ARMCO STEEL CORPORATION (OF THE PHILIPPINES), PETITIONER, VS. SECURITIES AND EXCHANGE COMMISSION, ARMCO STEEL CORPORATION (OF OHIO, U.S.A.) AND ARMCO MARSTEEL ALLOY CORPORATION,…

On July 1, 1965 ARMCO Steel Corporation, a corporation organized
in Ohio, U.S.A., hereinafter called ARMCO-OHIO, obtained from the Philippine
Patent Office, Certificate of Registration No. 11750 for its trademark
consisting of the word “ARMCO” and a triangular device for
“ferrous metals and ferrous metal castings and forgings”.  On April
14, 1971, pursuant to trademark rules, the petitioner filed with
the said patent office an “Affidavit of Use” for said trademark,
which was subsequently accepted and for which the Patent Office issued the
corresponding notice of acceptance of “Affidavit of Use”.

ARMCO Marsteel-Alloy Corporation was
also incorporated on July 11, 1972
under its original name Marsteel Alloy Company, Inc.
but on March 28, 1973 its
name was changed to ARMCO-Marsteel Alloy Corporation
hereinafter called ARMCO-Marsteel, by amendment of
its Articles of Incorporation after the ARMCO-Ohio purchased 40% of its capital
stock.  Both said corporations are
engaged in the manufacture of steel products. 
Its article of incorporation in part reads as follows as to its
purposes:  “to manufacture, process
x x x x
and deal in all kinds, form, and combinations of iron, steel or other metals
and all or any products or articles particularly consisting of iron, steel or
other metals x x x x.”

On the other hand ARMCO Steel Corporation was incorporated in the
Philippines on April 25, 1973, hereinafter called
ARMCO-Philippines.  A pertinent portion
of its articles of incorporation provides as among its purposes:  “to contract, fabricate x x x manufacture x x x regarding pipelines, steel
frames x x x.”

ARMCO-Ohio and ARMCO-Marsteel then
filed a petition in the Securities and Exchange Commission (SEC) to compel
ARMCO-Philippines to change its corporate name on the ground that it is very
similar, if not exactly the same as the name of one of the petitioners, which
is docketed as SEC Case No. 1187.  In due
course an order was issued by the SEC on February 14, 1975 granting the petition, the dispositive part of which reads as follows:

“In view of the foregoing, the respondent, ARMCO STEEL
CORPORATION, is hereby ordered to take out ‘ARMCO’ and substitute another word
in lieu thereof in its corporate name by amending the articles of incorporation
to that effect, within thirty (30) days from date of receipt of a copy of this
Order; after which, three (3) copies of the amended articles of incorporation,
duly certified by a majority of the board of directors and countersigned by the
president and secretary of the corporation, shall be submitted to this
Commission, together with the corresponding filing fees, as required by
law.”^[1]

A motion for reconsideration of the said order was filed by said
respondent on March 6, 1975
but this was denied in an order of April
16, 1965 as the motion was filed out of time, a copy of the
questioned order having been received by respondent on February 18, 1975 so that said order had become
final and executory.^[2] A
motion for reconsideration filed by respondent to set aside said order of April 16, 1965 was also denied by the
SEC on June 23, 1975.^[3]
An appeal was interposed by respondent to the Court of Appeals which was
docketed as CA-G.R. No. 04448-R but the appeal was dismissed in a resolution of
January 13, 1976, on the ground that the appeal was perfected beyond the reglementary period allowed by law.

On March 22, 1976
said respondent amended its articles of incorporation by changing its name to
“ARMCO structures, Inc.” which was filed with and approved by the
SEC.

Nevertheless, in an order of January 6, 1977, the SEC issued an order requiring
respondent, its directors and officers to comply with the aforesaid order of
the Commission of February 14, 1975
within ten (10) days from notice thereof.5

A manifestation and motion was filed by respondent informing SEC
that it had already changed its corporate name with the approval of the SEC to
ARMCO Structures, Inc. in substantial compliance with the said order or in the
alternative prayed for a hearing to determine if there is a confusing
similarity between the names of the petitioners on one hand and the ARMCO
Structures, Inc. on the other.

