SEC Adm. Case No. 06-12-261 In the matter of Asia Investment Corporation

SEC Building, EDSA, Greenhills, Mandaluyong City. Securities and Exchange Commission Republic of the Philippines Department of Finance

In the Matter of:

ASIA INVESTMENT CORPORATION.

Appellant.

SEC EN BANC CASE NO. 06-12-261

DECISION

name "ASIA INVESTMENT? for being confusingly similar with ASIAINVEST CORP. and for using the word "INVESTMENT" as part of its corporate name. Monitoring Department ("CRMD", for brevity) of the Commission dated 31 May 2012 ("appellant", for brevity) for CRMD to reconsider its denial of its proposed business which denied the request of appellant ASIA INVESTMENT CORPORATION Before the Commission is the assailed Letter of the Company Registration and

purpose was to "engage in real estate business; to buy, sell, rent, sub-lease, and exchange Said properties generally x x x."2" Its corporate term was fifty (50) years.3 real properties, improved and unimproved, residential or commercial; the building, incorporation, no application for the extension of its term has been filed.4 Thus, its construction, and alteration of houses thereon, and the management and development of corporate existence expired on 4 December 2002.5 Appellant was registered with the Commission on 4 December 1952.' Its primary Since its

The facts, as alleged by the parties to the case, are as follows:

2002, the appellant applied. for the reservation of the name "ASIA INVESTMENT ASIAINVEST CORP., which registered on 30 March 2010.6 CORPORATION" with the CRMD for the purposes of "re-incorporation" sometime on May 2012. Said application for reservation of the name was however denied since it appeared from the records that. said proposed name is confusingly similar to After the expiration of the corporate existence of the appellant on 4 December

Memorandum of Appeal, (Articles of Incorporation) Annex "A". Reply Memorandum, p. 1. 4 Reply Memorandum, p. 1. SEC Registration No. 7332. Certificate of Corporate Filing/Information dated 15 October 2012, and Memorandum of Appeal, par. 5. Id

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businesses" since the purposes of the appellant and ASIAINVEST CORP. are entirely (3) words as differentiated from ASIAINVEST CORP., which consists of only two (2) reconsideration of the denial by the CRMD claiming that that the possibility of "being different.8 Moreover, the appellant contends that the appellant's name consists of three words. 'confused' or deceived' is practically nil due to the difference in the respective The counsel of the appellant requested, in Letter dated 17 May 2012,7 a

reconsideration as it is confusingly similar with ASIAINVEST CORP. Moreover, the CRMD did not allow the appellant to ;use the word "INVESTMENT" as part of its holding company as required under SEC Memorandum Circular No. 5, Series of 2008 corporate name consists of three (3) words whereas the ASIAINVEST CORP. name corporate name since its proposed business activity is realty and not as an investment or ("Circular", for brevity). Lastly, the CRMD stated that the fact that the proposed consists of only two (2) words is of no moment. In the assailed Letter dated 31 May 2012, the CRMD denied the request for

Hence, this appeal.

is "confusingly"" or "deceptively" similar with ASIAINVEST CORP. which is registered with the Commission, such that the ruling of the CRMD should be reversed. The issue to be resolved is whether the appellant's proposed name to be registered

confusingly similar to that of any existing corporation.11 to wit: (1) that the complainant corporation acquired a prior right over the use of such protected by law; or (c) patently deceptive, confusing or contrary to existing law.12 The second requisite is likewise mentioned under the Circular.13 The right to.the exclusive use allowed by the Commission if the proposed name is identical or deceptively or 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 Section 18 of the Corporation Code provides that no corporate name may be Two requisites must be proven.

13 The Circular, with respect to the second requite, provides the following: Io Id., (Letter of CRMD dated 31 May 2012) Annex "E". 12 Industrial Refactories Corporation of the Philippines v. Court of Appeals, et al., G.R. No. 122174, 3 7 Memorandum on Appeal, (Letter from the appellant dated 17 May 2012) Annex "D" 9 Id., (Letter of the appellant dated 17 May 2012) Annex "D". 1 Batas Pambansa Bilang 68 (1980). 8 Id., (Articles of Incorporation of ASIAINVEST CORP.) Annex "C". ASIAINVEST CORP. is to engage in "x x x the business of providing consultancy and advocacy services and creating and developing of products in connection with or relative to projects of corporations, x x x. October 2002, citing Philips Export B.V., et al. v. Court of Appeals, et al., G.R. No. 96161, 21 February 1992 The primary purpose of

"3. a) The name shall not be identical, misleading or confusingly similar to a corporate or Industry, in case of sole proprietorships; x x x partnership name registered with the Commission, or with the Department of Trade and

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of a corporate name with freedom from infringement by similarity is determined by priority of adoption.

expired does not deprive it of its right to the protection of its corporate name.18" Such reasons: (1) that the name has been used for over sixty (60) years since its incorporation on 4 December 1952;15 (2) that the appellant has been paying taxes to the government for by the use of the corporate name for the last sixty (60) years and should not be penalized arguments are devoid of merit. the last ten (10) years and "even before";1 (3) that the appellant acquired "vested rights" for its inadvertence; The appellant argues that its name has a "priority of adoption" for the following 17 and (4) that failure to "re-register" the corporation after its term

corporate name "ASIA INVESTMENT? since it registered on 30 March 2010 which is ahead of the appellant whose corporate existence expired on 4 December 2002. In fact, identical or confusingly similar name registered with the Commission at the time it applied for incorporation as correctly pointed out by the CRMD.19 ASIAINVEST CORP. was allowed to register since there was no other entity with an In the case at bar, ASIAINVEST CORP. acquired a prior right over the use of the

natural person to take part in mundane affairs cease to exist upon his death" .20 Moreover, its oversight and inadvertence. The moment a corporation's right to exist as an "artificial when the corporation finishes the course of its existence, the name is no longer that of an rights" over the corporate name "ASIA INVESTMENT" even if it has been paying taxes has a corporate existence after the expiration of its corporate term which expired due to person" expires or ceases, its corporate powers are terminated "just as the powers of a existing corporation, and it may be acquired by another.2 and been used by the appellant for over sixty (60) years. The reason is that it no longer On the other hand, the appellant does not have a "priority of adoption" or "vested However, the name of the

