TOTAL OFFICE PRODUCTS AND SERVICES (TOPROS), INC.

,
petitioner , vs. JOHN CHARLES CHANG, JR., TOPGOLD
PHILIPPINES, INC., GOLDEN EXIM TRADING AND COMMERCIAL
CORPORATION, and IDENTIC INTERNATIONAL CORP.,
represented by JOHN CHARLES CHANG, JR., HECTOR and
CECILIA KATIGBAK, respondents

FACTS:
● Chang is a former employee of Pantrade owned by spouses Ty. Spouses Ty
wanted to establish another corporation called TOPROS that which is the sole
distributor of Minolta plain paper copiers in the Philippines.
● Chang was given the duty to manage TOPROS and a 10% shares in the
corporation with the assurance from Chang that he will render competent,
exclusive and loyal service thereto.
● Chang was the President and General Manager and entrusted to him the
management as well as the funds of TOPROS
● Despite its success, no substantial cash dividends were distributed to the
stockholders because according to Chang, the Corporation was investing its funds
in several real properties.
● Ty family sensed irregularities in Chang’s dealings when their friends and relatives
began questioning the manner in which products and services from Topros were
issued receipts and vouchers from Topgold, Golden Exim, and Identic.
● The Ty family requested Chang to return all corporate records of Topros.

● Chang however offered to buy them out of their interest at Topros.

● This prompted the Ty family to conduct an investigation which revealed that

while still a Corporate Director and an officer of Topros, Chang together with the
individual respondents incorporated the respondent-corporations to siphon the
assets, funds, goodwill, equipment and resources of Topros.
● Topros alleged that Chang used its properties in organizing the respondent-
corporations and obatained opportunities properly belongin to it and its
stockholders to their damage and prejudice.
● Chang on his part denied the charges and asserted that despite the absence of
assistance from the Ty family, they received an estimated 14M cash dividends
 spread throughout the 15 years of his incumbency, that he was able to save
Topros from economic crises through personal loans and surety agreements with
Chinabank, he maintained the goodwill of the corporation, he promoted the only
Filipino brand of office machine Ultimax and patented under Topros name and
during the time he was signing the surety for Topros that he organized the 3
corporations.
● Change further allege that Ty family knew that he organized the 3 corporations

● When trust receipts arrangement with Chinabank became due, he took up the
matter with the spouses Ty and Ramon Ty passed the matter to him and told that
if it is not possible to pay, to file for bankruptcy.
● In order to maintain his credibility, and the 200 employees who were about to
lose jobs, he took it upon himself to serve the clients of Topros through Topgold

ISSUE: Whether Chang violates the corporate opportunity doctrine

SC RULING:
Yes, there is a violation of the corporate opportunity doctrine.

The ALI test defines a corporate opportunity as: (1) any opportunity
to engage in any business activity of which a director or senior executive
becomes aware either in connection with his functions as director or
senior executive or under circumstances that should reasonably lead him
to believe that the person offering the opportunity expects him to offer it
to the corporation, or through the use of corporate information or
property, if the resulting opportunity is one that the director or senior
executive should reasonably be expected to believe would be of interest
to the corporation; or (2) any opportunity to engage in a business activity
— which includes the acquisition or use of any contract right or other
tangible or intangible property — of which a senior executive becomes
aware, if he knows or reasonably should know that the activity is closely
related to the business in which the corporation is engaged or may
reasonably be expected to engage.
 The corporate opportunity doctrine, as delineated by Guth and its
progeny, holds that a corporate officer or director may not take a
business opportunity for his own if: (1) the corporation is financially
able to exploit the opportunity; (2) the opportunity is within the
corporation's line of business; (3) the corporation has an interest or
expectancy in the opportunity; and (4) by taking the opportunity for
his own, the corporate fiduciary will thereby be placed in a position
inimicable to his duties to the corporation.

According to TOPROS, Chang's acts amounted to violation of the

"doctrine of corporate opportunity" which rests on the unfairness, in
particular circumstances, of an officer or director taking advantage of an
opportunity for his own personal profit when the interest of the
corporation calls for protection. If, in such circumstances the interests of
the corporation are betrayed, the corporation may elect to claim all the
benefits of the transaction for itself and the law will impress a trust in
favor of the corporation upon the property interest and profits acquired.