G.R. No. 205548, February 07, 2018 nature of the services provided by respondents.

e services provided by respondents. Neither is it descriptive in the sense that it

does not forthwith and clearly convey an immediate idea of what respondents' services are.
DE LA SALLE MONTESSORI INTERNATIONAL OF MALOLOS, INC., Petitioner, v. DE In fact, it merely gives a hint, and requires imagination, thought and perception to reach a
LA SALLE BROTHERS, INC., DE LA SALLE UNIVERSITY, INC., LA SALLE ACADEMY, conclusion as to the nature of such services. Hence, the SEC OGC concluded that
INC., DE LA SALLE-SANTIAGO ZOBEL SCHOOL, INC. (FORMERLY NAMED DE LA respondents' use of the phrase "De La Salle" or "La Salle" is arbitrary, fanciful, whimsical
SALLE-SOUTH INC.), DE LA SALLE CANLUBANG, INC. (FORMERLY NAMED DE LA and distinctive, and thus legally protectable. As regards petitioner's argument that its use of
SALLE UNIVERSITY-CANLUBANG, INC.), Respondents. the name does not result to confusion, the SEC OGC held otherwise, noting that confusion
is probably or likely to occur considering not only the similarity in the parties' names but also
the business or industry they are engaged in, which is providing courses of study in pre-
DECISION elementary, elementary and secondary education.14 The SEC OGC disagreed with
petitioner's argument that the case of Lyceum of the Philippines, Inc. v. Court of
JARDELEZA, J.: Appeals15 (Lyceum of the Philippines) applies since the word "lyceum" is clearly descriptive
of the very being and defining purpose of an educational corporation, unlike the term "De La
Petitioner De La Salle Montessori International of Malolos, Inc. filed this petition for review Salle" or "La Salle."16 Hence, the Court held in that case that the Lyceum of the Philippines,
on certiorari1 under Rule 45 of the Rules of Court to challenge the Decision2 of the Court of Inc. cannot claim exclusive use of the name "lyceum."
Appeals (CA) dated September 27, 2012 in CA-G.R. SP No. 116439 and its
Resolution3 dated January 21, 2013 which denied petitioner's motion for reconsideration. Petitioner filed an appeal before the SEC En Banc, which rendered a Decision17 on
The CA affirmed the Decision4 of the Securities and Exchange Commission (SEC) En September 30, 2010 affirming the Order of the SEC OGC. It held, among others, that
Banc dated September 30, 2010, which in turn affirmed the Order5 of the SEC Office of the the Lyceum of the Philippines case does not apply since the word "lyceum" is a generic
General Counsel (OGC) dated May 12, 2010 directing petitioner to change or modify its word that pertains to a category of educational institutions and is widely used around the
corporate name. world. Further, the Lyceum of the Philippines failed to prove that "lyceum" acquired
secondary meaning capable of exclusive appropriation. Petitioner also failed to establish
Petitioner reserved with the SEC its corporate name De La Salle Montessori International that the term "De La Salle" is generic for the principle enunciated in Lyceum of the
Malolos, Inc. from June 4 to August 3, 2007,6 after which the SEC indorsed petitioner's Philippines to apply.18
articles of incorporation and by-laws to the Department of Education (DepEd) for comments
and recommendation.7 The DepEd returned the indorsement without Petitioner consequently filed a petition for review with the CA. On September 27, 2012, the
objections.8 Consequently, the SEC issued a certificate of incorporation to petitioner.9 CA rendered its Decision19 affirming the Order of the SEC OGC and the Decision of the
SEC En Banc in toto.
