Virata v. NG Wee (2017 Decision + 2018 Resolution)

LUIS JUAN L. VIRATA & UEM-MARA PHILIPPINES CORPORATION V. ALEJANDRO NG WEE, ET AL.
(2017 DECISION & 2018 RESOLUTION)

G.R. No. 220926, July 5, 2017 | G.R. No. 220926, March 21, 2018
Velasco, Jr., J.
DOCTRINE: [Liability of directors] The board of directors is expected to be more than mere rubber stamps of the
corporation and its subordinate departments. It wields all corporate powers bestowed by the Corporation Code,
including the control over its properties and the conduct of its business. Being stewards of the company, the board is
primarily charged with protecting the assets of the corporation in behalf of its stakeholders.
Obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities, and
said personalities are generally not held personally liable thereon. However, by way of exception, directors, trustees, or
officers may be held solidarily liable with the corporation under Sec. 31 of the Corporation Code, such as for assenting
to patently unlawful corporate acts, and acting in gross negligence and/or bad faith in management.
[Tender offer] Aside from performing the regular powers of a corporation under the Corp. Code, a duly licensed
investment house is granted additional powers under Sec. 7 of BP 129, including the power to participate as soliciting
dealer or selling group member in tender offers, block sales, or exchange offering or securities; deal in options, rights or
warrants relating to securities and such other powers which a dealer may exercise under the Securities Act.
[Fraudulent conduct of business/penalties] Under Art. 1170 of the NCC, those who in the performance of their
obligations are guilty of fraud are liable for damages.
FACTS: Respondent Ng Wee, using his own accounts and those of his trustees, placed investments on Wincorp
through “sans recourse” transactions whereby Ng Wee, as the investor, would be matched with corporate borrowers
accredited by Wincorp. Ng Wee’s investments were matched with Hottick Holdings Corporation, which was extended a
P1.5 billion credit line by Wincorp. Hottick fully availed of the loan facility, but it defaulted in its obligations. Wincorp thus
filed a collection suit against Hottick and its sureties, including petitioner Virata. To induce the parties to settle, Virata
offered to guarantee the full payment of the loan, which Wincorp accepted through a Memorandum of Agreement
(MOA) entered into by the parties. Subsequently, Wincorp executed a Waiver and Quitclaim in favor of Virata, releasing
him from any obligation arising from the MOA, in exchange for Virata’s obligation to transfer 40% of equity of UDPI and
40% of UDPI’s interest in Cavitex to Wincorp.
Eventually, Ng Wee learned of Hottick’s default, but it was assured by Wincorp that it would absorb Ng Wee’s losses,
and his investments would be transferred to a new borrower account, Power Merge, whose majority stockholder is
Virata himself, owning 374,996 out of the corporation’s 375,000 subscribed capital stock.
In a special meeting, the Wincorp board of directors approved Power Merge’s application for a credit line in the
maximum amount of P1.3 billion. According to the minutes of the special meeting, those in attendance were board
chairman John Anthony Espiritu, Wincorp President Antonio Ong, and directors Mariza Santos-Tan, Manuel
Tankiansee, Manuel Estrella, Simeon Cua, and Henry and Vicente Cualoping. Ong and Wincorp Vice President for
Operations Anthony Reyes then executed a Credit Line Agreement (CLA) in favor of Power Merge. About a month
after, another special meeting was held where the same Wincorp directors and officers further resolved to increase
Power Merge’s maximum credit line to P2.5 billion. The CLA was amended accordingly.
Power Merge made a total of 6 drawdowns from its credit line in the total amount of P2.18 billion. Following Wincorp’s
protovol, Power Merge issued Promissory Notes in favor of Wincorp. Upon receipt of the PNs, Wincorp issued
Confirmation Advices to Ng Wee, indicating that out of the P2.18 billion drawn by Power Merge, P213 million was
sourced from Ng Wee’s money placements under the names of his trustees. However, Ng Wee was unaware that
additional Side Agreements were executed by the Wincorp and Power Merge absolving the latter of liability as regards
the PNs it issued. The Side Agreements were signed by Ong and Reyes.
Despite repeated demands, Ng Wee was unable to collect the outstanding P213 million from Power Merge. Thus, Ng
Wee filed a complaint for sum of money before the RTC. Of the 17 defendants, only Virata, Power Merge, UDPI, UEM-
MARA, Wincorp, Ong, Reyes, Cua, Tankiansee, Santos-Tan, the Cualopings, and Estrella were duly served with
summons. The RTC ruled in favor of Ng Wee and ordered the said defendants to jointly and severally pay Ng Wee. It
found that Wincorp and Power Merge colluded to defraud Ng Wee of his investments by using the “ sans recourse”
transactions to conceal Wincorp’s direct borrowing, and that sufficient evidence was presented against the individual
directors and officers, except for Tankiansee, for them to be held liable for fraud and/or bad faith under Sec. 31 of the
Corporation Code.
B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

The CA affirmed the RTC and adjudged the defendants as jointly and severally liable to Ng Wee pursuant to Art. 1170
of the NCC. The CA held that Wincorp and Power Merge perpetrated an elaborate scheme of fraud to deceive Ng Wee
into investing funds, which he would not have done had he not been deceived into believing that Power Merge is
financially capable of paying the returns on his investments. The CA also sustained the liability of the Wincorp directors
pursuant to Sec. 31 of the Corporation Code, for having assented to patently unlawful corporate acts of Wincorp, and
for having acted in gross negligence and/or bad faith in the management of the corporation.
HELD: Wincorp is liable to Ng Wee for fraud. Under Art. 1170, those who in the performance of their obligations are
guilty of fraud are liable for damages. Fraud in this sense refers to the deliberate and intentional evasion of the normal
fulfillment of obligation. This provision is applicable in the case at bar, since Wincorp exerted insidious machinations
upon Ng Wee in order to deceive him into investing a significant amount into a mere empty shell of a corporation.
Wincorp accredited Power Merge as a borrower and extended it a credit line despite a number of signs that indicate its
inability to perform its obligations: (1) Power Merge has only been in existence for two years when it was granted a
credit facility; (2) Power Merge was thinly capitalized with only P37.5 million subscribed capital; (3) Power Merge was
not an ongoing concern since it never secured the necessary permits and licenses to conduct business, never engaged
in any lucrative business, and did not file the necessary reports with the SEC; and (4) no security other than its PNs
was demanded by Wincorp or was furnished by Power Merge in relation to the latter's drawdowns. The intent to
defraud Ng Wee was also manifest based on how Wincorp and Power Merge entered into a CLA and amended it just a
month after. They also simultaneously executed two Side Agreements on the same date as the credit agreements, by
the same parties, which have the same exact provisions, including the provision to relieve Power Merge from any
liability arising from the execution of the agreements and the PNs.
Power Merge cannot be held liable for fraud but it is liable on contract based on the PNs it executed. Power Merge and
Virata were not active parties in defrauding Ng Wee. Instead, the company was used as a mere conduit in order for
Wincorp to be able to conceal its act of directly borrowing funds for its own account. Virata is liable for the PNs because
under Sec. 60 of the NIL, the maker of a promissory note engages that he will pay it according to its tenor. Under the
PNs executed by Virata in behalf of Power Merge, it is clear that Power Merge, through Virata, obligated itself to pay
Wincorp and those who invested through it the values stated in the PNs. And even assuming that he is only an
accommodation party, Virata is still liable pursuant to Sec. 29 of the NIL, which states that an accommodation party is
liable on the instrument to a holder for value, notwithstanding such holder, at the time of taking the instrument, knew
him to be only an accommodation party. Therefore, Power Merge and Virata can be held liable for the amounts stated
in the PNs as well as for the assignment to Ng Wee of portions thereof as embodied in the Confirmation Advices.
The individual directors of the corporation are also solidarily liable. Firstly, Reyes, Wincorp’s VP for Operations, is liable
for the obligations of Wincorp. While generally, obligations incurred by the corporation, acting through its directors,
officers and employees, are its sole liabilities, and said personalities are not held personally liable thereon, by way of
exception, Sec. 31 of the Corporation Code provides that a corporate director or officer may be held solidarily liable with
the corporation. Reyes claims that since he is only an officer, he may only be held liable for acquiring or attempting to
acquire any interest in conflict with that of the company, but since there is no allegation of him being guilty of conflict of
interest, he cannot be held liable under Sec. 31. This is untenable because ascribing liability to a corporate director,
trustee, or officer by invoking Sec. 31 is distinct from the remedial concept of piercing the corporate veil, which is an
equitable remedy that may be invoked when the corporate fiction is used to protect fraud. Applying the doctrine, Reyes
cannot escape liability by claiming that he was merely performing his function as the VP for Operations and was duly
authorized to sign the Side Agreements. The CLA is patently contradictory to the Side Agreements, which he executed
on the same day as the representative for Wincorp.
Directors Cua and the Cualopings are also solidarily liable. The totality of circumstances in this case proves that they
are either complicit to the fraud or guilty of gross negligence, as regards the " sans recourse" transactions from the
Power Merge account. As stewards of the company, the board is primarily charged with protecting the assets of the
corporation in behalf of its stakeholders. Cua and the Cualopings failed to observe this fiduciary duty when they
assented to extending a credit line facility to Power Merge. It was incumbent upon the board to have been more
circumspect in approving its credit line facility, and should have made an independent evaluation of Power Merge's
application before agreeing to expose it to a P2.5 billion risk. Had it fulfilled its fiduciary duty, the obvious warning signs
[see 4 items above] would have cautioned it from approving the loan in haste. Furthermore, prior to Power Merge's
application for a credit facility, Virata had already transacted with Wincorp as a surety for the Hottick obligations that
were still unpaid at that time. But instead of impleading him in the collection suit against Hottick, the board effectively
released Virata from liability and even granted him a credit facility in the amount of P1.3 billion on the very same day.
Hence, even if Cua and the Cualopings are not guilty of fraud, they would still be liable for gross negligence in
managing the affairs of the company, to the prejudice of its clients and stakeholders. They cannot invoke the business
judgment rule because the doctrine admits of exceptions, including bad faith and gross negligence.

