8/19/2019 Universal Mills Corp v Textile Mills

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UNIVERSAL MILLS CORP. v TEXTILE MILLS (1977)

• "Universal Textile Mills" was organized on Dec 1953

• Another company, "Universal Hosiery Mills Corporation" (organized Oct 1954) manufactured hosiery and

wearing apparel. It amended its articles of incorporation changing its name to Universal Mills Corporation

• Fire razed Universal Textile Mills' factory in Pasig.

• Petitioner Universal Mills alleged that as a result of the fire and because of news items appearing in

various newspapers, it created uncertainty and confusion among its bankers, stockholders and

customers. Petitioner filed said complaint to change corporate name.

SEC: Ordered Universal Mills to change its name on ground of being confusingly and deceptively

similar. Going further:

"This SEC further takes cognizance of the fact that when the company filed the amendmentchanging its name to Universal Mills Corporation, it filed a written undertaking.. signed by its

President, Mr. Cokiat, promising to change its name in the event that there is another person, firm

or entity who has obtained a prior right to the use of such name or one similar to it. That promise

is still binding upon the corporation & its responsible officers.

ISSUE: Whether or not the SEC order directing petitioner to change its corporate name, considering the

facts found by the Commission, constitute grave abuse of discretion.

HELD: NO.

The corporate names in question are not identical, but they are indisputably so similar that even under the

test of "reasonable care and observation as the public generally are capable of using and may be

expected to exercise" invoked by appellant, SC is concerned confusion will usually arise…

SC cannot perceive why of all names, UMC had to choose a name already being used by another firm

engaged in practically the same business for more than a decade enjoying well earned patronage and

goodwill, when there are so many other appropriate names it could possibly adopt without arousing any

suspicion as to its motive and, more importantly, any degree of confusion in the mind of the public which

could mislead even its own customers, existing or prospective. Premises considered, there is no warrant

for the interference of the court. SEC Order valid.

It is within the competence of the SEC to resolve in the first instance, the exercise of the

 jurisdiction under the law to administer the application and enforcement of all laws affecting

domestic corporations and associations, reserving to the courts only conflicts of judicial nature,

and, of course, the SC's authority for review for possible cases of denial of due process and grave

abuse of discretion.