IRAC CASE ANALYSIS FORMAT

Issue-Rules-Analysis-Conclusion

CASE TITLE: TOPROS vs. John Charles Chang, Jr., et., al.

A. ISSUE Statement

1. Whether Respondent John Charles Chang, Jr. is liable for violation of his
fiduciary duties under the Corporation Code.
2. Whether the determination of the exact liability of Respondent Chang has basis
in fact and in law.

B. RULES, laws, regulations, policies

● Batas Pambansa Bilang 68, the Corporation Code of 1980
● Jurisprudence on :
● Gokongwei vs. SEC (1979)
● Ponce vs.Legaspi (1992)
● Pepper vs. Litton
● Strategic Alliance vs. Radstock Securities Ltd. (2009)
● United State of America cases
The line of business test
The interest or expectancy test
Guth v. Loft, Inc. 63 (Guth)

C. 1- ANALYSIS OF FACTS

Who : The Parties 1. Total Office Products and Services Inc. (TOPROS),
plaintiff
and 2. John Charles Chang, Jr., respondent

What : TOPROS filed a petition before the Securities and Exchange

Commission (SEC) for Accounting and Damages against
Respondent John Charles Chang alleging disloyalty to the
corporation in violation of the Doctrine of corporate opportunity.

Where : SEC at EDSA, however with the enactment of Republic Act 8799,
the amended petition was transferred to the Regional Trial Court (RTC) of Pasig
City Branch 138.

When : November 17, 1998

How : TOPROS filed a Petition for Accounting and Damages with the Security
and Exchange Commission (SEC). With the enactment of Republic Act 8799, the
petition was referred to the Regional Trial Court of Pasig, Branch 138. RTC ruled in
favor of Topros. Respondent Chang filed an Appeal with the Court of Appeals which
was granted. Topros filed a petition for certiorari with the Supreme Court which
reversed the decision of the Court of Appeals and remanded the case to RTC for
immediate disposition.
Events in sequence.

Topros filed a SEC issued a

case for writ of Respondent
TOPRO Chang denied
accounting with preliminary
the charges
damages at SEC attachment in
against him.
then at RTC. favor of Topros.

Court of Appeals Respondent RTC decided in

granted Chang filed an favor of Topros
Respondent appeal before for Chang was
Chang appeal. the Court of guilty of
Appeals. Disloyalty.

Civil Case No. All the writs and Topros filed a

68327 was notices of Petition for
reversed and garnishment Certiorari with
dismissed. were dissolved. Supreme Court.

Respondent SC granted the Alleging that CA

Chang is guilty petition and committed grave
of disloyalty to remanded the abuse of
the corporation. case to RTC. discretion.

2 - ANALYSIS of Arguments and Counter-Arguments

 Plaintiff Respondent

1. Respondent Chang 1. Respondent contented that

violated the provisions of plaintiff knew all the transactions
Sections 31 , 33, 74 of the he entered into and
Corporation Code. acquiescenced with all of his
acts.
2. Respondent Chang is 2. He is not liable for he alone ran
disloyal to the corporation TOPROS and shouldered its liabilities.
and should be liable for
damages

D. CONCLUSION

● Respondent Chang should be held liable and accountable by virtue of his office
as he acquired for himself a business opportunity which should belong to
TOPROS, thereby obtaining profits to the prejudice of the latter.

● Respondent was guilty of disloyalty, therefore must account to TOPROS for all
such profits by refunding the same notwithstanding that he risked his talent, time
and funds in the business.

● He committed acts of personal and pecuniary interests that were in conflict with
his duties as a corporate director and officer of TOPROS. He conducted
business with the opportunity fairly belongs to the corporation. His function
requires an undivided and unselfish loyalty that there shall be no conflict
whatsoever with his duty as a Director and self- interest vis a vis with Topros.

● The Supreme Court ruled that “A person cannot serve two masters without the
detriment to one of them.” The purpose of the doctrine of corporate opportunity is
to deter corporate officers for taking advantage of their position of trust and
confidence to further private interests.