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[No. 41570. September 6, 1934]

RED LINE TRANSPORTATION Co., petitioner and

appellant, vs. RUBAL TRANSIT CO., LTD.,, respondent
and appellee.

1. PUBLIC SERVICE ; AUTHORITY OP PUBLIC SERVICE

COMMISSION TO AUTHORIZE A CORPORATION TO
ASSUME THE NAME OF ANOTHER.—There is no law
that empowers the Public Service Commission or any
court in this jurisdiction to authorize one corporation to
assume the name of another corporation as a trade name.
Both the Rural Transit Company, Ltd., and the Bachrach
Motor Co., Inc., are Philippine corporations and the very
law of their crea

550

550 PHILIPPINE REPORTS ANNOTATED

Red Line Transportation Co. vs. Rural Transit Co.

tion and continued existence requires each to adopt and

certify a distinctive name.

2. ID.; ID.; CHANGE OP CORPORATION'S NAME.—The

incorporators "constitute a body politic and corporate
under the name stated in the certificate." (Section 11, Act
No. 1459, as amended.) A corporation has the power "of
succession by its corporate name." (Section 13, ttrid.) The
name of a corporation is therefore essential to its
existence. It cannot change its name except in the manner
provided by the statute. By that name alone is it
authorized to transact business.

3. ID. ; ID. ; ID.—The law gives a corporation no express or

implied authority to assume another name that is
unappropriated; still less that of another corporation,
which is expressly set apart for it and protected by the
law. If any corporation could assume at pleasure as an
unregistered trade name the name of another corporation,
this practice would result in confusion and open the door
to frauds and evasions and difficulties of administration
and supervision.

4. ID.; ID.; ID.; POLICY OP THE LAW.—The policy of the

law as expressed in our corporation statute and the Code
of Commerce is clearly against such a practice. (Cf.

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Scarsdale Pub. Co.Colonial Press vs. Carter, 116 New

York Supplement, 731; Svenska Nat. F. i. C. vs. Swedish
Nat. Assn., 205 Illinois [Appellate Courts], 428, 434.)

REVIEW of an order of the Public Service Commission.

Cruz, Commissioner.
The facts are stated in the opinion of the court.
L. D. Lockwood for appellant.
Ohniqk & Opisso for appellee.

BUTTE, J.:

This case is before us on a petition for review of an order of

the Public Service Commission entered December 21, 1932,
granting to the Rural Transit Company, Ltd., a certificate
of public convenience to operate a transportation service
between Ilagan in the Province of Isabela and Tuguegarao
in the Province of Cagayan, and additional trips in its
existing express service between Manila and T.uguegarao.
551

VOL. 60, SEPTEMBER 6, 1934 551

Red Line Transportation Co. vs. Rural Transit Co.

On June 4, 1932, the Rural Transit Company, Ltd., a

Philippine corporation, filed with the Public Service
Commission an application in which it is stated in
substance that it is the holder of a certificate of public
convenience to operate a passenger bus service between
Manila and Tuguegarao; that it is the only operator of
direct service between said points and the present
authorized schedule of only one trip daily is not sufficient;
that it will be also to the public convenience to grant the
applicant a certificate for a new service between
Tuguegarao and Ilagan.
On July 22, 1932, the appellant, Red Line
Transportation Company, filed an opposition to the said
application alleging in substance that as to the service
between Tuguegarao and Ilagan, the oppositor already
holds a certificate of public convenience and is rendering
adequate and satisfactory service; that the granting of the
application of the Rural Transit Company, Ltd., would not
serve public convenience but would constitute a ruinous
competition for the oppositor over said route.
After testimony was taken, the commission, on
Deeember 21, 1932, approved the application of the Rural
Transit Company, Ltd., and ordered that the certificate of
public convenience applied for be "issued to the applicant
Rural Transit Company, Ltd.," with the condition, among
others, that "all the other terms and conditions of the
various certificates of public convenience of the herein
applicant and herein incorporated are made a part hereof."
On January 14, 1933, the oppositor Red Line
Transportation Company filed a motion for rehearing and
reconsideration in which it called the commission's
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attention to the fact that there was pending in the Court of