Director Estrella is likewise solidarily liable. The minutes of the special meetings clearly indicate the presence of
Estrella in both occasions. Although the minutes were found to be unreliable insofar as Tankiansee is concerned, the
RTC rightly distinguished between the circumstances of Estrella and Tankiansee to justify holding Estrella liable—while
Tankiansee was able to prove that it was physically impossible for him to have participated in the said meetings since
his immigration records clearly show that he was outside the country during those specific dates, no similar evidence of
impossibility was ever offered by Estrella to support his position. Neither can Estrella be permitted to raise the defense
that he is a mere nominee of Espiritu, the then chairman of the Wincorp board of directors. It is of no moment that he
only had one nominal share in the corporation, just as it is inconsequential whether he had been receiving
compensation or honoraria for attending the meetings of the board. The fact remains that Estrella accepted the
directorship, along with the obligations attached to the position. The fiduciary duty of a company director cannot
conveniently be separated from the position he occupies on the mere argument that no monetary benefit was being
derived therefrom.
RESOLUTION: In its Resolution, the Court affirmed the solidary liability of the Wincorp directors, including director
Santos-Tan, who did not appeal the decision of the CA. Again, had the directors fulfilled their fiduciary duty, the obvious
warning signs would have cautioned them from approving the loan in haste. As regards Santos-Tan, she would likewise
be liable in her personal capacity under Sec. 31 of the Corporation Code. She cannot utilize the separate juridical
personality of Wincorp as a shield when she, along with the other board members, approved the credit line application
of Power Merge in the amount of P2.5 billion despite the glaring signs that it would be unable to make good its
obligation. The failure to heed these warning signs constitutes gross negligence, if not fraud, for which the members of
the board could be held personally accountable.
The Wincorp board of directors also impliedly ratified the signing of the Side Agreements which released Power Merge
from its liability under its PNs. Even though there is no document traceable to the Wincorp directors expressly
authorizing the execution of the Side Agreements, the totality of the circumstances supports the conclusion that the
Wincorp directors impliedly ratified, if not secretly authorized, the signing of the Side Agreements in order to lay the
groundwork for the fraudulent scheme. Implied ratification may take the form of silence, acquiescence, acts consistent
with approval of the act, or acceptance or retention of benefits.
In sum, the Wincorp board of directors' approval of Power Merge’s credit line application, notwithstanding the obvious
signs and circumstances, establishes the directors’ liability to Ng Wee. If these do not attest to their privity to Wincorp's
fraudulent scheme, they would, at the very least, prove that the directors are guilty of gross negligence in managing the
company affairs. Hence, the Court did not err when it ruled that Sec. 31 of the Corporation Code must be applied to
hold the directors liable in their personal capacity.

FACTS OF THE CASE
● Respondent Ng Wee was a client of Westmont Bank. In 1998, he made money placements with Westmont
Investment Corporation (Wincorp), a domestic corporation organized and licensed to operate as an investment
house. Ng Wee entered into “sans recourse” transactions which are allegedly safe, stable, high-yielding, and
which allegedly involve little to no risk.
o Through these transactions, a corporate borrower would be screened by Wincorp, and upon qualification,
they would be extended a credit line for a specific amount. The borrowing corporation would then be
matched by Wincorp with an investor willing to provide the funds. Every drawdown by the borrower
shall be evidenced by a promissory note executed in favor of Wincorp and/or the investor/s.
o Ng Wee thus placed investments on Wincorp under accounts in his own name or in those of his
trustees, Angel Archangel, Elizabeth Ng Wee, Roberto Tabada Tan, and Alex Lim Tan.
o In exchange, Wincorp issue Ng Wee and his trustees Confirmation Advices 1 informing them of the identity
of the borrower with whom they were matched, and the terms under which the borrower would repay
them.
o SPAs2 were also prepared for the lender investor.
● Ng Wee’s initial investments were matched with Hottick Holdings Corporation (Hottick), the majority shares
of which were owned by Tan Sri Halim Saad, a Malaysian national. Halim Saad was then the controlling
shareowner of respondent UEM-MARA Philippines Corporation (UEM-MARA), which has substantial interests in
the Manila Cavite Express Tollway Project (Cavitex).
● Hottick was extended a credit facility with a maximum drawdown of P1,500,908,026.87 [P1.5 billion] in
consideration of the securities it issued in favor of Wincorp, including: (1) a Suretyship Agreement, executed by
petitioner Virata; (2) a Suretyship Agreement, executed by Halim Saad; and (3) a Third-Party Real Estate
Mortgage, executed by the National Steel Corporation (NSC).
● Hottick fully availed of the loan facility extended by Wincorp, but it defaulted in its obligations following the
Asian financial crisis. As a result, Wincorp filed a collection suit against Hottick, Halim Saad, and NSC. A Writ
of Preliminary Attachment was then issued against Halim Saad's properties, which included the assets of UEM-
MARA. Virata was not impleaded as a defendant in the case.
● To induce the parties to settle, Virata offered to guarantee the full payment of the loan, which was embodied
in a 1999 Memorandum of Agreement between him and Wincorp. Virata was also able to achieve a compromise
between Wincorp and Halim Saad that led to the execution of the 1999 Settlement Agreement.
o In the Settlement Agreement, Halim Saad agreed to pay USD1,000,000 [$1 million] to Wincorp in
satisfaction of any and all claims the latter may have against the former under the Surety Agreement that
secured Hottick's loan.
o As a result, Wincorp dropped Halim Saad from the case and the Writ of Preliminary Attachment over the
assets of UEM-MARA was dissolved.
● Wincorp then executed a Waiver and Quitclaim in favor of Virata, releasing him from any obligation
arising from the MOA, except for his obligation to transfer 40% equity of UEM Development Philippines,
Inc. (UDPI) and 40% of UDPI’s interest in Cavitex to Wincorp.
o Apparently, the MOA is a mere accommodation that is not meant to give rise to any legal obligation in
Wincorp's favor as against Virata, other than the stipulated equity transfer.
● Upon learning of Hottick’s financial distress, Ng Wee confronted Wincorp about the status of his investments.
Wincorp assured him that the losses from the Hottick account will be absorbed by Wincorp and that his
investments would be transferred to a new borrower account.
● In view of these representations, Ng Wee continued making money placements to Hottick and even
increased his stakes in a new borrower account, Power Merge Corporation.
o Power Merge is a domestic corporation, the primary purpose of which is to "invest in, purchase, or
otherwise acquire and own, hold, use, sell, assign, transfer, mortgage, pledge, exchange or otherwise
dispose of real or personal property of every kind and description."
o Virata is the majority stockholder of the corporation, owning 374,996 out of its 375,000 subscribed capital
stock.
1
See Annex 1 for the contents
2
See Annex 2 for the contents

● In a special meeting on February 9, 1999, the Wincorp board of directors resolved to file the collection
against Halim Saad and Hottick, and approved Power Merge’s application for a credit line in the maximum
amount of P1.3 billion.
o According to the minutes of the special meeting, those in attendance were board chairman John
Anthony Espiritu, Wincorp President Antonio Ong, Mariza Santos-Tan, Manuel Tankiansee,
Manuel Estrella, Simeon Cua, and Henry and Vicente Cualoping.
o On February 15, 1999, Wincorp President Ong and Vice President for Operations Anthony Reyes
executed a Credit Line Agreement (CLA) in favor of Power Merge with Virata’s conformity.
o On March 11, 1999, another special meeting was held where Wincorp, through the same directors
and officers, increased Power Merge’s maximum credit line to P2.5 billion. The CLA was amended
accordingly on March 12, 1999.
● Power Merge made a total of 6 drawdowns from the amended CLA in the total amount of P2,183,755,253.11
[P2.18 billion]. Following protocol, Power Merge issued Promissory Notes 3 in favor of Wincorp, either for itself or
as agent for or on behalf of certain investors, for each drawdown.
● After receiving the PNs from Power Merge, Wincorp issued Confirmation Advices to Ng Wee and his
trustees and to the other investors matched with Power Merge. The Confirmation Advices indicate that
out of the P2.18 billion drawn by Power Merge, P213,290,410.36 [P213 million] was sourced from Ng Wee’s
money placements under the names of his trustees.
● However, Ng Wee was unaware that on the same dates the CLA and its amendment was entered into by Wincorp
and Power Merge, additional Side Agreements were executed by the two corporations absolving Power
Merge of liability as regards the PNs it issued. The Side Agreements were signed by Ong and Reyes.
o The Side Agreements provide the only obligation of Power Merge to Wincorp shall be to return and
deliver to Wincorp all the rights, title and interests conveyed by Wincorp to Power Merge over the Hottick
obligations. Power Merge shall have no obligation to pay under its PNs executed in favor of Wincorp.
o The accommodation being entered into by the parties is not intended to create a payment obligation on
the part of Power Merge.
● By virtue of these Side Agreements, Wincorp was able to assign its rights to the uncollected Hottick obligations
and hold Power Merge papers instead. However, this also meant that if Power Merge subsequently defaults in the
payment of its obligations, it would refuse payment to its investors.
● Despite repeated demands, Ng Wee was unable to collect the outstanding P213 million from Power Merge. Thus,
Ng Wee filed a complaint for sum of money before the RTC. Of the 17 defendants, only Virata, Power Merge,
UDPI, UEM-MARA, Wincorp, Ong, Reyes, Cua, Tankiansee, Santos-Tan, 4 the Cualopings, and Estrella
(defendants) were duly served with summons.
o Ng Wee alleged that Power Merge's default was inevitable from the start since it only had subscribed
capital in the amount of P37,500,000 of which only P9,375,000 is actually paid up. He attributed gross
negligence on the part of Wincorp and its directors for approving Power Merge's credit line application
and its subsequent increase despite its glaring inability to pay.
o Ong and Reyes were likewise impleaded for signing the Side Agreements that would allow Power Merge
to avoid paying its obligations to the investors.
o Ng Wee sought to pierce the separate juridical personality of Power Merge since Virata owns almost all of
the company's stocks. It was further alleged that Virata acquired interest in UEM-MARA using the funds
swindled from the Wincorp investors.
o Ng Wee also cited the Cease and Desist Order issued by the SEC against Wincorp, upon its finding that
the latter has sourced funds from 2,200 individuals with an average of P7 billion worth of commercial
papers per month. The SEC found that the Confirmation Advices issued by Wincorp to its investors take
the form of a security that should have been registered before being offered to the public, and that
Wincorp had also been advancing the payment of interest to the investors to cover up its borrowers'
insolvency.
● The RTC ruled in favor of Ng Wee and ordered the defendants to jointly and severally pay Ng Wee.
3
See Annex 3 for contents
4
This includes the power to participate as soliciting dealer or selling group member in tender offers, block sales, or exchange offering
or securities; deal in options, rights or warrants relating to securities and such other powers which a dealer may exercise under the
Securities Act. See notes for the full provision.

