Red Line Transport v. Rural Transit – G.R. No. 41570, September 6, 1934

Fact:
Petitioner Red Line Transport Co,(RED) opposed the application of Respondent Rural Transit Co (RURAL) for a certificate of public conveyance (CPC) to facilitate bus trips from Manila to Tuguegarao. After the Publice Service Commission approved Rural’s CPC, RED filed an motion for hearing in which it called the attention of the CFI that the RURAL has an application of voluntary dissolution of corporation in Manila. During the hearing, it was found out that Bachrach Motors Company is the real operator of the said bus company. After admitting that Bachrach was the actual operator of the bus line and only using Rural as a tradename, the CFI order the commission to amend all the documents submitted as RURAL and change it to Bachrach and that the RURAL application assumed Bachrach as it tradename. Hence this case.

Issue:
Whether a corporation can assume a Name different from want it registered?

Held:
No. There 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 corporate under the name stated in the certificate.” A corporation has the power “of succession by its corporate name.” 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 expressed in our corporation statute and the Code of Commerce is clearly against such a practice.

One thought on “Red Line Transport v. Rural Transit – G.R. No. 41570, September 6, 1934

  1. Pingback: Corporation Law

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