1 DE LA SALLE MONTESSORI INTERNATIONAL V DE LA SALLE BROTHERS INC.
Exchange Commission if the proposed name is identical or deceptively or confusingly
GR No. 205548
By: IÑIGO UNTALAN
Topic: Incorporation And Registration Of Corporations
Ponente:
FACTS:
 De La Salle Montessori International of Malolos (DLSMIM) reserved its corporate name
to the SEC, which indorsed DLSMIM’s articles of incorporation and by-laws to the DepEd
for comments and recommendation
o DepEd returned the indorsement without objection
o SEC issued a Certificate of Incorporation to DLSMIM
 DepEd Reg. III granted DLSMIM recognition for tis pre-elementary and elementary
courses and for it secondary courses
 De La Salle Brothers, Inc., De La Salle University Inc., La Salle Academy, Inc., De La Salle-
Santiago Zobel School, Inc., and De La Salle Canlubang, Inc. filed a petitioner with SEC
o Seeks to compel petitioner to change its corporate name
o DLSMIM’s name is misleading or confusingly similar to that which respondents
have acquired a prior right to use
o Use of dominant phrases “La Salle” gives the impression that DLSMIM is part
of the “La Salle” group
 SEC OGC ordered DLSMIM to change or modify its corporate name
o “La Salle” is not generic in the sense that it does not particularly refer to the
basic or inherent nature of the services provided by respondents
 Neither is is descriptive in the sense that id conveys an immediate
idea of what respondents’ services are
 DLSMIM cite the case of Lyceum of the Philippines, Inc., v Court of Appeals wherein the
court said that “Lyceum” is clearly descriptive of the very being and defining purpose of
an educational corporation; it is a generic word that pertains to a category of
educational institutions and is widely used around the world; Lyceum of the Phils. Failed
to prove that “Lyceum” acquired secondary meaning capable of exclusive appropriation
ISSUE: Whether the use of “De La Salle” “La Salle” in DLSMIM’s corporate name is valid –
whether the use warrants the application of the doctrine laid down by the Lyceum case
HELD/RATIO:
 A corporation’s right to use its corporate and trade name is a property right—a right in
rem
o It may assert and protect it against the world
o A name is one of the corporation’s attributes, an element of its existence, and
essential to its identity
o Each corporation must have a name by which it is to sue and be sued and do
all legal acts
 Enforcement of the protection accorded by Sec. 18 is lodged exclusively in the SEC
o SEC has absolute jurisdiction, supervision and control over all corporations; it
is its duty to prevent confusion in the use of corporate names, not only for the
protection of the corporations involved but more so for the protection of the
public
Sec. 18. Corporate name. — No corporate name may be allowed by the Securities and
similar to that of any existing corporation or to any other name already protected by law
or is patently deceptive, confusing or contrary to existing laws. When a change in the
corporate name is approved, the Commission shall issue an amended certificate of
incorporation under the amended name.
 The prohibition is for—
o The avoidance of fraud upon the public
o Evasion of legal obligations and duties
o Reduction of difficulties of administration and supervision over corporations
 The use of a similar name to one adopted by another corporation, 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
o Prevent via suit for injunction
 Requisites of Sec. 18
o Complainant Corporation acquired a prior right over the use of such corporate
name
o The Proposed name is either:
 Identical
 Deceptively or confusingly similar to that of any existing corporation
 Deceptively or confusingly similar to that of any existing corporation
or to any other name already protected by law
 Patently deceptive, confusing or contrary to existing law
o Test: Whether the similarity is such as to mislead a person using ordinary care
and discrimination
 Respondents’ corporate names were registered prior to that of DLSMIM
o Respondents have acquired the right to use the words “De La Salle” or “La
Salle” being prior registrants
 There is confusing similarity between DLSMIM and respondents’ corporate names
o A similarity exists also in the business they are engaged in
o DLSMIM’s name gives the impression that it is a branch or affiliate of
respondents
o Actual proof of confusion is not necessary, the probability or likelihood of
confusion is sufficient
 Other arguments of DLSMIM:
o Respondents did not obtain the right to exclusive use
o Words did not acquire secondary meaning
o La Salle is a generic terms
 “De La Salle” is not merely a generic term
o That there are four other distinctive words that are not found in respondents’
names (Montessori International of Malolos, Inc.)
 All those words when coupled with “De La Salle” will still deceive or
is still confusingly similar
o Schools have different logos, charge students differently
o Claims that it had never misrepresented nor claimed to be an affiliate of
respondents
o That it had gained goodwill and a name worthy of trust in its own right