o It found that Wincorp and Power Merge colluded to defraud Ng Wee of his investments by using the “sans
recourse” transactions to conceal Wincorp’s direct borrowing.
o The RTC likewise ruled that Ng Wee presented sufficient evidence against the individual directors
and officers for them to be held liable for fraud and/or bad faith under Sec. 31 of the Corporation
Code, except for Tankiansee.
▪ The claim against Tankiansee was dropped since his immigration records established that he
could not have participated in the special meetings of the Wincorp directors, having been out of
the country during the material dates. He also filed a civil and criminal case against Wincorp.
o The RTC further found compelling need to pierce through the separate juridical personality of
Power Merge since Virata exercised complete control thereof, owning 374,996 out of 375,000 of its
subscribed capital stock. Similarly, the separate juridical personality of UEM-MARA was pierced to reach
the illegal proceeds of the funds sourced from the defrauded investors.
● The defendants appealed to the CA, which affirmed the RTC. They were found jointly and severally liable
pursuant to Art. 1170 of the NCC.
o Wincorp and Power Merge perpetrated an elaborate scheme of fraud to inveigle Ng Wee into investing
funds. Ng Wee would not have placed his investments in the "sans recourse" transactions had he not
been deceived into believing that Power Merge is financially capable of paying the returns on his
investments.
o The intent of Wincorp to deceive became even more manifest when it entered into the Side Agreements
with Power Merge. The Side Agreements rendered worthless Power Merge's PNs that Wincorp offered to
Ng Wee and the other investors.
o The CA did not find merit in Power Merge's defense that it was a mere accommodation party. Power
Merge's participation was indispensable in deceiving Ng Wee into placing more investments and
amounted to actionable fraud.
o The CA also sustained the liability of the directors. Under Sec. 31 of the Corporation Code [Sec. 30,
RCC], corporate officers can be held liable for having assented to patently unlawful corporate
acts, and for having acted in gross negligence and/or bad faith in management.
▪ Patently unlawful acts - the investment scheme constituted estafa under either Art. 315(1)(b) or
Art. 315(2)(a) of the RPC due to Wincorp's violation of its fiduciary relation with Ng Wee, and its
employment of fraud or deceit to the latter's damage and prejudice.
● Wincorp violated various commercial laws when it offered the "sans recourse"
transactions because notwithstanding their nomenclature, the transactions are actually
with recourse since Wincorp virtually borrowed from itself, for itself.
▪ Gross negligence – the Wincorp directors approved Power Merge's credit line application and the
subsequent increase of its credit limit to P2.5 billion despite Power Merge's evident weak financial
structure and poor capitalization.
o Hence, the elaborate scheme of deceit and fraud, and the corresponding liability therefrom, is
imputable to the directors of Wincorp. Reyes and Virata cannot escape liability since they signed
the Side Agreements that rendered the Power Merge papers worthless.
SUMMARY OF PETITIONS BY THE PETITIONERS

Reyes (VP ● He had no hand in the approval of the credit line application or its increase since he is not a
for director of Wincorp. He was merely the VP for Operations of Wincorp, duly authorized as the
Operations) investment house's signatory for and to all its documents, transactions and accounts. Thus, he
was under obligation to sign the CLA, its Amendment, and the Side Agreements in favor of Power
Merge after the latter's application was approved by Wincorp's board of directors.
● Sec. 31 of the Corporation Code is inapplicable since he is neither a director nor trustee of
Wincorp, as required by the provision. And assuming without conceding its applicability, he cannot
be held solidarily liable since he signed the agreements on behalf of the company in good faith.
Cua and the ● Ng Wee failed to prove that they acted in bad faith or were grossly negligent in managing the
Cualopings affairs of Wincorp, which is required for directors to be held liable under Sec. 31 of the
(directors) Corporation Code.
● The extent of their participation in the alleged fraudulent scheme was limited to acting favorably
on the executive committee's recommendations regarding Power Merge's credit line application
and its subsequent amendment. Mere approval of Power Merge's applications cannot be equated

with bad faith, for the directors relied on the vetting by the departments responsible for doing so.
● Power Merge's applications underwent scrutiny by the credit committee and executive committee
prior to their approval. Thus, the approval was performed in the legitimate pursuit of Wincorp's
business as a duly-licensed investment house.
● They had no knowledge and participation in the execution of the Side Agreements with Power
Merge, which was executed by Wincorp President Ong and Reyes without proper authorization
from the board and, hence, ultra vires.
Estrella ● He was a mere nominee in Wincorp of his principals. He did not have any real beneficial interest
(director) in Wincorp as his appointment was a mere accommodation and he did not even receive any
compensation, salary, per diem or benefit of any kind.
● As a mere nominee, Estrella is involved solely in setting down company policies and prescribing
the general guidelines for the direction of the business and affairs of Wincorp. He was never
involved in the day-to-day management and operations of the company, and thus he had no
knowledge and could not then have approved of the Side Agreements entered into by Ong and
Reyes.
● The RTC erred in relying on the minutes of the special meetings naming him as one of the
directors who approved Power Merge's credit line application and its subsequent amendment.
The minutes have already been discredited when the charges against Tankiansee have been
dropped.
● While he attended the February 1999 special meeting, he already left before the "other matters" in
the agenda, which included Power Merge's application, were discussed. He did not attend the
March 1999 special meeting since he accompanied his wife that day to the hospital for her cancer
treatment. He did not sign the minutes of both meetings.
Virata and ● There is no basis in implicating them in the scheme to defraud Ng Wee and the other investors
UEM-MARA since there was no privity of contract between them and they never interacted with Ng Wee. Ng
Wee also failed to prove that Power Merge derived pecuniary benefits from the investment
transactions.
● The Confirmation Advices were issued by Wincorp alone. Wincorp had the sole discretion of
selecting which corporate borrower to match with whom. Power Merge, Virata, and UEM-MARA
therefore had no control over the matter.
● Virata's ownership of almost all of the shares of Power Merge does not automatically justify the
application of the doctrine, absent fraud. And in the case at bar, there was no evidence of fraud,
bad faith, or gross negligence on the part of Virata.
● UEM-MARA cannot be held liable since there is no evidence of its participation in the allegedly
fraudulent act. There is no proof that the grant of the credit line was for the purpose of acquiring
interests in UEM-MARA, or that the funds obtained by Power Merge were the same funds used by
Virata to acquire interests therein
Wincorp ● It merely performed its normal function as an investment house by matching corporate borrowers
with investors. The arrangement it entered into was neither an investment contract between it and
Ng Wee nor an exercise of quasi-banking function, but the brokerage of a legitimate loan
agreement between Ng Wee and Power Merge.
● It was clear to Ng Wee that what was involved was a loan agreement, and that Wincorp was
merely brokering the transaction. As a mere broker of the transaction, and not the beneficiary
thereof, Wincorp cannot be held liable for the amount borrowed by Power Merge.
● Ng Wee knew of and approved the transactions that Wincorp entered into with Power Merge as
his agent; and his conformity with the Confirmations Advices and execution of the corresponding
SPAs thereafter, ratified Wincorp's acts of agency in the execution of the loan agreement.
● It did not violate commercial laws since the transactions are "without recourse," in compliance with
the BSP rule that only institutions that are granted license to perform quasi-banking functions can
engage in transactions "with recourse."
● It is within its discretion whether or not to approve Power Merge's credit line. It was not an ultra
vires act, and is instead covered by the business judgment rule.
2017 SC DECISION (ON LIABILITY OF DIRECTORS AND OFFICERS ONLY)
ISSUE HELD & RATIO

