SEC En Banc Case No. 11-13-307 RODERICO T. SANTOS, Appellant, -versus- PHILIPPINE BRITISH ASSURANCE COMPANY, INC. and COMPANY REGISTRATION AND MONITORING DEPARTMENT, Appellees.

Securities and Exchange Commission Commission En Banc Republic of the Philippines Department of Finance

RODERICO T. SANTOS Appellant,

-versus-

MONITORING DEPARTMENT, ASSURANCE COMPANY, INC. PHILIPPINE and REGISTRATION COMPANY Appellees. BRITISH AND SEC En Banc Case No. 11-13-307

DECISION

dismissing Appellant Santos' Complaint against Appellee PBACI for lack of merit. Monitoring Department (CRMD) dated 1 October 20131 (the "Order") filed by Appellant Roderico T. Santos (Appellant Santos) on the same date before this Commission assailing the Order of the Company Registration and This resolves the Memorandum of Appeal dated 7 November 2013

THE PARTIES

61 Xavierville Avenue, Loyola Heights, Quezon City. married and with address at Unit 201 Xavierville Royale Condominium, No. Appellant RODERICO T. SANTOS, is a Filipino, of legal age,

INC. ("PBACI") is a domestic corporation duly organized and incorporated under Philippine laws, with office address at Penthouse, Morning Star Building, 347 Sen. Gil Puyat Ave. Extension, Makati City. Appellee PHILIPPINE BRITISH ASSURANCE COMPANY,

' Memorandum of Appeal, Annex "A".

SEC En Banc Case No. i1-13-307 Roderico T. Santos vs Philippine British Assurance Company, Inc Page 2 of

STATEMENT OF RELEVANT FACTS

O.T. Balgos; and (6) Danilo L. Natividad. Rosario W. Cuyegkeng and Nelia D. Wongchuking were owners of the majority of PBACI shares. Commission that its directors were (1) Rosario W. Cuyegkeng, (2) Nelia D. Wongchuking, (3) Jose Z. Clemente, (4) Cesario P. Tiopianco, (5) Marcial of shareholders approved to change the corporate name of NGI to Philippine British Assurance Corporation Incorporated (PBACI). The directors of PBACI disclosed in the last General Information Sheet filed with the established and incorporated to do insurance and other related businesses. The Articles of Incorporation of NGI which was approved by the Commission Articles of Incorporation after its Board of Directors and the required number provided for a corporate term of fifty (50) years from 10 March 1960 or until 10 March 2010. On 28 March 1962 NGI filed an application to amend its On 10 March 1960, N.G.I. Insurance & Surety Corporation (NGI) was

Incorporation for purposes of extending its corporate term. disclose that PBACI did not file an application to amend its Articles of On 10 March 2010, the corporate term of PBACI expired. Records

R dated 1 July 2009 granting it authority to do insurance business from July 2009 to July 2010. from the Insurance Commission a Certificate of Authority with No. 2009/6- Prior to the expiration of its corporate term, PBACI was able to secure

registration with the Securities and Exchange Commission". the effect that the IC did not interpose any objection "to the company's Insurance Commission (IC) a "1st Endorsement" dated 4 November 2010 to PBACI").2 This was called "re-registration" by the CRMD. The proposed name was identical with PBACI, the corporation which term has expired. The incorporators of the New PBACI applied for and was able to secure from the D. Wongchuking, Jose Z. Clemente, Cesario P. Tiopianco, and Danilo L. Natividad applied for the registration of a new corporation, proposing for this purpose the name Philippine British Assurance Company, Inc. (the "New After the expiration of its corporate term, Rosario W. Cuyegkeng, Nelia

Registration Number CS-201019311 and Tax Identification Number 000- 803-300-000. The incorporators and directors of the New PBACI are (1) Certificate of Incorporation in favor of the New PBACI, with SEC PBACI complied with all the requirements prescribed by law, issued a On 26 November 2010, this Commission, after finding that the New

2 This was called "Re-registration" by the Company Registration and Monitoring Department

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Rosario W. Cuyegkeng, (2) Nelia D. Wongchuking, (3) Jose Z. Clemente, (4) Cesario P. Tiopianco; and (5) Danilo L. Natividad.

