#3 INDUSTRIAL REFRACTORIES VS CA CASTILLO

TOPIC: CORPORATE NAME

DOCTRINE:

The SEC has absolute jurisdiction over all

corporations so it can implement the Corporation
Code. Section 18 of the Corporation Code prohibits any
proposed name which is identical or deceptively or
confusingly similar to that of any existing corporation
or any other name already protected by law.
FACTS:
1. Refractories Corporation of the Philippines (RCP),
herein respondent was organized in 1976 and was
incorporated
in
1977.
RCP
is
engaged
in
manufacturing, selling, exporting and dealing in any
and all refractory bricks, its by-products and
derivatives.
2. Industrial Refractories Corporation of the Philippines
(IRCP), herein petitioner was incorporated in 1979
under
the
name
of
Synclaire
Manufacturing
Corporation. It amended its Articles of Incorporation in
1985 and changed its name into IRCP. It is engaged in
manufacturing all kinds of ceramic products except
paint and zincs.
3. In 1988, RCP found out that IRCP was using such
corporate name so it filed a petition before the SEC to
compel the latter to change its corporate name
because it is confusingly similar with formers
corporate name. SEC ruled in favour of RCP and
ordered IRCP to remove RCP in its corporate name.
4. SEC En Banc modified and ordered to remove the
word Refractories only. CA affirmed SEC En Banc
Decision.
ISSUES:
1. WON SEC has jurisdiction over the case?

YES.

2. WON RCP is entitled to the exclusive use of the word

Refractories even though it is a generic word?
YES.
3. WON the 2 corporate names are confusingly similar?
YES.
RATIO:
First Issue:
1. SECs jurisdiction is not merely confined within sec.
5 PD 902-A, but by express mandate, has absolute
jurisdiction,
supervision
and
control
over all
corporations. Hence, it can enforce the Corporation
Code. Section 18 (See Doctrine).
2. SEC has duty to prevent confusion to protect
corporations and the public so it has the authority to
determine whether the corporate names would likely
to cause confusion, thus, has jurisdiction.
Second Issue:
1. Refractories refers to structural materials used at
high temperature to industrial furnaces. It is a generic
term, but its usage is not widespread and is limited
merely to the industry or trade in which it is used.
Hence, continuous use by RCP for considerable period
has made the term so closely identified with it.
Third issue:
1. In Philips Export BV vs CA, the Court held that to fall
within the prohibition, 2 requisites must be proven:
(1) that the complainant corporation acquired a
prior right over the use of such corporate name;
(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.
2. First requisite is determined by Priority of Adoption.
RCP used it in 1976, while IRCP in 1985 only or 9 years
after former. Hence, RCP acquired prior right to use of
Refractories in its corporate name.

3. Second requisite is determined by if it would

mislead a person using ordinary care
and
discrimination. Both corporations have the words
Refractories, Corporation, and Philippines and
the only distinguishing word is Industrial. Industrial
merely identifies a corporations general field of
activities or operations.
4. Therefore, names are patently similar that even with
reasonable care and observation, confusion might
arise. It happened as found by SEC that there were
instances when different steel companies were
confused especially both have same packaging.
5. Revised Guidelines in the Approval of Corporate And
Partnership Names requires:

(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.
DISPOSITIVE:
Court
(respondent) won.

denied

the

petition.

RCP