G.R. No. 200070-71 - Total Office Products and Services , Inc. vs. Chang, Jr.

On November 17, 1998, Total Office Products and Services, Inc. (TOPROS) filed with the SEC an amended petition for accounting and damages (transferred to the RTC under RA 8799) against:

Corporations: TOPGOLD Philippines, Inc.; Golden Exim Trading and Commercial Corporation; Identic International Corporation
Individuals: John Charles Chang, Jr.; Saul Mari Chang; Hector Katigbak; Cecilia Katigbak; Rosario Sarah Fernando; Elizabeth Jay

Allegations: Incorporators and officers, led by Chang, formed respondent-corporations to siphon TOPROS’s assets, contracts, goodwill, and opportunities.
Relief prayed: accounting, refund of profits, dissolution of respondent-corporations, reconveyance of fraudulently acquired properties, damages, and issuance of writ of preliminary attachment (bond posted ₱90 million).

In late 1982, spouses Ramon and Yaona Ang Ty engaged Chang (10% shareholder) to manage a new distributor of Minolta plain paper copiers.
January 31, 1983: TOPROS incorporated (authorized capital ₱4 million; later increased to ₱10 million; Chang’s share rose to 20%). Chang was elected President and GM; Yaona Ty, Treasurer; Jennifer Ty, Secretary.
TOPROS prospered as multi-brand distributor (Ultimax, Maruzen, Taros, Intimus) but paid no substantial dividends, reinvesting in real properties.

1998: Ty family noted that receipts and vouchers for TOPROS products/services were issued by TOPGOLD, Golden Exim, and Identic.
Investigation revealed Chang and respondents used TOPROS resources to form respondent-corporations in same business line.
Chang ousted; petition filed for accounting and damages; preliminary attachment issued.

Chang insisted he single-handedly ran TOPROS, shouldered its debts, saved it from crisis via personal loans, developed goodwill and the “Ultimax” brand, and that respondent-corporations were formed only to pay TOPROS liabilities after Ty family declined further support.
Individual respondents (except Chang) contested SEC jurisdiction, claiming intra-corporate dispute.

RTC (Branch 158, Pasig City) Decision (March 18, 2008): held Chang violated fiduciary duties (Corporation Code §§ 31, 34), ordered accounting of all profits/properties, refund to TOPROS, actual damages (to be determined by court-appointed accounting committee), exemplary damages ₱100,000, attorney’s fees ₱100,000.
CA (June 17, 2011): reversed RTC, dismissed petition, dissolved attachment writ—finding TOPROS failed to prove complete control over respondent-corporations, no clear case of fraud or veil-piercing, mere innuendo of disloyalty.
CA denied reconsideration (January 2, 2012). TOPROS elevated case to the Supreme Court.

Whether Chang is liable for violation of his fiduciary duties under the Corporation Code (BP 68) by usurping corporate opportunities and competing with TOPROS.