Afterwards, DepEd Region III, City of San Fernando, Pampanga granted petitioner
government recognition for its pre-elementary and elementary courses on June 30, Hence, this petition, which raises the lone issue of "[w]hether or not the [CA] acted with
2008,10 and for its secondary courses on February 15, 2010.11 grave abuse of discretion amounting to lack or in excess of jurisdiction when it erred in not
applying the doctrine laid down in the case of [Lyceum of the Philippines], that LYCEUM is
On January 29, 2010, respondents De La Salle Brothers, Inc., De La Salle University, Inc., not attended with exclusivity."20
La Salle Academy, Inc., De La Salle-Santiago Zobel School, Inc. (formerly De La Salle-
South, Inc.), and De La Salle Canlubang, Inc. (formerly De La Salle University-Canlubang, The Court cannot at the outset fail to note the erroneous wording of the issue. Petitioner
Inc.) filed a petition with the SEC seeking to compel petitioner to change its corporate name. alleged grave abuse of discretion while also attributing error of judgment on the part of the
Respondents claim that petitioner's corporate name is misleading or confusingly similar to CA in not applying a certain doctrine. Certainly, these grounds do not coincide in the same
that which respondents have acquired a prior right to use, and that respondents' consent to remedy. A petition for review on certiorari under Rule 45 of the Rules of Court is a separate
use such name was not obtained. According to respondents, petitioner's use of the remedy from a petition for certiorari under Rule 65. A petition for review on certiorari under
dominant phrases "La Salle" and "De La Salle" gives an erroneous impression that De La Rule 45 brings up for review errors of judgment, while a petition for certiorari under Rule 65
Salle Montessori International of Malolos, Inc. is part of the "La Salle" group, which violates covers errors of jurisdiction or grave abuse of discretion amounting to excess or lack of
Section 18 of the Corporation Code of the Philippines. Moreover, being the prior registrant, jurisdiction. Grave abuse of discretion is not an allowable ground under Rule
respondents have acquired the use of said phrases as part of their corporate names and 45.21 Nonetheless, as the petition argues on the basis of errors of judgment allegedly
have freedom from infringement of the same.12 committed by the CA, the Court will excuse the error in terminology.

On May 12, 2010, the SEC OGC issued an Order13 directing petitioner to change or modify The main thrust of the petition is that the CA erred in not applying the ruling in the Lyceum
its corporate name. It held, among others, that respondents have acquired the right to the of the Philippines case which petitioner argues have "the same facts and events"22 as in this
exclusive use of the name "La Salle" with freedom from infringement by priority of adoption, case.
as they have all been incorporated using the name ahead of petitioner. Furthermore, the
name "La Salle" is not generic in that it does not particularly refer to the basic or inherent We DENY the petition and uphold the Decision of the CA.
 confusing or contrary to existing law.32
As early as Western Equipment and Supply Co. v. Reyes,23 the Court declared that a
corporation's right to use its corporate and trade name is a property right, a right in rem, With respect to the first requisite, the Court has held that the right to the exclusive use of a
which it may assert and protect against the world in the same manner as it may protect its corporate name with freedom from infringement by similarity is determined by priority of
tangible property, real or personal, against trespass or conversion.24 It is regarded, to a adoption.33
certain extent, as a property right and one which cannot be impaired or defeated by
subsequent appropriation by another corporation in the same field.25 Furthermore, in Philips In this case, respondents' corporate names were registered on the following dates: (1) De
Export B.V. v. Court of Appeals,26 we held: La Salle Brothers, Inc. on October 9, 1961 under SEC Registration No. 19569; (2) De La
Salle University, Inc. on December 19, 1975 under SEC Registration No. 65138; (3) La
A name is peculiarly important as necessary to the very existence of a corporation x x x. Its Salle Academy, Inc. on January 26, 1960 under SEC Registration No. 16293; (4) De La
name is one of its attributes, an element of its existence, and essential to its identity x x x. SalleSantiago Zobel School, Inc. on October 7, 1976 under SEC Registration No. 69997;
The general rule as to corporations is that each corporation must have a name by which it is and (5) De La Salle Canlubang, Inc. on August 5, 1998 under SEC Registration No. Al998-
to sue and be sued and do all legal acts. The name of a corporation in this respect 01021.34
designates the corporation in the same manner as the name of an individual designates the
person x x x; and the right to use its corporate name is as much a part of the corporate On the other hand, petitioner was issued a Certificate of Registration only on July 5, 2007
franchise as any other privilege granted x x x. under Company Registration No. CN200710647.35 It being clear that respondents are the
prior registrants, they certainly have acquired the right to use the words "De La Salle" or "La
A corporation acquires its name by choice and need not select a name identical with or Salle" as part of their corporate names.
similar to one already appropriated by a senior corporation while an individual's name is
thrust upon him x x x. A corporation can no more use a corporate name in violation of the The second requisite is also satisfied since there is a confusing similarity between
rights of others than an individual can use his nan1e legally acquired so as to mislead the petitioner's and respondents' corporate names. While these corporate names are not
public and injure another x x x.27 identical, it is evident that the phrase "De La Salle" is the dominant phrase used.