Whether Reyes is liable for the obligations of Wincorp.
Reyes (VP for ● A corporation has a personality separate and distinct from that of the persons composing it.
Operations) Thus, obligations incurred by the corporation, acting through its directors, officers
is liable for and employees, are its sole liabilities, and said personalities are generally not held
the personally liable thereon.
obligations ● However, by way of exception, a corporate director, a trustee or an officer, may be held
of Wincorp - solidarily liable with the corporation under Sec. 31 of the Corporation Code [Sec. 30,
YES RCC], which provides:
Section 31. Liability of directors, trustees or officers. — Directors or trustees who willfully and
knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross
negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary
interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all
damages resulting therefrom suffered by the corporation, its stockholders or members and other
persons.
When a director, trustee or officer attempts to acquire or acquire, in violation of his duty, any
interest adverse to the corporation in respect of any matter which has been reposed in him in
confidence, as to which equity imposes a disability upon him to deal in his own behalf, he shall be
liable as a trustee for the corporation and must account for the profits which otherwise would have
accrued to the corporation.
● Reyes claims that he is not a director of Wincorp, but its VP for Operations, and thus he
can only be held liable under the second paragraph of the provision, which preclude
officers from acquiring or attempting to acquire any interest in conflict with that of the
company he is serving. Since there is no allegation of him being guilty of conflict of interest,
Reyes argues that he cannot be held liable under the provision.
● His argument is untenable. Ascribing liability to a corporate director, trustee, or officer
by invoking Sec. 31 of the Corp. Code is distinct from the remedial concept of
piercing the corporate veil.
○ While Sec. 31 expressly lays down specific instances wherein the mentioned
personalities can be held liable in their personal capacities, the doctrine of
piercing the corporate veil is an equitable remedy resorted to only when the
corporate fiction is used, among others, to defeat public convenience, justify
wrong, protect fraud or defend a crime.
● Applying the doctrine, Reyes cannot escape liability by claiming that he was merely
performing his function as the VP for Operations and was duly authorized to sign the
Side Agreements. The CLA is patently contradictory to the Side Agreements, which
he executed on the same day as the representative for Wincorp.
○ The execution of the Side Agreements was the precursor to the fraud, and taken
with Wincorp’s subsequent offer to its clients of the "sans recourse" transactions, it
is a clear indicia of fraud for which Reyes must be held accountable.
Whether Cua Cua and the Cualopings are liable for the obligations of Wincorp.
and the ● Cua and the Cualopings admit of approving the CLA and its amendment during the special
Cualopings meetings of the Wincorp board, but interpose the defense that they did so because the
(directors) screening committee accepted the application. They deny knowledge of the Side
are liable for Agreements and of Power Merge's inability to pay.
the ● This argument fails to persuade. Accepting this claim would create a nearly fool-proof
obligations scheme whereby well-organized enterprises can evade liability for financial fraud.
of Wincorp - Behind the veil of compartmentalized departments, an enterprise could induce the investing
YES public to invest in a corporation which is financially unable to pay with promises of definite
returns on investment.
○ Defrauded investors would be hard-pressed to pinpoint from among the various
departments of a corporation which directly enticed them to part with their money.
● Moreover, the totality of circumstances in this case proves that they are either
complicit to the fraud or guilty of gross negligence, as regards the "sans recourse"
transactions from the Power Merge account.
● The board of directors is expected to be more than mere rubber stamps of the
corporation. It wields all corporate powers bestowed by the Corporation Code, including
the control over its properties and the conduct of its business. Being stewards of the
company, the board is primarily charged with protecting the assets of the

corporation in behalf of its stakeholders.
● Cua and the Cualopings failed to observe this fiduciary duty when they assented to
extending a credit line facility to Power Merge.
○ Power Merge is actually Wincorp's largest borrower at about 30% of the total
borrowings, and thus it was incumbent upon the board to have been more
circumspect in approving its credit line facility, and should have made an
independent evaluation of Power Merge's application before agreeing to expose it
to a P2.5 billion risk.
○ Had it fulfilled its fiduciary duty, the obvious warning signs would have cautioned it
from approving the loan in haste: [4 indications]
1) Power Merge has only been in existence for two years when it was granted
a credit facility;
2) Power Merge was thinly capitalized with only P37.5 million subscribed
capital;
3) Power Merge was not an ongoing concern since it never secured the
necessary permits and licenses to conduct business, it never engaged in
any lucrative business, and it did not file the necessary reports with the
SEC; and
4) No security other than its PNs was demanded by Wincorp or was furnished
by Power Merge in relation to the latter's drawdowns.
● Furthermore, prior to Power Merge's application for a credit facility, Virata had already
transacted with Wincorp as a surety for the Hottick obligations that were still unpaid at that
time. But instead of impleading him in the collection suit against Hottick, Wincorp's
board of directors effectively released Virata from liability, and even granted him a
credit facility in the amount of P1.3 billion on the very same day.
● Hence, even if Cua and the Cualopings are not guilty of fraud, they would still be liable
for gross negligence in managing the affairs of the company, to the prejudice of its
clients and stakeholders. They are liable to Ng Wee in their personal capacity.
○ It is immaterial whether they approved of the Side Agreements or authorized Reyes
to sign the same since this could have all been avoided if they were vigilant enough
to disapprove the Power Merge credit application
○ Neither can the business judgment rule apply because it is basic in
corporation law that the doctrine admits of exceptions, including bad faith
and gross negligence.
Whether Estella is liable for the obligations of Wincorp.

Estrella ● The minutes of the February 9, 1999 and March 11, 1999 Wincorp Special Board
(director) is Meetings were considered as damning evidence against Estrella. While the minutes
liable for the were said to be unreliable insofar as Tankiansee is concerned, the RTC rightly
obligations distinguished between the circumstances of Estrella and Tankiansee to justify holding
of Wincorp - Estrella liable.
YES ○ Tankiansee was exempted from liability upon establishing that it was physically
impossible for him to have participated in the said meetings since his immigration
records clearly show that he was outside the country during those specific dates.
○ In contrast, no similar evidence of impossibility was ever offered by Estrella to
support his position that he and Tankiansee are similarly situated.
● The minutes clearly state that Estrella was present during the meetings when the
body approved the grant of a credit line facility to Power Merge. Estrella would even
admit being present during the February 9, 1999 meeting, but attempted to evade
responsibility by claiming that he left the meeting before the "other matters," including
Power Merge's application, could have been discussed.
○ No concrete evidence was ever offered to confirm Estrella's alibi. In both
special meetings scheduled, Estrella averred that he accompanied his wife to a
hospital. However, this claim was never corroborated by any evidence.
● Neither can Estrella be permitted to raise the defense that he is a mere nominee of
Espiritu, the then chairman of the Wincorp board of directors. It is of no moment that
he only had one nominal share in the corporation, just as it is inconsequential
whether he had been receiving compensation or honoraria for attending the

meetings of the board.
○ The fact remains that Estrella accepted the directorship in the Wincorp board, along
with the obligations attached to the position. The fiduciary duty of a company
director cannot conveniently be separated from the position he occupies on
the mere argument that no monetary benefit was being derived therefrom.
○ The gratuitous performance of his duties and functions is not sufficient justification
to do a poor job at steering the company away from foreseeable pitfalls and perils.
○ The careless management of corporate affairs, in itself, amounts to a betrayal
of the trust reposed by the corporate investors, clients, and stakeholders,
regardless of whether or not the board or its individual members are being
paid.
2018 RESOLUTION
● This a resolution of the motions for reconsideration/partial reconsideration filed by Virata. Santos-Tan,
Estrella, Ng Wee, Cua and the Cualopings, Reyes, and Wincorp.
● The grounds relied upon by the movants Virata, Estrella, Ng Wee, Cua and the Cualopings, Reyes, and Wincorp
are the same or substantially similar to those raised in their respective petitions at bar, which have been amply
discussed in the 2017 Decision. Perforce, their motions must be denied.
● Meanwhile, the Court deems it necessary to discuss the issues raised by Santos-Tan, who is only now
participating in the proceedings, in her plea for reconsideration.
○ Santos-Tan never appealed the 2014 Decision and 2015 Resolution of the CA holding her liable with her
co-partners to Ng Wee. Hence, she maintains that the Court does not have jurisdiction over her
person and that, insofar as she is concerned, the CA ruling had already attained finality and can
no longer be modified. Thus, when the Court promulgated its 2017 Decision granting Virata's cross-
claim against her, the Court allegedly altered the CA's final ruling as to her by increasing her exposure, in
net effect.
○ Santos-Tan also claims that she was deprived of her right to due process since she was not afforded
the opportunity to rebut the issue pertaining to Virata's counterclaim, which was allegedly not raised
in Virata's appeal but was granted nonetheless.
○ Finally, Santos-Tan argues that the cross-claim should not have been granted because the Side
Agreements that served as the basis thereof never got the imprimatur of the Board of Directors of
Wincorp. And considering Power Merge’s receipt of a total of P2,183,775,253.11 [P2.1 billion] of
drawdowns from its credit line facility, it would be iniquitous to require Santos-Tan and her co-
directors in Wincorp to reimburse Virata of whatever the latter would be required to pay Ng Wee.
● In his dissent, Justice Tijam submits that the Wincorp directors — specifically Cua, the Cualopings, Santos-
Tan and Estrella — should not be jointly and solidarily liable with Virata, Wincorp, Ong, and Reyes to pay
Ng Wee the amount of his investment.
○ There is lack of proof that the said directors assented to the execution of the Side Agreements ,
barring the Court from holding them personally accountable for fraud. Neither can they be held liable
for gross negligence since they exercised due diligence in conducting the affairs of Wincorp.
ISSUE HELD & RATIO
Whether the The Wincorp directors—Cua, the Cualopings, Santos-Tan and Estrella—are jointly and
Wincorp solidarily liable with Virata, Wincorp, Ong, and Reyes to pay Ng Wee,
directors are not ● Had the directors fulfilled their fiduciary duty, the obvious warning signs would
jointly and have cautioned them from approving the loan in haste. [see 4 indications above]
solidarily liable ● As regards Santos-Tan, she would likewise be liable in her personal capacity under Sec.
with Virata, 31 of the Corporation Code. Her liability is no different from that of Cua and the
Cualopings. She cannot utilize the separate juridical personality of Wincorp as a shield
Wincorp, Ong,
when she, along with the other board members, approved the credit line application
and Reyes - NO of Power Merge in the amount of P2.5 billion despite the glaring signs that it
would be unable to make good its obligation.
● The failure to heed these warning signs constitutes gross negligence, if not fraud, for
which the members of the board could be held personally accountable.

