FACTS The corporate names in question are not identical, but they are

indisputably so similar that even under the test of "reasonable care and
Respondent Universal Textile Mills was organized on December 29 1953, as
observation as the public generally are capable of using and may be
a textile manufacturing firm and was issued a certificate of registration on
expected to exercise" invoked by appellant, We are apprehensive
January 8 1954. Petitioner on the other hand, was registered on October
confusion will usually arise, considering that under the second
27 1954, under its original name Universal Hosiery Mills Corporation, which
amendment of its articles of incorporation on August 14 1964, appellant
primary purpose is the “manufacture and production of hosieries and
included among its primary purposes the "manufacturing, dyeing, finishing
wearing apparel of all kinds”. On May 24 1963, Petitioner filed an
and selling of fabrics of all kinds" in which respondent had been engaged
amendment to its Articles of Incorporation changing its name to Universal
for more than a decade ahead of petitioner.
Mills Corporation, and was approved by the SEC on June 10 1963.
Factually, the Commission found existence of such confusion, and there is
Petitioner’s spinning mills located in Pasig was gutted by fire. Respondent’s
evidence to support its conclusion. Since respondent is not claiming
alleged that as a result of such fire, and because of the similarity of the
damages in this proceeding, it is, of course, immaterial whether or not
Respondent’s name to theirs, various news items appearing in newspapers
appellant has acted in good faith, but We cannot perceive why of all
carrying reports on the fire created uncertainty and confusion among the
names, it had to choose a name already being used by another firm
Respondent’s bankers, friends, stockholders, and customers, prompting
engaged in practically the same business for more than a decade
the Respondent to clarify the real identity of the Corporation whose
enjoying well-earned patronage and goodwill, when there are so many
property was burned. Petitioner’s contend that the names are not similar
other appropriate names it could possibly adopt without arousing any
and even if there be some similarity, it is not confusing or deceptive. The
suspicion as to its motive and, more importantly, any degree of confusion
inclusion of the word textile is dominant and prominent enough to
in the mind of the public which could mislead even its own customers,
distinguish the two.
existing or prospective. Premises considered, there is no warrant for our
The Commission ruled on the matter and enjoined the Petitioner from interference. PETITION DENIED.
further using its present Corporate name, Universal Mills Corporation, as
confusion was not only apparent, but possible. As such, it was the
Commission’s duty to prevent such confusion at all times an under all
circumstances not only for the purpose of protecting the corporations
involved, but more so the public.

ISSUE: WON the SEC committed grave abuse of discretion in enjoining the
Petitioner from using its corporate name, Universal Mills Corporation

RULING

We believe it is not. Indeed, it cannot be said that the impugned order is

arbitrary and capricious. Clearly, it has rational basis.