Recognizing the intrinsic importance of corporate names, our Corporation Code established Petitioner asserts that it has the right to use the phrase "De La Salle" in its corporate name
a restrictive rule insofar as corporate names are concerned.28 Thus, Section 18 thereof as respondents did not obtain the right to its exclusive use, nor did the words acquire
provides: secondary meaning. It endeavoured to demonstrate that no confusion will arise from its use
Sec. 18. Corporate name. - No corporate name may be allowed by the Securities and of the said phrase by stating that its complete name, "De La Salle Montessori International
Exchange Commission if the proposed name is identical or deceptively or confusingly of Malolos, Inc.," contains four other distinctive words that are not found in respondents'
similar to that of any existing corporation or to any other name already protected by law or is corporate names. Moreover, it obtained the words "De La Salle" from the French word
patently deceptive, confusing or contrary to existing laws. When a change in the corporate meaning "classroom," while respondents obtained it from the French priest named Saint
name is approved, the Commission shall issue an amended certificate of incorporation Jean Baptiste de La Salle. Petitioner also compared its logo to that of respondent De La
under the amended name. Salle University and argued that they are different. Further, petitioner argued that it does not
The policy underlying the prohibition in Section 18 against the registration of a corporate charge as much fees as respondents, that its clients knew that it is not part of respondents'
name which is "identical or deceptively or confusingly similar" to that of any existing schools, and that it never misrepresented nor claimed to be an affiliate of respondents.
corporation or which is "patently deceptive" or "patently confusing" or "contrary to existing Additionally, it has gained goodwill and a name worthy of trust in its own right.36
laws," is the avoidance of fraud upon the public which would have occasion to deal with the
entity concerned, the evasion of legal obligations and duties, and the reduction of difficulties We are not persuaded.
of administration and supervision over corporations.29
In determining the existence of confusing similarity in corporate names, the test is whether
Indeed, parties organizing a corporation must choose a name at their peril; and the use of a the similarity is such as to mislead a person using ordinary care and discrimination. In so
name similar to one adopted by another corporation, whether a business or a non-profit doing, the Court must look to the record as well as the names themselves.37
organization, if misleading or likely to injure in the exercise of its corporate functions,
regardless of intent, may be prevented by the corporation having a prior right, by a suit for Petitioner's assertion that the words "Montessori International of Malolos, Inc." are four
injunction against the new corporation to prevent the use of the name.30 distinctive words that are not found in respondents' corporate names so that their corporate
name is not identical, confusingly similar, patently deceptive or contrary to existing
In Philips Export B.V. v. Court of Appeals,31 the Court held that to fall within the prohibition of laws,38 does not avail. As correctly held by the SEC OGC, all these words, when used with
Section 18, two requisites must be proven, to wit: (1) that the complainant corporation the name "De La Salle," can reasonably mislead a person using ordinary care and
acquired a prior right over the use of such corporate name; and (2) the proposed name is discretion into thinking that petitioner is an affiliate or a branch of, or is likewise founded by,
either: (a) identical, or (b) deceptively or confusingly similar to that of any existing any or all of the respondents, thereby causing confusion.39
corporation or to any other name already protected by law; or (c) patently deceptive,
Petitioner's argument that it obtained the words "De La Salle" from the French word In that case, the Lyceum of the Philippines, Inc., an educational institution registered with
meaning "classroom," while respondents obtained it from the French priest named Saint the SEC, commenced proceedings before the SEC to compel therein private respondents
Jean Baptiste de La Salle,40 similarly does not hold water. We quote with approval the ruling who were all educational institutions, to delete the word "Lyceum" from their corporate
of the SEC En Banc on this matter. Thus: names and permanently enjoin them from using the word as part of their respective names.