The Wincorp board of directors also impliedly ratified the signing of the Side Agreements.
● Even though there is no document traceable to the Wincorp directors expressly
authorizing the execution of the Side Agreements, the totality of the circumstances
supports the conclusion that the Wincorp directors impliedly ratified, if not
secretly authorized, the signing of the Side Agreements in order to lay the
groundwork for the fraudulent scheme.
○ The adoption or ratification of a contract by a corporation is nothing more nor
less than the making of an original contract. Any ratification or adoption is
equivalent to a grant of prior authority. (Board of Liquidators v. Heirs of Kalaw)
○ Implied ratification may take the form of silence, acquiescence, acts
consistent with approval of the act, or acceptance or retention of benefits.
For an act to constitute an implied ratification, there must be no acceptable
explanation for the act other than that there is an intention to adopt the act as his
or her own. (University of Mindanao, Inc. v. BSP)
● The Wincorp board of directors' approval of the CLA, notwithstanding the telltale
signs and circumstances, establishes the directors’ liability to Ng Wee.
○ If these do not attest to their privity to Wincorp's fraudulent scheme, they would,
at the very least, prove that the directors are guilty of gross negligence in
managing the company affairs.
○ They should not have allowed the exclusion of Virata from the collection
suit against Hottick knowing that he is a surety thereof. As revealed by their
subsequent actions, this was not a mere error in judgment but a calculated
maneuver to defraud its investors.
○ Hence, the Court did not err when it ruled that Sec. 31 of the Corporation Code
must be applied, and the separate juridical personality of Wincorp, pierced.
● It is also highly suspect that the directors, aside from Estrella, did not question
why the case proceeded without the board chairman, Espiritu.
○ There were 17 named defendants in the civil case, which included the entire
composition of the Wincorp board of directors.
○ If the directors truly believed that they are on par with each other in terms of
participation, then they should have instituted a cross-claim against Espiritu, or
at least objected against his being dropped as a party defendant.
[Procedural] The Court has jurisdiction over the person of Santos-Tan,

Whether the Court ● Virata and Reyes specifically impleaded Santos-Tan as one of the party respondents in their
has jurisdiction respective petitions. Through her designation as a party respondent in the said appeals,
over the person of the Court validly acquired jurisdiction over her person, and prevented the assailed 2014
Santos-Tan - YES Decision and 2015 Resolution of the CA from attaining finality as to her.
[Procedural] Santos-Tan was not denied due process,

Whether Santos- ● Virata raised his claim against his co-parties as early as the filing of his Answer to Ng
Tan was denied Wee's Complaint. The claim was then ventilated in trial where the extent of the liability of each
due process when party had been ascertained. Virata, Santos-Tan, and their co-parties would contest the findings of
the Court granted the trial court to the CA, but to no avail. Eventually, the controversy was elevated to the SC.
Virata’s cross- ● The implication of Virata's persistent plea to be absolved of civil liability is to shift the burden
claim - NO entirely to his co-parties. He was essentially re-asserting his cross-claim, as against Santos-
Tan included.
○ However, Santos-Tan inexplicably waived her right to address the allegations in Virata's
bid for exoneration in his petition, despite having been impleaded as party respondent.
○ Santos-Tan had all the opportunity to counter Virata's allegations in his petition, but did
not avail of the same. She only has herself to blame, not only for failing to appeal the
CA’s ruling, but also for her conscious refusal to even file a comment on the petitions in
the case at bar.
● Even though the cross-claim was not explicitly raised as an issue in Virata's petition, the
request is subsumed under the general prayer for equitable relief.
○ The grant of the cross-claim is only the logical consequence of the Court's finding that the
Side Agreements, although not binding on Ng Wee and the other investors, are binding
against the parties thereto.
○ Under the terms of the Side Agreements, the only liability of Power Merge is not to pay
for the PNs it issued, but to return and deliver to Wincorp all the rights, titles and interests

conveyed to it by Wincorp over the Hottick obligations
○ Thus, any payment made by Virata for this liability would nevertheless still be subject to
the right of reimbursement from Wincorp by virtue of the Side Agreements.
2017 DECISION, OTHER ISSUES

ISSUE HELD & RATIO
[Procedural] Ng Wee is the real party in interest.

Whether Ng ● As a general rule, every action must be prosecuted or defended in the name of the real party in interest.
Wee is the Rule 3, Sec. 2 of the ROC defines a real party in interest as "the party who stands to be benefited
real party in or injured by the judgment in the suit, or the party entitled to the avails of the suit."
interest - YES ● It is worth recalling that the procedural issue on whether Ng Wee is the real party in interest had already
been resolved by this Court in G.R. No. 162928. There, the Court found neither abuse of discretion
on the part of the RTC nor reversible error on the CA when they ruled that Ng Wee had the legal
personality to file the complaint to recover his investments. The resolutions by the CA and this
Court sustaining the RTC Order had already attained finality and could no longer be modified.
Therefore, the parties are barred from re-raising the issues settled therein, pursuant to the law of
the case doctrine.
o The law of the case doctrine applies where an appellate court has made a ruling on a
question on appeal and thereafter remands the case to the lower court for further
proceedings; the question settled by the appellate court becomes the law of the case at
the lower court and in any subsequent appeal.
o It means that whatever is irrevocably established as the controlling legal rule or decision
between the same parties in the same case continues to be the law of the case, whether
correct on general principles or not, so long as the facts on which the decision was predicated
continue to be the facts of the case before the court.
● It is inconsequential that the issue raised in G.R. No. 162928 pertained to the alleged grave abuse of
discretion committed by the RTC in denying the motions to dismiss, and not to the merits of the motions
to dismiss per se, since there is no substantial distinction between an appeal and a Petition for
Certiorari when it comes to the application of the doctrine.
[Procedural] Ng Wee successfully stated a cause of action based on a hypothetical admission of the allegations in
Whether Ng his complaint.
Wee was able ● When the affirmative defense of dismissal is grounded on the failure to state a cause of action, a ruling
to state a thereon should be based on the facts alleged in the complaint.
cause of ● Thus, whether Ng Wee successfully stated a cause of action requires hypothetically admitting and
action - YES scrutinizing the allegations in his complaint.
● In this case, there is sufficient allegation that Ng Wee is the actual injured party in the failed
investment. As the alleged owner of the funds placed under the names of his trustees, Ng Wee lost
P213,290,410.36 from Power Merge's default and non-payment of its obligations under the credit facility
extended by the investment house.
● The trustees were also straightforward in their testimonies that the funds invested in Power
Merge belonged to Ng Wee, albeit recorded under their names. They also executed documents
denominated as "Declaration of Trust" wherein they categorically stated that they merely held the funds
in trust for Ng Wee, the beneficial owner.
● Wincorp employees Ruben Tobias and Gilda Lucena likewise testified that they were instructed by Ng
Wee to rename several of his investments under the Power Merge Account to the names of Alex Lim
Tan and Robert Tabada Tan. Effectively, the Wincorp employees corroborated the claim of Ng Wee
that the investments in Power Merge that were recorded under those names are actually
respondent Ng Wee's.
● Therefore, Ng Wee is the real party in interest in the present case.
o Having established that Ng Wee is the real party in interest and that he is the beneficial owner
of the investments under the names of his trustees, his entitlement to recover the
P213,290,410.36 becomes indubitable, the only question is from whom can Ng Wee recover
the said investment.

Whether ONLY WINCORP IS LIABLE TO NG WEE FOR FRAUD.
Wincorp and
Power Merge That Wincorp defrauded Ng Wee is a finding of fact that is conclusive on this Court.
are liable to
● While there are exceptions to the general rule that findings of fact are conclusive to the court,
Ng Wee for
Wincorp failed to establish that any of these exceptions exist in the present case. Thus, the
fraud -
Court must sustain the finding of the RTC, as affirmed by the CA, that Wincorp is liable
Wincorp
to Ng Wee for perpetrating an elaborate scheme to defraud its investors.
alone is
liable for o Ng Wee would not have invested in the "sans recourse" transactions under Power
fraud Merge’s account had he not been deceived into believing that Power Merge is
financially capable of paying the returns of his investments.
o Wincorp accredited Power Merge as a borrower and extended it a credit line
notwithstanding a number of signs that indicate its inability to perform its
obligations:
▪ Power Merge had only been in existence as a corporation for barely 2
years when it was accredited as a borrower;
▪ Power Merge is a thinly capitalized corporation with only P37.5 million
subscribed capital stock;
▪ Despite the fact that Power Merge's principal place of business is at Makati
City, it has neither registered nor conducted any business in Makati;
▪ It is not engaged in any lucrative business to finance its operation;
▪ From the time of its incorporation until the revocation of its Certificate of
Incorporation, Power Merge has failed to file annual reports required by the
SEC such as General Information Sheets and Financial Statements; and
▪ No security was demanded by Wincorp or furnished by Power Merge in
relation to its credit line and drawdowns.
o The intent to defraud Ng Wee was also manifest based on how Wincorp and Power
Merge entered into a CLA and amended it just a month after. They also
simultaneously executed two Side Agreements on the same date as the credit
agreements, by the same parties, acknowledged before the same notary public, and
have the same exact provisions, including the provision to relieve Power Merge from
any liability arising from the execution of the agreements and the PNs.
o Fraud has been defined as the voluntary execution of a wrongful act, or a
willful omission, knowing and intending the effects which naturally and
necessarily arise from such act or omission. In its general sense, it is deemed to
comprise anything calculated to deceive, including all acts and omissions and
concealment involving a breach of legal or equitable duty, trust, or confidence justly
reposed, resulting in damage to another, or by which an undue and unconscientious
advantage is taken of another.
o Under Art. 1170 of the NCC, those who in the performance of their obligations
are guilty of fraud are liable for damages. Fraud in this sense refers to the
deliberate and intentional evasion of the normal fulfillment of obligation.
o This provision is applicable in the case at bar, since Wincorp exerted insidious
machinations upon Ng Wee in order to deceive the latter into investing a
significant amount into a mere empty shell of a corporation. Instead of guarding
the investments of its clients, Wincorp even executed Side Agreements that virtually
exonerated Power Merge of liability to them.
▪ The profits which Wincorp promised to the investors would not be realized
by virtue of the Side Agreements. The investors were kept in the dark as
regards the existence of these documents, and were instead presented
with Confirmation Advices from Wincorp to give the transactions a
semblance of legitimacy, and to deceive the investors to roll over their
investments.
The "sans recourse" transactions cannot exempt Wincorp from liability for having been
offered in violation of commercial laws.
● Wincorp claims that as a mere agent or broker, it cannot be held liable for the invested
amount in case of an unsuccessful or failed match and that it is merely tasked to deliver the

