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Red Line Transportation Co. vs. Rural Transit Co.
GR No. 41570 | Sept. 6, 1934
Facts:
· This is a petition for review of an order of the Public
Service Commission 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
Tuguegarao.
· On June 4, 1932, Rural Transit filed an application for
certification of a new service between Tuguegarao and Ilagan
with the Public Company Service Commission (PSC), since the
present service is not sufficient
· Rural Transit further stated that it is a holder of a
certificate of public convenience to operate a passenger bus
service between Manila and Tuguegarao
· Red Line opposed said application, arguing that they
already hold a certificate of public convenience for
Tuguegarao and Ilagan, and is rendering adequate service.
They also argued that granting Rural Transit’s application
would constitute a ruinous competition over said route
· On Dec. 21, 1932, Public Service Commission approved
Rural Transit’s application, with the condition 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."
· A motion for rehearing and reconsideration was filed by
Red Line since Rural Transit has a pending application before
the Court of First Instance for voluntary dissolution of the
corporation
· A motion for postponement was filed by Rural Transit as
verified by M. Olsen who swears "that he was the secretary of
the Rural Transit Company, Ltd
· During the hearing before the Public Service
Commission, the petition for dissolution and the CFI’s
decision decreeing the dissolution of Rural Transit were
admitted without objection
· 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 name of the Rural
Transit Company, Ltd., as a trade name
· However, PSC granted Rural Transit’s application for
certificate of public convenience and ordered that a
certificate be issued on its name
Document1
· PSC relied on a Resolution in case No. 23217,
authorizing Bachrach Motor to continue using Rural Transit’s
name as its tradename in all its applications and petitions to
be filed before the PSC. Said resolution was given a
retroactive effect as of the date of filing of the application or
April 30, 1930
Issue: Can the Public Service Commission authorize a
corporation to assume the name of another corporation as a
trade name?
Ruling: NO
· 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
corporate under the name stated in the certificate."
· A corporation has the power "of succession by its
corporate name." It is essential to its existence and 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.
In this case, the order of the commission authorizing the
Bachrach Motor Co., Incorporated, to assume the name of
the Rural Transit Co., Ltd. likewise incorporated, as its trade
name being void. 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
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