The Philippine First Insurance Co. sued defendants for failing to pay a promissory note. Defendants claimed they signed the note for a different company. The court ruled that a corporation can change its name without becoming a new entity, as long as it follows the legal process to amend its articles. The identity and obligations of the corporation remain the same after a name change. Therefore, Philippine First Insurance could bring the suit using its new name, even though the note was signed under its old name, since it was still the same corporation.
The Philippine First Insurance Co. sued defendants for failing to pay a promissory note. Defendants claimed they signed the note for a different company. The court ruled that a corporation can change its name without becoming a new entity, as long as it follows the legal process to amend its articles. The identity and obligations of the corporation remain the same after a name change. Therefore, Philippine First Insurance could bring the suit using its new name, even though the note was signed under its old name, since it was still the same corporation.
The Philippine First Insurance Co. sued defendants for failing to pay a promissory note. Defendants claimed they signed the note for a different company. The court ruled that a corporation can change its name without becoming a new entity, as long as it follows the legal process to amend its articles. The identity and obligations of the corporation remain the same after a name change. Therefore, Philippine First Insurance could bring the suit using its new name, even though the note was signed under its old name, since it was still the same corporation.
The Philippine First Insurance Co. sued defendants for failing to pay a promissory note. Defendants claimed they signed the note for a different company. The court ruled that a corporation can change its name without becoming a new entity, as long as it follows the legal process to amend its articles. The identity and obligations of the corporation remain the same after a name change. Therefore, Philippine First Insurance could bring the suit using its new name, even though the note was signed under its old name, since it was still the same corporation.
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1. Philippine First Insurance Co., Inc. v. Maria Carmen Hartigan, et. al.
, 7 SCRA 252
FACTS: On June 1, 1953, plaintiff was originally named as 'The Yek Tong Lin Fire and Marine Insurance Co., Ltd’ an insurance corp. duly presented with the Security and Exchange Commissioner and before a Notary Public as provided in their articles of incorporation. Later amended its articles of incorporation and changed its name on May 26, 1961 as ‘Philippine First Insurance Co., Inc.’ pursuant to a certificate of the Board of Directors. The complaint alleges that: Philippine First Insurance Co., Inc., doing business under the name of 'The Yek Tong Lin Fire and Marine Insurance Co., Lt.' signed as co-maker together with defendant Maria Carmen Hartigan, CGH, to which a promissory note was made in favour of China Banking. Said defendant failed to pay in full despite renewal of such note. The complaint ends with a prayer for judgment against the defendants, jointly and severally, for the sum of P4,559.50 with interest at the rate of 12% per annum from November 23, 1961 plus P911.90 by way of attorney's fees and costs. Defendants admitted the execution of the indemnity agreement but they claim that they signed said agreement in favor of the Yek Tong Lin Fire and Marine Insurance Co., Ltd.' and not in favor of the plaintiff Philippine Insurance. They likewise admit that they failed to pay the promissory note when it fell due but they allege that since their obligation with the China Banking Corporation based on the promissory note still subsists, the surety who co-signed the promissory note is not entitled to collect the value thereof from the defendants otherwise they will be liable for double amount of their obligation, there being no allegation that the surety has paid the obligation to the creditor. In their special defense, defendants claim that there is no privity of contract between the plaintiff and the defendants and consequently, the plaintiff has no cause of action against them, considering that the complaint does not allege that the plaintiff and the 'Yek Tong Lin Fire and Marine Insurance Co., Ltd.' are one and the same or that the plaintiff has acquired the rights of the latter.
ISSUE: May a Philippine corporation change its name and still retain its original personality and individuality as such?
RULING: YES. As can be gleaned under Sections 6 and 18 of the Corporation Law, the name of a corporation is peculiarly important as necessary to the very existence of a corporation. The general rule as to corporations is that each corporation shall have a name by which it is to sue and be sued and do all legal acts. The name of a corporation in this respect designates the corporation in the same manner as the name of an individual designates the person." Since an individual has the right to change his name under certain conditions, there is no compelling reason why a corporation may not enjoy the same right. There is nothing sacrosanct in a name when it comes to artificial beings. The sentimental considerations which individuals attach to their names are not present in corporations and partnerships. Of course, as in the case of an individual, such change may not be made exclusively. by the corporation's own act. It has to follow the procedure prescribed by law for the purpose; and this is what is important and indispensably prescribed — strict adherence to such procedure. A general power to alter or amend the charter of a corporation necessarily includes the power to alter the name of the corporation. Hence, a mere change in the name of a corporation, either by the legislature or by the corporators or stockholders under legislative authority, does not, generally speaking, affect the identity of the corporation, nor in any way affect the rights, privileges, or obligations previously acquired or incurred by it. Indeed, it has been said that a change of name by a corporation has no more effect upon the identity of the corporation than a change of name by a natural person has upon the identity of such person. The corporation, upon such change in its name, is in no sense a new corporation, nor the successor of the original one, but remains and continues to be the original corporation. It is the same corporation with a different name, and its character is in no respect changed. ... (6 Fletcher, Cyclopedia of the Law of Private Corporations, 224-225, citing cases.) As correctly pointed out by appellant, the approval by the stockholders of the amendment of its articles of incorporation changing the name "The Yek Tong Lin Fire & Marine Insurance Co., Ltd." to "Philippine First Insurance Co., Inc." on March 8, 1961, did not automatically change the name of said corporation on that date. To be effective, Section 18 of the Corporation Law, earlier quoted, requires that "a copy of the articles of incorporation as amended, duly certified to be correct by the president and the secretary of the corporation and a majority of the board of directors or trustees, shall be filed with the Securities & Exchange Commissioner", and it is only from the time of such filing, that "the corporation shall have the same powers and it and the members and stockholders thereof shall thereafter be subject to the same liabilities as if such amendment had been embraced in the original articles of incorporation." It goes without saying then that appellant rightly acted in its old name when on May 15, 1961, it entered into the indemnity agreement, Annex A, with the defendant-appellees; for only after the filing of the amended articles of incorporation with the Securities & Exchange Commission on May 26, 1961, did appellant legally acquire its new name; and it was perfectly right for it to file the present case In that new name on December 6, 1961. Such is, but the logical effect of the change of name of the corporation upon its actions. Therefore, actions brought by a corporation after it has changed its name should be brought under the new name although for the enforcement of rights existing at the time the change was made. The change in the name of the corporation does not affect its right to bring an action on a note given to the corporation under its former name.