amount to be loaned to the borrower, and does not guarantee its borrowers' financial
capacity. This argument is untenable.
1. The "sans recourse" transactions are deemed "with recourse."5
● An investment house is an enterprise that engages in the underwriting of securities
of other corporations. Securities undertaking refers to the process by which
underwriters raise capital investments on behalf of the corporation issuing the
securities.
● Aside from performing the regular powers of a corporation under the Corp. Code, a
duly licensed investment house is granted additional powers under Sec. 7 of
BP 129.6
● However, the authority to perform quasi-banking functions is not included in
the additional powers of an investment house. Even as a financial
intermediary, investment houses are not allowed to engage in quasi-banking
functions, unless authorized by the Monetary Board through the issuance of a
Certificate of Authority.
○ Quasi-banking function is defined as the borrowing of funds for the
borrower's own account from 20 or more persons or corporate lenders
at any one time, through the issuance, endorsement or acceptance of debt
instruments of any kind with recourse.7
○ Given this definition, it would appear on paper that offering the “sans
recourse" transactions does not qualify as the performance of a quasi-
banking function specifically because it is without recourse against Wincorp.
○ In fact, under S4101Q.3 of the Manual of Regulations for Non-Bank
Financial Institutions, transactions not considered as quasi-banking include
the mere buying and selling without recourse of instruments.
● Nonetheless, the true nature of the "sans recourse" transactions contradicts
Wincorp's averment, since Wincorp engaged in practices that rendered the
transactions to be "with recourse" and, consequently, within the ambit of
quasi-banking rules.
a. Wincorp did not act as a mere financial intermediary between Ng Wee
and Power Merge, but effectively obtained the funds for its own
account.
● Wincorp’s end goal was to assign its rights to the uncollected
Hottick obligations and hold more valuable Power Merge papers in
their stead. Without enticing the investors to put up capital for
Power Merge, Wincorp would not have been able to facilitate the
exchange.
● Thus, with Power Merge as a conduit, Wincorp's borrowings from its
investors redounded to its benefit.
b. The SEC also found that Wincorp has sourced funds from 2,200
individuals with an average of P7 billion worth of commercial papers per
month, clearly in excess of the "20 or more persons or corporate lenders"
threshold.
c. The Confirmation Advices that are marked "sans recourse" are
actually "with recourse."
● Pursuant to the Manual of Regulations for Non-Bank Financial
Institutions, Wincorp's act of advancing the payment of interests
when the corporate borrower is unable to pay despite the borrowing
being branded as without recourse, rendered it to be with
5
Omnibus Rules and Regulations for Investment Houses and Universal Banks Registered as Underwriters
6
S4101Q.3 of the Manual of Regulations for Non-Bank Financial Institutions states that: “any of the following practices or practices
similar and/or tantamount thereto in connection with a without recourse transaction rendered such transaction as with recourse and
within the purview of the rules on quasi-banking. xxx xxx xxx (iii) Payment with the funds of the financial intermediary which assigned,
sold or transferred the debt instrument without recourse.”
7
DN: TLDR, Wincorp is an investment house. Investment houses cannot engage in quasi-banking functions. Quasi-functions include
borrowing from 20 or more lenders with recourse. Since Wincorp denominated its transaction as “sans recourse,” it seems to be outside
of quasi-banking functions. But considering the facts, the transactions should actually be deemed as “with recourse,” and thus Wincorp
is actually engaging in quasi-banking functions, which as an investment house it cannot do.

recourse.8
● Therefore, Wincorp’s offering of “sans recourse transactions” should be categorized
as an exercise of a quasi-banking function, which cannot be used by Wincorp as
a shield against its liability to Ng Wee.
2. Wincorp engaged in the sale of unregistered securities.
● Wincorp was not only engaged in brokering of loans, but was in reality selling
securities to the public as shares in the Power Merge credit in the form of
investment credits.
○ Securities are shares, participation or interests in a corporation evidenced
by a certificate, contract, instruments, whether written or electronic in
character. As a general rule, securities are not to be sold, offered, or
distributed without due registration, and provided that information on
the securities shall be made available to prospective purchasers.
○ Included in the list of securities that require registration are investment
contracts, whereby persons invest their money in a common enterprise and
are led to expect profits primarily from the efforts of others. It is presumed to
exist whenever a person seeks to use the money or property of others on
the promise of profits.
● In the Philippines, the Court uses the Howey test to determine whether the
security being offered takes the form of an investment contract.9 Under this
test, the following must concur for an investment contract to exist, which are all
present in this case:
1. A contract, transaction, or scheme → Wincorp offered "sans recourse"
transactions wherein investors would be matched with pre-screened corporate
borrowers.
2. An investment of money → Ng Wee invested P213,290,410.36 in the "sans
recourse" transactions through his trustees.
3. Investment is made in a common enterprise → Prior to being matched with
a corporate borrower, all the money infused by the investors are pooled in an
account maintained by Wincorp.
4. Expectation of profits → According to the Confirmation Advices, Ng Wee’s
funds were supposed to earn 13.5% at their respective maturity dates.
5. Profits arising primarily from the efforts of others → The profitability of
the enterprise depended largely on whether Wincorp would be able to match the
investors with their approved corporate borrowers.
● Since it was dealing in securities, Wincorp was under legal obligation to comply
with the statutory registration and disclosure requirements under BP 178 or the
Revised Securities Act.
○ Sec. 4 requires the registration of securities before they may be sold,
offered for sale, or distributed to the public.
○ Sec. 8 provides the procedure for registration, under which any dealer or
underwriter interested in the sale of securities shall file a sworn registration
statement containing:
■ A statement of the capitalization of the issuer, the number and
classes of share and the par value thereof, and a description of the
rights with respect to each class;
■ The specific purposes and the approximate amounts to be devoted
to such purposes for which the security to be offered is to supply
funds;
■ A balance sheet as of a date not more than 90 days prior to the
date of the filing of the registration statement showing all of the
assets and liabilities of the issuer;
■ A profit and loss statement of the issuer showing earnings and
income, and the expenses and fixed charges; and
8
Securities and Exchange Commission v. W.J. Howey Co., 328 U.S. 293 (1946).
9
See Annex 3.

■ A copy of any agreement or agreements made with any
underwriter.
● By alleging that it is merely brokering loans, Wincorp failed to disclose to the
investors the necessary information under Sec. 8 of BP 178.
○ In this case, the non-disclosure of the capitalization details and financial
statements of Power Merge (issuer) resulted in the failure of the investors to
pay heed to the red flags that the enterprise was doomed to fail.
○ Investors were also prevented from discovering the true intent behind the
approval of the Power Merge credit line application and the underlying
transactions behind its issuance of PNs.
● In sum, because Wincorp successfully passed off the “sans recourse”
transactions as mere brokering of loans, it circumvented the registration and
disclosure requirements under BP 178 and committed fraud against its
creditors, for which it should be held liable.
3. Wincorp is liable as a vendor in bad faith and for breach of warranty.
● Just as in any other contract of sale, the vendor of securities is bound by certain
warranties, including those contained in Art. 1628 of the NCC, under which the
vendor shall be responsible for the existence and legality of the credit at the
time of the sale, and the vendor in bad faith shall always be answerable for
damages.
● In this case, other than the fraudulent designation of the transaction as "sans
recourse," Wincorp's bad faith was also evident from the execution of the Side
Agreements, which cast serious suspicion over the existence and legality of
the credits assigned to Ng Wee.
● Wincorp’s acts of misrepresentation which constituted fraud in its transactions with
Ng Wee are the very same acts that amounted to bad faith on its part as a vendor of
securities. Wincorp is liable because of its dishonest dealings.
○ No amount of investigation could have revealed that the Power Merge
papers are rendered worthless and non-collectible because of the Side
Agreements entered into by Wincorp and Power Merge.
○ And even assuming that Ng Wee made an investigation, it should not
preclude Ng Wee from relying on the representations of Wincorp because it
is an investment house which is presumed to conduct an investigation of its
borrowers before it matches the same to its investors, and because Wincorp
also failed to disclose that the instruments executed by Power Merge in
connection with the investments of Ng Wee are worthless in view of the
Side Agreements.
4. Even as an agent, Wincorp can still be held liable.
● Through the contract of agency, a person binds himself to render some service or to
do something in representation or on behalf of another, with the consent or authority
of the latter. As the basis of agency is representation, there must be an actual
intention on the part of the principal to appoint. In the same manner, there
must be an intention on the part of the agent to accept the appointment and
act upon it. Absent such mutual intent, there is generally no agency.
● In the instant case, the SPAs executed by Ng Wee constituted Wincorp as agent
relative to the borrowings of Power Merge. However, the SPAs, as couched, do
not specifically include a provision empowering Wincorp to excuse Power
Merge from repaying the amounts it had drawn from its credit line via the Side
Agreements.
○ In other words, Wincorp had no authority to absolve Power Merge from
the latter's indebtedness to its lenders. Doing so therefore violated the
express terms of the SPAs that limited Wincorp's authority to contracting the
loan.
● The execution of the Side Agreements cannot be considered as part of
Wincorp's authority since it was not mentioned with specificity in the SPAs.
As far as the investors are concerned, the Side Agreements amounted to a
gratuitous waiver of Power Merge's obligation, which authority is required under the
law to be contained in an SPA for its accomplishment