Revised Corporation Code) and existing jurisprudence. is identical to that of a corporation whose corporate term has expired constitutes a violation of Sec. 18 of Corporation Code (now Sec. 17 of the CRMD praying that the Certificate of Incorporation issued to the New PBACI be cancelled on the ground that the use by the New PBACI of a name which On 24 June 2013, Appellant Roderico filed a Complaint3 before the

PBACI thus prayed for the dismissal of the Complaint. that its use of PBACI is valid and sanctioned by law, rules and regulations, specifically SEC Memorandum Circular No. 14, Series of 2000. The New In its Verified Answer4 dated 09 August 2013, the New PBACI argued

Exchange Commission, G.R. No. L-23606, July 29, 1968", that an old corporate name cannot be retained in its exact form. Alhambra Cigar & Cigarette Manufacturing Company, Inc., vs Securities and In his Reply5, Appellant Santos countered and argued on the basis of

accordance with law, and with the applicable Memorandum Circulars which it was ruled that the Commission's approval of the New PBACI's application have the force and effect of law. and the subsequent issuance of its Certificate of Incorporation was in After joining all the issues, the CRMD issued the assailed Order where

Hence, the instant appeal filed by Appellant Santos.

ISSUE

be cancelled? Whether or not the Certificate of Incorporation of New PBACI should

3 Memorandum of Appeal, Annex "B". 5 Id., Annex "D" 4 Id., Annex "C

SEC En Banc Case No. i1-13-307 British Assurance Company, Inc. Roderico T. Santos vs Philippine Page 4 of 7

DECISJON

instant appeal unmeritorious and resolves to deny the same. well as the evidence presented by both parties, this Commission finds the After a careful review and consideration of the facts and the law, as

case, that the Incorporators applied for the incorporation of the New PBACI after the corporate term of PBACI expired on 10 March 2010. Natividad (the "Incorporators"), all of whom were incidentally the incorporators and directors of new PBACI, decided to form a new corporation, and to use the corporate name "Philippine British Assurance term has expired. Thus, it is also undisputed as borne by the records of the March 2010. Wongchuking, Jose Z. Clemente, Cesario P. Tiopianco; and Danilo L. Company, Inc.", one which is identical with their previous corporation whose It is undisputed that the corporate term of old PBACI expired on 10 After such date, Rosario W. Cuyegkeng, Nelia D.

mandated by Section 17 of the Corporation Code, the last paragraph of which provides, thus: on the business of non-life insurance"6, the Commission required the incorporators of the New PBACI to submit an endorsement from the IC, in Corporation Code) and existing rules and regulations. The foregoing is addition to the standard reguirements provided under Batas Pambansa 68 (the Considering that the primary purpose of the New PBACI is to "carry

articles or amendment is in accordance with law." (Emphasis supplied) educational institutions, and other corporations governed by special laws shall be accepted or approved by the Commission incorporation of banks, banking and quasi-banking institutions, unless accompanied by a favorable recommendation_of.the appropriate government agency _to the effect that such "No articles of incorporation or amendment to articles of building and loan associations, trust companies and other financial intermediaries, insurance companies, public utilities.

support in the case of Ridon v. AXN Networks Phils., Inc." where the Supreme has complied with and submitted all the requirements prescribed under the Incorporation of the New PBACI on 26 November 2010 after finding that it Corporation Code and existing rules and regulations. The foregoing finds The CRMD approved the application and issued the Certificate of

7 G.R. No. 210885 & 210886, August 26, 2014 6 See Page 1 of the Articles of Incorporation of Philippine British Assurance Company, Inc.

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the exercise of its power to issue certificates of incorporation, thus: Court discussed the nature of the authority of the Commission in relation to

"The SEC, in issuing certificates of registration in favor of a corporation, is not called upon to adjudicate the rights of contending parties or to exercise, in any manner, discretion of a judicial nature: nor does it conduct

of requirements of the Code." (Emphasis supplied) investigations and then draw conclusions from them as basis for its actions. What it does is merely to verify the documents submitted for incorporation in order to determine if there has been substantial compliance with the list

its incorporators, but also from PBACI whose corporate term has expired. PBACI which acquired a legal personality separate and distinct not only from issuance of its Certificate of Incorporation resulted in the creation of the New The approval by CRMD of the application of the New PBACI and the

