ONG YONG vs TIU

Facts:
1. Tiu family wholly owns FLADC which in turn
owns and operates Masagana Citimall.
2. The completion of Masagana was was
threatened by the financial distress by the
FLADC.
3. The Tius invited the Ongs to invest. Which
they did on the condition that the Tius will
match it with their proeprties and will also
allow 6 directorship in FLADC for the Ongs,
including positions in the corporate office.
4. The Ongs contributed 100M in cash for
100,000 shares. This was not enough to
cover the entire 190M debt of FLADC with
PNB. The Ongs forked 70M for the loan, and

5.
6.

7.

20M to the Tius, who in turn paid to PNB for

the same loan.
The Ongs were promised the position of 6
Directors, including as the President and
Secretary positions in the corporation.
The Tius failed to transfer one parcel of land
which failed to put their equity to be less
than the Ongs. They were also found to be
siphoning the rentals in Masagana into their
own accounts.
They alleged that the Ongs prevented them
from performing their duties as VP and
treasurer, hence they unilaterally rescinded
the P-SA

SEC confirmed the cancellation/termination of

the P-SA
CA modified the decision

1.
2.

Ordering liquidation of the FLADC

Rescission of the P-SA, for the Tius to return
what the Ongs have contributed
a. 100M P-SA
b. 70M advance to FLADC
c. 20M loan to Tius
3. Ordered the remainder to be returned to Tius

All for practical reasons

SC 1 affirmed CA decision, modifying only the
nature of the 70K advance by the Ongs
SC 2 reversed the decision. Trust doctrine
applied.
1. Found Tius at fault
2. Ongs fault is not significant to warrant
the cancellation of the P-SA
3.