● Finally, the benefit from the Side Agreements, if any, redounded instead to the
agent itself, Wincorp, which was able to hold Power Merge papers that are more
valuable than the outstanding Hottick obligations that it exchanged. In discharging
its duties as an alleged agent, Wincorp elected to prioritize its own interest
than that of its principal, in clear contravention of the law.
POWER MERGE IS NOT GUILTY OF FRAUD, BUT IS STILL LIABLE UNDER CONTRACT.
● The circumstances of this case indicate that Power Merge and Virata were not active
parties in defrauding Ng Wee. Instead, the company was used as a mere conduit in
order for Wincorp to be able to conceal its act of directly borrowing funds for its own
account. This is made evident by one highly peculiar detail: the date of the Power Merge's
drawdowns.
o As indicated in Power Merge’s schedule of drawdowns, Wincorp already released
to Power Merge sums of money before the CLA was executed and amended.
o This lends credence to Virata's claim that Wincorp did not intend for Power Merge
to be strictly bound by the terms of the credit facility; instead, there was already an
understanding between the parties on what their respective obligations will
be.
o The underlying transaction would later on be revealed through the Side
Agreements, the tenor of which amounted to Wincorp's cancellation of Power
Merge and Virata's obligation under their PNs in exchange for their obligation
to transfer equity shares in UDPI and Cavitex in favor of Wincorp. In other
words, an arm's length transaction has taken place, and as far as Wincorp, Power
Merge, and Virata are concerned, the PNs had already been discharged.
o Between Wincorp and Power Merge, it is Wincorp that is bound to disclose to
the investors the existence and execution of the Side Agreements. Failure to
do so only goes to show that the target of Wincorp's fraud is not any particular
individual, but the public at large. On the other hand, it was not Power Merge's
positive legal duty to forewarn the investors of its discharge since the
company did not deal with them directly. They merely relied on their underlying
agreement with Wincorp that they would not be liable for the PNs issued.
● Therefore, only Wincorp can be held liable for fraud. Nevertheless, Power Merge and Virata
can still be held liable under their contracts.
Power Merge is liable to Ng Wee under its Promissory Notes 10

1. Virata is liable for the Promissory Notes even as an accommodation party.
● Under Sec. 60 of NIL, the maker of a promissory note engages that he will pay
it according to its tenor.
○ Under the PNs executed by Virata in behalf of Power Merge, 11 it is clear that
Power Merge, through Virata, obligated itself to pay Wincorp and those who
invested through it the values stated in the PNs.
● Virata did not contest the validity and due execution of the PNs but argued that he
merely executed the PNs on behalf of Power Merge as an accommodation party
and that neither he nor Power Merge received any benefit from the credit facility.
Thus he and Power Merge cannot be held liable.
● Virata’s claims are untenable because the evidence shows that Power Merge
actually received the proceeds from the CLA. And even assuming that Virata is a
mere accommodation party, liability would still attach to them in favor of the
holder of the instrument for value.
○ An accommodation party is one who meets all the following three requisites:
(1) he must be a party to the instrument, signing as maker, drawer,
acceptor, or indorser; (2) he must not receive value therefor; and (3) he
must sign for the purpose of lending his name or credit to some other
person. (Gonzales v. PCIB)
10
DN: Disini war flashbacks
11
See Annex 4

●Virata, as an accommodation party, is liable pursuant to Sec. 29 of NIL, which
states that an accommodation party is liable on the instrument to a holder for
value, notwithstanding such holder, at the time of taking the instrument, knew
him to be only an accommodation party.
○ The basis for the liability under Sec. 29 is the underlying relation between
the accommodated party and the accommodation party, which is one of
principal and surety.
○ The accommodation party in a negotiable instrument is deemed an original
promisor and debtor from the beginning; he is considered in law as the
same party as the debtor since their liabilities are so interwoven as to be
inseparable.
● Therefore, Power Merge and Virata can be held liable for the amounts stated in the
PNs as well as for the assignment to Ng Wee of portions thereof as embodied in the
Confirmation Advices.
2. The Side Agreements do not bind third parties thereto.
● Under the principle of relativity of contracts, contracts take effect only between
the parties, their assigns and heirs.
○ The sound reason for the exclusion of non-parties to an agreement is the
absence of a vinculum or juridical tie which is the efficient cause for the
establishment of an obligation.
● Virata and Power Merge cannot invoke the Side Agreements to seek
exemption from liability to Ng Wee because the latter was not privy to the
covenants. Ng Wee cannot be charged with knowing the existence of the Side
Agreements, let alone ratify the same.
○ Ng Wee does not fall under any of the classes that are deemed privy to the
Side Agreements. He only authorized Wincorp, through the SPAs, to agree,
deliver, sign, and execute loan documents relative to the borrowing of
Power Merge, and not to excuse Power Merge from paying its obligations
under the PNs.
○ Even if the execution of the Side Agreements was given imprimatur by the
Wincorp board of directors, Power Merge would still have been able to
determine based on the SPAs that Wincorp's acquiescence to the Side
Agreements is an ultra vires act insofar as its principals, including Ng Wee,
are concerned.
3. Power Merge cannot escape liability to Ng Wee under the Credit Line Agreement.
● Under the terms of the CLA, Power Merge obligated itself to issue Promissory
Notes in favor of Wincorp, for itself "or on behalf of certain investors" for each
of its drawdowns.12
● Thus, Virata and Power Merge cannot deny knowledge that the amounts that
were drawn against the credit facility may potentially be from the monies
pooled by Wincorp’s clients, even though their identities were at that time
anonymous to Power Merge.
○ Power Merge was informed through the plain text of the CLA that Wincorp
may indorse portions of the investment, and the corresponding interest in
the Promissory Notes, to its willing clients and act on the latter's behalf.
○ It does not matter that Power Merge and Virata never personally dealt with
Ng Wee since Ng Wee became privy to the CLA when he was assigned his
shares in the investment, and when he expressed his conformity therewith
through the Confirmation Advices.
12
NCC, Article 2066. The guarantor who pays for a debtor must be indemnified by the latter.
The indemnity comprises:

(1) The total amount of the debt;
(2) The legal interests thereon from the time the payment was made known to the debtor, even though it did not earn interest for
the creditor;
(3) The expenses incurred by the guarantor after having notified the debtor that payment had been demanded of him;
(4) Damages, if they are due.

● This was also not the first time for Virata to transact with Wincorp. Virata
executed a Surety Agreement to answer Hottick's drawdowns from its own credit
facility with Wincorp. He is then familiar with the nature of Wincorp's primary
functions, whether as a mere financial intermediary or dealer in securities. Power
Merge and Virata cannot feign ignorance that the money they have been receiving
are from the clients that Wincorp attracted to invest.
Whether Virata is liable for the obligations of Power Merge.

Virata is ● A corporation is an entity separate and distinct from its stockholders and from other
liable for the corporations to which it may be connected. However, this separate and distinct personality
obligations of a corporation is merely a fiction created by law for convenience and to promote justice.
of Power ● Thus, when the notion of separate juridical personality is used (1) to defeat public
Merge - YES convenience, justify wrong, protect fraud or defend crime; (2) as a device to defeat the labor
laws; or (3) when the corporation is merely an adjunct, a business conduit or an alter
ego of another corporation, this separate personality of the corporation may be
disregarded or the veil of corporate fiction pierced.
● Jurisprudence provides a three-pronged test to determine the application of the alter ego
theory:
1. Control, not mere majority or complete stock control, but complete domination, not
only of finances but of policy and business practice in respect to the transaction
attacked so that the corporate entity as to this transaction had at the time no
separate mind, will or existence of its own;
2. Such control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and
unjust act in contravention of plaintiff's legal right; and
3. The control and breach of duty must have proximately caused the injury or unjust
loss complained of.
● The circumstances of Power Merge clearly present an alter ego case that warrants the
piercing of the corporate veil.
○ Virata exercised complete control of Power Merge—not only is he the company
president, but he also owns 374,996 out of 375,000 of its subscribed capital stock.
The remainder was left for the nominal incorporators of the business.
○ The reported address of Virata and the principal office of Power Merge are one and
the same.
○ Power Merge was merely created to fulfill Virata’s obligations under the Waiver and
Quitclaim, the same obligations for his release from liability arising from Hottick's
default and non-payment.
● In order to settle the outstanding obligations of Hottick under the terms of the settlement
agreement, Virata effectively allowed Power Merge to be used as Wincorp's pawn in
avoiding its legal duty to pay the investors under the failed investment scheme.
● Hence, Virata should be made liable for his and Power Merge's obligations.
Whether UEM-MARA cannot be held liable.