Generic terms are those which constitute "the common descriptive name of an article or
substance," or comprise the "genus of which the particular product is a species," or are The Court there held that the word "Lyceum" today generally refers to a school or institution
"commonly used as the name or description of a kind of goods," or "characters," or "refer to of learning. It is as generic in character as the word "university." Since "Lyceum" denotes a
the basic nature of the wares or services provided rather than to the more idiosyncratic school or institution of learning, it is not unnatural to use this word to designate an entity
characteristics of a particular product," and are not legally protectable. It has been held that which is organized and operating as an educational institution. Moreover, the Lyceum of the
if a mark is so commonplace that it cannot be readily distinguished from others, then it is Philippines, Inc.'s use of the word "Lyceum" for a long period of time did not amount to
apparent that it cannot identify a particular business; and he who first adopted it cannot be mean that the word had acquired secondary meaning in its favor because it failed to prove
injured by any subsequent appropriation or imitation by others, and the public will not be that it had been using the word all by itself to the exclusion of others. More so, there was no
deceived. evidence presented to prove that the word has been so identified with the Lyceum of the
Philippines, Inc. as an educational institution that confusion will surely arise if the same
Contrary to [petitioner's] claim, the word salle only means "room" in French. The word la, on word were to be used by other educational institutions.47
the other hand, is a definite article ("the") used to modify salle. Thus, since salle is nothing
more than a room, [respondents'] use of the term is actually suggestive. Here, the phrase "De La Salle" is not generic in relation to respondents. It is not descriptive
of respondent's business as institutes of learning, unlike the meaning ascribed to "Lyceum."
A suggestive mark is therefore a word, picture, or other symbol that suggests, but does not Moreover, respondent De La Salle Brothers, Inc. was registered in 1961 and the De La
directly describe something about the goods or services in connection with which it is used Salle group had been using the name decades before petitioner's corporate registration. In
as a mark and gives a hint as to the quality or nature of the product. Suggestive trademarks contrast, there was no evidence of the Lyceum of the Philippines, Inc.'s exclusive use of the
therefore can be distinctive and are registrable. word "Lyceum," as in fact another educational institution had used the word 17 years before
the former registered its corporate name with the SEC. Also, at least nine other educational
The appropriation of the term "la salle" to associate the words with the lofty ideals of institutions included the word in their corporate names. There is thus no similarity between
education and learning is in fact suggestive because roughly translated, the words only the Lyceum of the Philippines case and this case that would call for a similar ruling.
mean "the room." Thus, the room could be anything - a room in a house, a room in a
building, or a room in an office. The enforcement of the protection accorded by Section 18 of the Corporation Code to
corporate names is lodged exclusively in the SEC. By express mandate, the SEC has
xxx absolute jurisdiction, supervision and control over all corporations. It is the SEC's duty to
prevent confusion in the use of corporate names not only for the protection of the
In fact, the appropriation by [respondents] is fanciful, whimsical and arbitrary because there corporations involved, but more so for the protection of the public. It has authority to de-
is no inherent connection between the words la salle and education, and it is through register at all times, and under all circumstances, corporate names which in its estimation
[respondents'] painstaking efforts that the term has become associated with one of the top are likely to generate confusion.48
educational institutions in the country. Even assuming arguendo that la salle means
"classroom" in French, imagination is required in order to associate the term with an Clearly, the only determination relevant to this case is that one made by the SEC in the
educational institution and its particular brand of service.41 exercise of its express mandate under the law.49
We affirm that the phrase "De La Salle" is not merely a generic term. Respondents' use of Time and again, we have held that findings of fact of quasi-judicial agencies, like the SEC,
the phrase being suggestive and may properly be regarded as fanciful, arbitrary and are generally accorded respect and even finality by this Court, if supported by substantial
whimsical, it is entitled to legal protection.42 Petitioner's use of the phrase "De La Salle" in its evidence, in recognition of their expertise on the specific matters under their consideration,
corporate name is patently similar to that of respondents that even with reasonable care and more so if the same has been upheld by the appellate court, as in this case.50
observation, confusion might arise. The Court notes not only the similarity in the parties'
names, but also the business they are engaged in. They are all private educational WHEREFORE, the Petition is DENIED. The assailed Decision of the CA dated September
institutions offering pre-elementary, elementary and secondary courses.43 As aptly observed 27, 2012 is AFFIRMED.
by the SEC En Banc, petitioner's name gives the impression that it is a branch or affiliate of
respondents.44 It is settled that proof of actual confusion need not be shown. It suffices that SO ORDERED.
confusion is probable or likely to occur.45

Finally, the Court's ruling in Lyceum of the Philippines46 does not apply.