not respondent's corporate name is deceptively and confusingly similar to the corporate name of petitioner and whether or not petitioner has a prior right in the use of the corporate name Pag-iribang Bicolnon. LLjur That respondent's corporate name Confederation of Pag-iribang Bicolnon is deceptively and confusingly similar to that of petitioner's Pag-iribang Bicolnon is borne out by the evidence on record consisting of the testimonies of witnesses Gabitan and Tijam. The unusual situation that marred the party and the convention called by the respondent corporation where members of petitioners corporation, some of whom coming from far flung places, attended said occasions is an eloquent proof that there was real, not imaginary confusion created as result of respondent's use of the corporate name Confederation of Pag-iribang Bicolnon. Although the two corporate names, that of the petitioner and that of the respondent, may not be regarded as an imitation of another, nevertheless when viewed in the light of what is actually happening, especially from among the members of the two organization, the conclusion is inescapable that respondents' corporate name resembles that of the petitioner. Thus, it can safely be said that if the name sought to be changed is so similar to that of an existing corporation as to deceive or mislead person of ordinary caution and prudence into belief that they are dealing with the same, then there is similarity and confusion. And it has been held that one corporate name is to be regarded as an imitation of another, when it so far resembles the other that a person using care, caution and observation which the public uses and may be expected to use would mistake one for the other, the location of the corporation and the characteristic of the business being conducted. (State vs. McGrath, 92 No. 355, 5 SW 29). It is an undisputed fact that petitioner has acquired a prior right to the corporate name Pag-iribang Bicolnon when it registered the said name in 1983. Since then, it has acquired an exclusive right to the use of the corporate name Pag-iribang Bicolnon. Thus, it has been held that when such name is possessed by an active, responsible and reputable organization, it becomes an asset of very great value in the course of time, and one which should not be injuriously affected or destroyed unless it is injuriously interfering with a like possession of some other corporation or association (Western Auto Supply v. Knox, 93 F22 850). For all the foregoing, we find the petitioner to have acquired a prior and exclusive right in the use of the corporate name Pag-iribang Bicolnon. And any attempt to use the same name although with a slight variation in such a way as to induce persons to deal with it in the belief that they are dealing with the association which have given a reputation to the name, can very well be considered an infringement and be dealt with seriously. WHEREFORE, judgment is hereby rendered in favor of the petitioner and against the respondent declaring its corporate name Confederation of Pag-iribang Bicolnon, Inc., as deceptively and confusingly similar to that of petitioner's corporate name Pag-iribang Bicolnon. Accordingly, respondent is hereby directed to amend its articles of incorporation by deleting the name Pag-iribang Bicolnon, Inc. in its corporate name within thirty (30) days from the finality of this decision. Let copy of this Order be furnished the Records Division, this Commission, for inclusion in the corporate records of both corporations. LLphil SO ORDERED. (SGD.) ALBERTO P. ATAS Hearing Officer