Petitioners then filed a comment to said manifestation alleging
that the change of name of said respondent was not done in good faith and is
not in accordance with the order of the Commission of February 14, 1975 so that drastic action should
be taken against the respondent and its officers.  Subsequently, petitioners filed a motion to
cite said respondent, its directors and officers in contempt for disobeying the
orders of February 14, 1975
and January 6, 1977.  In an order of August 31, 1977, the SEC finding that the respondent, its
directors, and officers have not complied with the final order of February 14, 1975 required them to
appear before the Commission on September
22, 1977 at 10:00 o’clock
in the morning to show cause why they should not be punished for contempt by
the Commission.6

After the hearing the parties submitted their respective
memoranda.  In another order of January
17, 1979, the SEC finding that the respondent did not make the proper
disclosure of the circumstances when it amended its articles of incorporation
and submitted the same for the approval of the SEC thus said respondent, its
directors, and officers were ordered within ten (10) days from notice to comply
with the order of February 14, 1975.  An
appeal was interposed by the respondent to the SEC en banc.  The Commission en banc in an
order of December 14, 1979
dismissed the appeal for lack of merit.7

Hence, the herein petition for review filed by ARMCO-Philippines
wherein it seeks the reversal of the orders of the SEC of December 14, 1979 and
August 6, 1980 and that the order of February 14, 1975 be declared functus oficio for
having been substantially complied with by the petitioner.  The grounds of the petition are as follows:

“I

THE SECURITIES AND EXCHANGE COMMISSION
ERRED WHEN IT DID NOT CONSIDER ITS ORDER DATED FEBRUARY 14, 1975 FUNCTUS
OFFICIO PURSUANT TO THE LEGAL MAXIM ‘CESSANTE LEGIS RATIONE
CESSAT ET IPSA LEX’ AFTER PETITIONER HAD
SUBSTANTIALLY COMPLIED IN GOOD FAITH WITH SAID ORDER AND SAID COMPLIANCE HAD
ACHIEVED THE PURPOSE OF THE ORDER, BY CHANGING ITS CORPORATE NAME WITH THE
APPROVAL OF SAID COMMISSION.

II

THE COMMISSION ERRED WHEN IT DID NOT FIND
THAT ITS APPROVAL OF PETITIONER’S AMENDED ARTICLES OF INCORPORATION CHANGING
PETITIONER’S CORPORATE NAME FROM “ARMCO STEEL CORPORATION” TO
“ARMCO STRUCTURES, INCORPORATED” WAS REGULAR AND LEGAL.

III

THE COMMISSION ERRED WHEN IT DID NOT FIND
THAT PRIVATE RESPONDENTS WERE NO LONGER ENTITLED TO THE RELIEF AWARDED BY THE
ORDER DATED FEBRUARY 14, 1975
CONSIDERING THAT SAID ORDER HAD BECOME FUNCTUS OFFICIO AND
FURTHER ENFORCEMENT THEREOF WILL BE INEQUITABLE AS IT WILL DEPRIVE PETITIONER
OF EQUAL PROTECTION OF LAWS.

IV

THE COMMISSION ERRED WHEN, THERE BEING A
DISPUTE AS TO WHETHER OR NOT THE PURPOSE OF THE ORDER DATED FEBRUARY 14, 1975
HAD BEEN COMPLIED WITH AND WHETHER THERE WAS STILL CONFUSING SIMILARITY BETWEEN
THE CORPORATE NAMES OF RESPONDENTS AND THE NEW NAME OF PETITIONER, IT DID NOT
GRANT PETITIONER’S PRAYER THAT A HEARING BE HELD TO THRESH THE ISSUE.”

The Court finds no merit in the petition.

The order of the public respondent SEC of February 14, 1975 which
has long become final and executory clearly spells
out that petitioner must “take out ARMCO and substitute another word in
lieu thereof in its corporate name by amending the articles of incorporation to
that effect, x x x.”
Far from complying with said order petitioner amended its corporate name into
ARMCO Structures, Inc., and secured its approval by the SEC on March 22, 1976.  That this amendment was made by petitioner
without the knowledge of the proper authorities of the SEC is borne by the fact
that thereafter on January 6, 1977
an order was issued by the SEC requiring petitioner, its board of directors,
and officers to comply with the order of the Commission of February 14, 1975.  When the attention of the SEC was called by
petitioner that the change of corporate name had been undertaken by it to ARMCO
Structures, Inc. and asked that it be considered as a substantial compliance
with the order of February 14, 1975, the SEC in its order of January 17, 1979
speaking through its hearing officer Antonio R. Manabat
ruled as follows:

“The Order of February
14, 1975, cannot but be clearer than what it purports to require or
demand from respondent.  Under in no
distinct terms, it enjoins the removal or deletion of
the word ‘Armco’ from respondent’s corporate
name, which was not so complied with. 
The Commission, therefore, cannot give its imprimatur to the new
corporate name because there was no compliance at all.