14. Notwithstanding the foregoing, the Commission' shall, for the protection of the public interest and other justifiable causes, disallow the use of the names that, in its judgment, morals, good customs or public policy." are misleading, deceptive, confusingly similar to a registered name, or contrary to public

2o AThambra Cigar & Cigarette Manufacturing Company, Inc. v. Securities and Exchange Commission. 21 Fletcher, Cyclopedia Corporations, sec. 2415, citing Grand Rapids Trust Co. v. Haney School Furniture 15 Memorandum of Appeal, p. 3, 4 and'5, and Motion for Leave to File Rejoinder to Reply Memorandum, p. 1 Id., p. 5, and Motion for Leave to File Rejoinder to Reply Memorandum, p. 1. 14 Industrial Refactories Corporation of the Philippines v. Court of Appeals. I7 Id., and Motion for Leave to File Rejoinder to Reply Memorandum, p. 2. 18 Memorandum of Appeal, p. 4. I Reply Memorandum, p. i. G.R. No. L-23606, 29 July 1968, citing 19 C.J.S., p. i485, at footnote 76, citing Sharp v. Eagle Lake Lumber Co. 212 P. 933, 60 Cal. App. 386 Co., 221 Mich 487, 191 NW 196.

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dissolved corporation may only be acquired by another corporation after three (3) years from its dissolution.2

right to use the name "ASIA INVESTMENT", and may be acquired by another to "re-register" using it original name within the three (3) year period deprives it of its regardless of any goodwill it generated over the years. (7) years from the dissolution of the appellant. Thus, the appellant's failure to extend or In which case, ASIAINVEST CORP. acquired the use of its corporate name seven

deceptively similar to ASIAINVEST CORP. It is of no moment that the primary purpose the entity concerned, the evasion of legal obligations and duties, and the reduction of and the clientele of both the appellant and ASIAINVEST CORP. are different, and that the proposed corporate name of appellant consists of three (3) words whereas the ASIAINVEST CORP. name consists of only two (2) words as argued by the appellant.2 name is the avoidance of fraud upon the public which would have occasion to deal with difficulties of administration and supervision over corporations. The policy underlying the prohibition in Section 18 against the registration of a corporate As to the second requisite, the desired name of the appellant is confusingly and

commodities.25 The appellant clearly misses the point. actual investment and it has no intention of dealing stocks, shares or other similar Lastly, the appellant claims its use of the word "INVESTMENT" does not refer to

No. 12 of the Circular provides the following:

enumerated below can be used only by the entities mentioned: "Unless otherwise authorized by the Commission, the words and phrases

house, investment company or holding company; x x x" (Emphasis ours) a) Investment(s)' or 'Capital' -- by entities organized as an investment

investment company or holding company, regardless if it does not deal with stocks, shares or other similar commodities. proposed corporate name since the proposed business activity is realty and not an In which case, the appellant is not allowed to use word "INVESTMENT" in its

23 Memorandum of Appeal, p. 3, 4 and 5, and Motion for Leave to File Rejoinder to Reply Memorandum, p. 24 Lyceum of the Philippines, Inc. v. Court of Appeals, et al. G.R. No. 101897, 5 March 1993. 25 Motion for Leave to File Rejoinder to Reply Memorandum, p. 3. 22 SEC Memorandum Circular No. 14-2000 provides: "14. The name of a dissolved firm shall not be allowed to be used by other firms within three (3) years after the approval of the dissolution of the the outstanding capital stock of the dissolved firm. corporation by the Commission, unless allowed by the last stockholders representing at least majority of 3

E

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premised on the phrase "unless authorized by the Commission " under No. 12 of the said Circular. Moreover, the appellant claims that its "re-incorporation" is not contrary to public morals, good customs or public policy. The appellant argues that the exceptions to the provisions in the Circular are

an exception especially since there are underlying policy reasons for requiring certain entitles to use the word "INVESTMENT The appellant's argument is baseless. The Commission does not see it fit to make

public morals, good customs or public policy. The Commission is not preventing the appellant from incorporating but merely denying its request to use the corporate name "ASIA INVESTMENT" However, the appellant is correct in stating that incorporation is not contrary to

differentiate it from an existing registered company name.2 add one or more distinctive words to the proposed name to remove the similarity or In which case, the appellant is ADVISED to drop the word "INVESTMENT" and

the instant appeal is hereby DISMISSED for lack of merit. WHEREFORE, premises considered, the CRMD's Order/Ruling is affirmed and

SO ORDERED.

Mandaluyong City, 4 April 2013.

78 TERESITA J. HERBOSA Chairperson

w39 8w. eto A.fe MA. JUANITX E. CUETO Commissioner ANTONIETA F. IBE Commissioner

MANUEL Commissioner TUBERTO B. GAITE ELADO Commissioner MM W.JALA

CC: ERID

26 No. 3. b), Id.