First Instance of Manila case No. 42343, an application f or
the voluntary dissolution of the corporation, Rura! Transit
Company? Ltd. Said motion for reconsideration was set
down for hearing on March 24, 1933. On March 23, 1933,
the Rural Transit Company, Ltd., the applicant, filed a
motion for postponement. This motion was verified by M.
Oisen

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552 PHILIPPINE REPORTS ANNOTATED

Red Line Transportation Co. vs. Rural Transit Co.

who swears "that he was the secretary of the Rural Transit

Company, Ltd., in the above entitled case." Upon the
hearing of the motion for reconsideration, the commission
admitted without objection the following documents filed in
said case No. 42343 in the Court of First Instance of Manila
for the dissolution of the Rural Transit Company, Ltd., the
petition for dissolution dated July 6, 1932, the decision of
the said Court of First Instance of Manila, dated February
28, 1933, decreeing the dissolution of the Rural Transit
Company, Ltd.
At the trial of this case before the Public Service
Commission an issue was raised as to who was the real
party in interest making the application, whether the
Rural Transit Company, Ltd., as appeared on the face of
the application, or the Bachrach Motor Company, Inc.,
using the name of the Rural Transit Company, Ltd., as a
trade name. The evidence given by the applicant's
secretary, Olsen, is certainly very dubious and confusing,
as may be seen from the following:
"Q. Will you please answer the question whether it is the
Bachrach Motor Company operating under the trade name
of the Rural Transit Company, Limited, or whether it is the
Rural Transit Company, Limited in its own name this
application was filed?—A. The Bachrach Motor Company is
the principal stockholder.
"Q. Please answer the question.
"ESPELETA. Objecion porque la pregunta ya ha sido
contestada.
"JUEZ. Puede contestar.
"A. I do not know what the legal construction or
relationship existing between the two.
"JUDGE. I do not know what is in your mind by not
telling the real applicant in this case?
"A. It is the Rural Transit Company, Ltd.
"JUDGE. As an entity by itself and not by the Bachrach
Motor Company?

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VOL. 60, SEPTEMBER 6, 1934 553

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Red Line Tramportation Co. vs. Rural Transit Co.

"A. I do not know. I have not given that phase of the matter
much thought, as in previous occasion had not
necessitated.
"JUDGE. In filing this application, you filed it for the
operator on that line? Is it not?
"A. Yes, sir.
"JUDGE. Who is that operator?
"A. The Ritfal Transit Company, Ltd.
"JUDGE. By itself, or as a commercial name of the
Bachrach Motor Company?
"A. I cannot say.
"ESPELETA. The Rural Transit Company, Ltd., is a
corporation duly established in accordance with the laws of
the Philippine Islands.
"JUDGE. According to the records of this commission
the Bachrach Motor Company is the owner of the
certificates and the Rural Transit Company, Ltd., is
operating without any certificate.
"JUDGE. If you filed this application for the Rural
Transit Company, Ltd., and afterwards it is found out that
the Rural Transit Company, Ltd., is not an operator,
everything will be turned down.
"JUDGE. My question was, when you filed this
application you evidently made it for the operator?
"A. Yes, sir.
"JUDGE. Who was that operator you had in mind?
"A. According to the status of the ownership of the
certificates of the f former Rural Transit Company, the
operator was the operator authorized in case No. 23217 to
whom all of the assets of the former Rural Transit
Cojnpany were sold.
"JUDGE. The Bachrach Motor Company?
"A. All actions have been prosecuted in the name of the
Rural Transit Company, Ltd.
"JUDGE. You mean the Bachrach Motor Company, Inc.,
doing business under the name of the Rural Transit
Company, Ltd.?

