Title
Western Equipment and Supply Co. vs. Reyes
Case
G.R. No. 27897
Decision Date
Dec 2, 1927
Foreign corporation protects trademark, goodwill against domestic incorporation under same name, alleging fraud and unfair competition; court grants injunction.
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Case Digest (G.R. No. 27897)

Facts:

  1. Parties Involved:

    • Plaintiffs: Western Equipment and Supply Company (a foreign corporation organized under Nevada law), Western Electric Company, Inc. (a foreign corporation organized under New York law), W. Z. Smith, and Felix C. Reyes.
    • Defendants: Fidel A. Reyes (Director of the Bureau of Commerce and Industry), Henry Herman, Peter O'Brien, Manuel B. Diaz, Felipe Mapoy, and Artemio Zamora.
  2. Business Operations:

    • Western Equipment and Supply Company was granted a provisional license to operate in the Philippines on May 20, 1926, which became permanent on August 23, 1926. It imported and sold electrical and telephone apparatus manufactured by Western Electric Company, Inc.
    • Western Electric Company, Inc., though not licensed to operate in the Philippines, had its products widely used in the country, with its trademark "Western Electric" registered in the U.S. since 1905.
  3. Attempted Incorporation:

    • On October 15, 1926, defendants Henry Herman, Peter O'Brien, Manuel B. Diaz, Felipe Mapoy, and Artemio Zamora filed articles of incorporation to form a domestic corporation under the name "Western Electric Company, Inc." to engage in the same business as the plaintiff.
  4. Protest and Legal Action:

    • Plaintiffs protested the incorporation, arguing it would mislead the public and infringe on their trademark and goodwill. The Director of the Bureau of Commerce and Industry intended to overrule the protest and issue the certificate of incorporation.
    • Plaintiffs sought a temporary and permanent injunction to prevent the issuance of the certificate and the use of the name "Western Electric Company, Inc."
  5. Stipulated Facts:

    • The parties agreed on the facts, including the plaintiffs' business reputation, the defendants' knowledge of the plaintiffs' business, and the intent to use the same name for a competing domestic corporation.

Issue:

  1. Whether a foreign corporation that has never done business in the Philippines and is unlicensed and unregistered there can maintain an action to restrain residents from organizing a corporation under the same name.
  2. Whether such a foreign corporation can restrain a government officer (the Director of the Bureau of Commerce and Industry) from exercising discretion in registering a domestic corporation with the same name.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)


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