The fact that the Securities and Exchange Commission issued its
certificate of filing of amended articles of incorporation on March 22, 1976, is nothing but an
illusory approval of the change of corporate name and a self-induced protection
from the Commission to further exact compliance of the Order of February 14, 1975.  Craftily, the Securities and Exchange
Commission and/or its administrative personnel were made to issue such
certificate during its unguarded moment. 
Verily, the certificate could not have been issued were it not for such
lapses or had respondent been in good faith by making the proper disclosures of
the circumstances which led it to amend its articles of incorporation.

Correctly pointed out by petitioners, a ‘new determination’ as to
whether or not there is confusing similarity between petitioners’ names and
that of ‘Armco Structures, Incorporated’, cannot be ordered without transgression
on the rule of, or the decisional law on, finality of judgment.”8

The Court finds that the said amendment in the corporate name of
petitioner is not in substantial compliance with the order of February 14, 1975.  Indeed it is in contravention therewith.  To repeat, the order was for the removal of
the word “ARMCO” from the corporate name of the petitioner which it
failed to do.  And even if this change of
corporate name was erroneously accepted and approved in the SEC it cannot
thereby legalize nor change what is clearly unauthorized if not contemptuous
act of petitioner in securing the registration of a new corporate name against
the very order of the SEC of February 14, 1975. 
Certainly the said order of February
14, 1975 is not rendered functus oficio thereby. 
Had petitioner revealed at the time of the registration of its amended
corporate name that there was the said order, the registration of the amended
corporate name could not have been accepted and approved by the persons
in-charge of the registration.  The
actuations in this respect of petitioner are far from regular much less in good
faith.

The arguments of the petitioner that the SEC had approved the
registration of several other entities with one principal word common to all as
“ARMCO”, and that there is no confusing similarity between the
corporate names of respondents and the new name of petitioner, would indeed in
effect be re-opening the final and executory order of
the SEC of February 14, 1975 which had already foreclosed the issue.  Indeed, in said final order the SEC made the
following findings which are conclusive and well-taken:

“The only question for resolution in this case is whether the
respondent’s name ARMCO STEEL CORPORATION is similar, if not identical with
that of petitioner, ARMCO STEEL CORPORATION (of Ohio, U.S.A.) and of
petitioner, ARMCO-MARSTEEL ALLOY CORPORATION, as to create uncertainty and
confusion in the minds of the public.

By mere looking at the names, it is clear that the name of
petitioner, ARMCO STEEL CORPORATION (of Ohio, U.S.A.), and that of the
respondent, ARMCO STEEL CORPORATION, are not only similar but identical and the
words ‘of Ohio, U.S.A.,’ are being used only to identify petitioner ARMCO
STEEL-OHIO as a U.S. corporation.

It is indisputable that ARMCO-STEEL-OHIO, having patented the term
‘Armco’ as part of its trademark on its steel products, is entitled to
protection in the use thereof in the Philippines.  The term ‘Armco’ is now being used on the
products being manufactured and sold in this country by Armco-Marsteel by virtue of its tie-up with
ARMCO-STEEL-OHIO.  Clearly, the two
companies have the right to the exclusive use and enjoyment of said term.

ARMCO STEEL-PHILIPPINES, has not only an identical name but also a
similar line of business, as shown above, as that of ARMCO STEEL-OHIO.  People who are buying and using products
bearing the trademark ‘Armco’ might be led to believe that such products are
manufactured by the respondent, when in fact, they might actually be produced
by the petitioners.  Thus, the goodwill
that should grow and inure to the benefit of petitioners could be impaired and
prejudiced by the continued use of the same term by the respondent.”

Obviously, the petition for review is designed to further delay
if not simply evade compliance with the said final and executory
SEC order.  Petitioner also seeks a
review of the orders of execution of the SEC of the said February 14, 1975 order.  An order or resolution granting execution of
the final judgment cannot be appealed9 otherwise there will be no end to
the litigation.10

WHEREFORE, the petition is DISMISSED for lack of merit
with costs against petitioner.  This
decision is immediately executory.

SO ORDERED.

Teehankee, C.J., Narvasa,
Cruz, and Paras,
JJ., concur.

^[1]
Annex “J” to Petition.

^[2]
Annex “K” to Petition.

^[3]
Annex “L” to Petition.

⁴ Annex “M” to Petition.

5
Annex “M”.

6
Annex “R”.

7
Annex “A” to the Petition.

8
Annex “V” to the Petition.

9
Heirs of June D. Francisco vs. Munoz-Palma, 37 SCRA 753; Romero, Sr. vs.
Court of Appeals, 40 SCRA 172.

10
Corpuz vs. Alikpala,
22 SCRA 104; Socco vs. Vda.
de Leary, SCRA 326, 329.