Inc. vs Securities and Exchange Commission8 to support his position. heavily on the case of Alhambra Cigar & Cigarette Manufacturing Company, recognized by Appellant Santos. What Appellant Santos is questioning in the instant case is the use by the Incorporators of the name "Philippine British CRMD in the assailed Order. Appellant Santos argues that the foregoing constitutes a violation of Section 18 of the Corporation Code and relied Assurance Company, Inc." for the New PBACI which was sustained by the The right of the Incorporators to form a new corporation was

CRMD correctly ruled that since PBACI is a dissolved entity and the corporate name is not registered with the IPO, Appellee could validly use PBACI as its corporate name. agrees with the CRMD that the use by the New PBACI of the name which is identical to PBACI, a corporation which term has expired, is in accordance name of an existing corporation or (b) a name which is already protected by law or those that are registered with the Intellectual Property Office (IPO) with law. Section 18 of the Corporation Code aims to protect (a) a registered Appellant Santos' stance does not induce assent. The Commission

consented to the use by the New PBACI of the name "Philippine British Memorandum Circular No. 5, Series of 2008 (MC No. 15) is applicable in the issuance of the Certificate of Incorporation of the New PBACI because the Incorporators, two (2) of whom were majority shareholders of old PBACI, Assurance Company, Inc." instant case and justified the approval of the application of Appellee, and the The Commission also agrees with the CRMD that Section 15 of

8 G.R. No. L-23606, July 29, 1968

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provide for the multifarious and complex situations that may be encountered in enforcing the law. All that is required is that the regulation should be germane to the defects and purposes of the law and that it should conform to the standards that the law prescribes.' powers because it is impracticable for the law-making body to anticipate and agencies, such as this Commission, possess quasi-legislative or rule-making particularly in the prevention of fraud and abuses on the part of the controlling stockholders, members, directors, trustees or officers." Moreover, in a long line of cases, the Supreme Court has consistently ruled that administrative reasonably necessary to enable it to perform its duties hereunder, Corporation Code which provides that the Securities and Exchange provisions of this Code, and to_promulgate rules_and regulations Commission "[s)hall have the power and authority to implement the The validity of MC No. 15 is anchored on Article 143 of the

the stockholders who represent a majority of the outstanding capital stock of the dissolved or revoked corporation. the rule is simple: a group of persons intending to form a corporation may use the name of a dissolved corporation or one whose registration has been revoked if its use has been allowed at the time of dissolution or revocation by Under Section 18 of the Corporation Code in relation to MC No. 15.

PBACI, would deny to themselves the consent required by law. PBACI shares. It would be absurd to think that the Incorporators who are seeking approval from the Commission to form and incorporate the New Incorporators of the New PBACI. We take note of the fact that Rosario W. Cuyegkeng and Nelia D. Wongchuking were owners of the majority of PBACI was able to secure the consent of the majority stockholders of the dissolved PBACI considering that the granting authority were the very A careful review of the records of case would reveal that the New

invalidity and should thus be cancelled. registration" which he argues is nowhere to be found in the Corporation Code. registration" tainted the certificate of incorporation issued by CRMD with Appellant Santos is of the theory that the use by CRMD of the term "re- Appellant Santos belabors the use by CRMD of the term "re-

" The People of the Philippines vs Hon. Maximo A. Maceren, G.R. No. L-32166, 18 October 1977. registration of a new corporation using the name of an old corporation where correctly observed that term "re-registration" is not in the Corporation Code, it cannot be denied that what was approved by the CRMD was the mere corporation. The term "re-registration" was used by the CRMD to refer to the ordinary application for the registration of the New PBACI, a new The Commission is not convinced. While Appellant Santos might have

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the incorporators of the former was able to secure the consent of the latter in compliance with the requirements of MC No. 15. The fact that CRMD termed or called it "re-registration" did not invalidate the act of the SEC of issuing the Certificate of Incorporation after a finding that the applicant has complied with all the requirements prescribed by law.

In view of the foregoing, this Commission finds no reason to disturb the findings of the CRMD and hereby resolves to affirm the same.

WHEREFORE, premises considered, the Order of the CRMD dated 1

DENIED for lack of merit. October 2013 is hereby AFFIRMED. The Appeal Memorandum is hereby

SO ORDERED

Pasay City, Philippines, 16 January 2020

EMILI AQUINO

person

EPHYRO LUIS B. AMATONG JAVEY PAUL D. FRANCISCQ

Commissioner Commissioner

KELVINLE TER K. LEE KARL BELLO

Commissioner Cor hissioner