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554 PHILIPPINE REPORTS ANNOTATED

Red Line Transportation Co. vs. Rural Transit Co.

"A. Yes, sir.

"LOCKWOOD. I move that this case be dismissed, your
Honor, on the ground that this application was made in the
name of one party but the real owner is another party.
"ESPELETA. We object to that petition.
"JUDGE. I will have that in mind when I decide the
case. If I agree with you everything would be finished."
The Bachrach Motor Company, Inc., entered no
appearance and ostensibly took no part in the hearing of
the application of the Rural Transit Company, Ltd. It may

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be a matter of some surprise that the commission did not

on its own motion order the amendment of the application
by substituting the Bachrach Motor Company, Inc., as the
applicant. However, the hearing proceeded on the
application as filed and the decision of December 21, 1932,
was rendered in favor of the Rural Transit Company, Ltd.,
and the certificate ordered to be issued in its name, in the
face of the evidence that the said corporation was not the
real party in interest. In its said decision, the commission
undertook to meet the objection by referring to its
resolution of November 26, 1932, entered in another case.
This resolution in case No. 23217 concludes as follows:
'Premises considered we hereby authorize the Bachrach
Motor Co., Inc., to continue using the name of 'Rural
Transit Co., Ltd./ as its trade name in all the applications,
motions or other petitions to be filed in this commission in
connection with said business and that this authority is
given retroactive effect as of the date of filing of the
application in this case, to wit, April 28, 1930."
.We know of no law that empowers the Public Service
Commission or any court in this jurisdiction to authorize
one corporation to assume the name of another corporation
as a trade name. Both the Rural Transit Company, Ltd.,
and the Bachrach Motor Co., Inc., are Philippine
corporations and the very law of their creation and
continued existence requires each to adopt and certify a
distinctive name. The incorporators "constitute a body
politic and
555

VOL. 60, SEPTEMBER 6, 1934 555

Red Line Transportation Co. vs. Rural Transit Co.

corporate under the name stated in the certificate." (Section

11, Act No. 1459, as amended.) A corporation has the power
"of succession by its corporate name." (Section 13, ibid.) The
name of a corporation is therefore essential to its existence.
It cannot change its name except in the manner provided
by the statute. By that name alone is it authorized to
transact business. The law gives a corporation no express
or implied authority to assume another name that is
unappropriated; still less that of another corporation,
which is expressly set apart for it and protected by the law.
If any corporation could assume at pleasure as an
unregistered trade name the name of another corporation,
this practice would result in confusion and open the door to
frauds and evasions and difficulties of administration and
supervision. The policy of the law as expressed in our
corporation statute and the Code of Commerce is clearly
against such a practice. (Cf. Scarsdale Pub. Co.Colonial
Press vs. Carter, 116 New York Supplement, 731; Svenska.
Nat. F. i. C. vs. Swedish Nat. Assn., 205 Illinois {Appellate
Courts], 428, 434.)

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The order of the commission of November 26, 1932.

authorizing the Bachrach Motor Co., Incorporated, to
assume the name of the Rural Transit C.o.,. Ltd., likewise
incorporated, as its trade name being void, and accepting
the order of December 21, 1932, at its face as granting a
certificate of public convenience to the applicant Rural
Transit Co., Ltd., the said order last mentioned is set aside
and vacated on the ground that the Rural Transit
Company, Ltd., is not the real party in interest and its
application was fictitious.
In view of the dissolution of the Rural Transit Company,
Ltd. by judicial decree of February 28, 1933, we do not see
how we can assess costs against said respondent, Rural
Transit Company, Ltd.

Mcdcolm, Villa-Real, Imperial, and Goddard, JJ.,

concur.

Order set aside and vacated.

556

556 PHILIPPINE REPORTS ANNOTATED

Lao Hian vs. Collector of Customs

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