UEM-MARA ● UEM-MARA is an entity distinct and separate from Power Merge, and it was not
is liable - NO established that it was guilty in perpetrating fraud against the investors.
○ It was a non-party to the "sans recourse" transactions, the CLA, the Side
Agreements, the PNs, the Confirmation Advices, and to the other transactions that
involved Wincorp, Power Merge, and Ng Wee.
● Ng Wee has no cause of action against UEM-MARA, and the latter should not have
been impleaded in this case.
○ The essential elements of a cause of action are:
1. A right in favor of the plaintiff;
2. An obligation on the part of the defendant not to violate such right; and
3. An act or omission on the part of such defendant in violation of the right of
the plaintiff for which the latter may maintain an action for recovery of
damages or other appropriate relief.
○ The third requisite is absent in this case. Ng Wee cannot point to a specific

wrong committed by UEM-MARA against him in relation to his investments in
Wincorp, other than being the object of Wincorp's desires. He merely alleged that
the proceeds of the Power Merge loan was used by Virata in order to acquire
interests in UEM-MARA, but this does not constitute a valid cause of action against
the company, even if it were true.
Whether the The Side Agreements remain to be binding and enforceable on Wincorp, Virata, and Power
Side Merge.
Agreements ● Virata is entitled to be reimbursed by his co-parties of the amount that he and UEM-
are binding MARA may be adjudged to be liable for.
on the ○ Neither the RTC nor the CA nullified the contract; they merely held that the
parties - YES agreements cannot be used as protection against liability for repayment to the
investors, without more.
○ As such, the Side Agreements remain to be binding and enforceable on the
parties thereto.
● As per the language of the Side Agreements themselves, what transpired was an arm's
length transaction, wherein in exchange for Wincorp assuming liability for Power Merge's
drawdowns and PNs, Power Merge obligated itself to return and deliver to Wincorp all the
rights, title and interests conveyed by Wincorp to Power Merge over the Hottick obligations.
It appears then that there is ample consideration for the release.
● Based on the relevant portions of the Waiver and Quitclaim and the Side Agreements, the
parties did not intend to create a payment obligation on the part of Power Merge ,
since the latter was merely used as a conduit by Wincorp for the acquisition of equity
shares. They also confirm that Power Merge was a mere accommodation party to the
issuance of the PNs that Wincorp sold to its clients.
○ Though these circumstances do not exculpate Power Merge and Virata from paying
a holder for value under the negotiable instruments they issued, they nevertheless
entitle Power Merge and Virata, as surety, to indemnification by way of
reimbursement from Wincorp and its liable directors and officers for any
amount stated in the note that Virata and Power Merge would be compelled to
defray, pursuant to Art. 2066 of the NCC.13
Award of ● Ng Wee should first be recompensed for the maturity amount of the investments he
damages made in Power Merge through Wincorp, which totalled P213,290,410.36.
○ The amount shall earn interest at 12% per annum from the date of filing of the
Complaint on October 19, 2000 until June 30, 2013, and 6% from July 1, 2013 until
full satisfaction. (Nacar v. Gallery Frames)
● Moreover, the CLA provides for a stipulation of 3% additional monthly interest as penalty,
20% interest of the entire amount due as liquidated damages, and 25% of the entire amount
due as attorney's fees.
○ The 3% additional monthly penalty interest cannot be imposed. Such exorbitant
interest rate is void for being contrary to morals, if not against the law. Being a void
stipulation, the monthly penalty interest is deemed inexistent from the beginning.
The legal interest pursuant to Nacar is deemed sufficient.
○ The 20% liquidated damages must be reduced to 10%. Under Art. 2227 of the
NCC, the Court has the right to temper liquidated damages if they are
unconscionable.
○ The Court likewise tempers the stipulated rate of attorney's fees to 5% of the
total amount due on Ng Wee's investment. Art. 2008 of the NCC mandates that
in all cases, the attorney’s fees and expenses of litigation must be reasonable.
● Finally, the Court sees no reason to disturb the RTC's award of moral damages in favor of
Ng Wee in the amount of P100,000.
○ Moral damages are not punitive in nature and were never intended to enrich the
claimant at the expense of the defendant. Trial courts are given discretion in
determining the amount, with the limitation that it should not be palpably and
scandalously excessive.
13
Note that this director would not appeal the decision of the CA. She is one of the movants in the 2018 MR.

○ Ng Wee's claim for moral damages in the amount of P5 million is too excessive,
even with the principal amount in mind.
2017 DECISION
WHEREFORE, premises considered, the Court resolves:
1. To PARTIALLY GRANT the Petition for Review on Certiorari of Luis Juan L. Virata and UEM-MARA, docketed as
G.R. No. 220926;
2. To DENY the Petition for Review on Certiorari of Westmont Investment Corporation, docketed as G.R. No.
221058;
3. To DENY the Petition for Review of Manuel Estrella, docketed as G.R. No. 221109;
4. To DENY the Petition for Review on Certiorari of Simeon Cua, Henry Cualoping, and Vicente Cualoping, docketed
as G.R. No. 221135; and
5. To DENY the Petition for Review on Certiorari of Anthony Reyes, docketed as G.R. No. 221218
The September 30, 2014 Decision and October 14, 2015 Resolution of the Court of Appeals in CA-G.R. CV No. 97817
affirming the July 8, 2011, Decision of the Regional Trial Court, Branch 39 of Manila is hereby AFFIRMED with
MODIFICATION. As modified, the dispositive portion of the trial court Decision in Civil Case No. 00-99006 shall read:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff, ordering the defendants Luis L.
Virata, Westmont Investment Corporation (Wincorp), Antonio T. Ong, Anthony T. Reyes, Simeon Cua, Vicente and Henry
Cualoping, Mariza Santos-Tan, and Manuel Estrella to jointly and severally pay plaintiff as follows:
1. The sum of Two Hundred Thirteen Million Two Hundred Ninety Thousand Four Hundred Ten and 36/100 Pesos
(P213,290,410.36), which is the maturity amount of plaintiff's investment with legal interest at the rate of twelve
(12%) percent per annum from the date of filing of the complaint on October 19, 2000 until June 30, 2013 and six
percent (6%) from July 1, 2013 until fully paid;
2. Liquidated damages equivalent to ten percent (10%) of the maturity amount, and attorney's fees equivalent to five
percent (5%) of the total amount due plus legal interest at the rate of twelve (12%) percent per annum from the
date of filing of the complaint until June 30, 2013 and six percent (6%) from July 1, 2013 until fully paid;
3. P100,000.00 as moral damages.
4. Additional interest of six percent (6%) per annum of the total monetary awards, computed from finality of judgment
until full satisfaction.
5. The complaint against defendants Manuel Tankiansee and UEMMARA Philippines Corporation is dismissed for
lack of merit.
The cross claim of Luis Juan L. Virata is hereby GRANTED. Westmont Investment Corporation (Wincorp), Antonio T.
Ong, Anthony T. Reyes, Simeon Cua, Vicente and Henry Cualoping, Mariza Santos-Tan, and Manuel Estrella are hereby
ordered jointly and severally liable to pay and reimburse Luis Juan L. Virata for any payment or contribution he (Luis Juan
L. Virata) may make or be compelled to make to satisfy the amount due to plaintiff Alejandro Ng Wee. All other
counterclaims against Alejandro Ng Wee and crossclaims by the defendants as against each other are dismissed for lack
of merit.
2018 RESOLUTION
WHEREFORE, premises considered, the following motions are hereby DENIED for lack of merit:
a. Motion for Partial Reconsideration filed by Luis Juan L. Virata;
b. Motion for Reconsideration of Mariza Santos-Tan;
c. Motion for Reconsideration of Manuel Estrella;
d. Motion for Partial Reconsideration of Alejandro Ng Wee;
e. Motion for Reconsideration of Simeon Cua, Vicente Cualoping, and Henry Cualoping;
f. Motion for Reconsideration of Anthony T. Reyes; and
g. Motion for Reconsideration of Westmont Investment Corporation.
No further pleadings or motions will be entertained. Let entry of judgment be issued.
NOTES
PD 129, SEC. 7. Powers. In addition to the powers granted to corporations in general, an Investment House is authorized to do the
following:
1. Arrange to distribute on a guaranteed basis securities of other corporations and of the Government or its instrumentalities;

2. Participate in a syndicate undertaking to purchase and sell, distribute or arrange to distribute on a guaranteed basis securities
of other corporations and of the Government or its instrumentalities;
3. Arrange to distribute or participate in a syndicate undertaking to purchase and sell on a best-efforts basis securities of other
corporations and of the Government or its instrumentalities;
4. Participate as soliciting dealer or selling group member in tender offers, block sales, or exchange offering or securities; deal in
options, rights or warrants relating to securities and such other powers which a dealer may exercise under the Securities Act
(Act No. 83, as amended);
5. Promote, sponsor, or otherwise assist and implement ventures, projects and programs that contribute to the economy's
development;
6. Act as financial consultant, investment adviser, or broker;
7. Act as porfolio manager, and/or financial agent, but not as trustee of a trust fund or trust property as provided for in Chapter VII
of Republic Act No. 337, as amended;
8. Encourage companies to go public, and initiate and/or promote, whenever warranted, the formation, merger, consolidation,
reorganization, or recapitalization of productive enterprises, by providing assistance or participation in the form of debt or
equity financing or through the extension of financial or technical advice or service;
9. Undertake or contract for researches, studies and surveys on such matters as business and economic conditions of various
countries, the structure of financial markets, the institutional arrangements for mobilizing investments;
10. Acquire, own, hold, lease or obtain an interest in real and/or personal property as may be necessary or appropriate to carry on
its objectives and purposes;
11. Design pension, profit-sharing and other employee benefits plans; and
12. Such other activities or business ventures as are directly or indirectly related to the dealing in securities and other commercial
papers, unless otherwise governed or prohibited by special laws, in which case the special law shall apply.
Nothing in this section shall preclude other enterprises not covered by this Decree from engaging in the activities listed under
subsections (3) to (11) of this section, except as may otherwise be governed by special laws.

ANNEXES
Annex 1
Annex 2
Annex 3
Annex 4


Virata v. NG Wee (2017 Decision + 2018 Resolution)

Uploaded by

Copyright:

Available Formats

Virata v. NG Wee (2017 Decision + 2018 Resolution)

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Virata v. NG Wee (2017 Decision + 2018 Resolution)

Uploaded by

Copyright:

Available Formats

LUIS JUAN L. VIRATA & UEM-MARA PHILIPPINES CORPORATION V. ALEJANDRO NG WEE, ET AL.

(2017 DECISION & 2018 RESOLUTION)

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

SUMMARY OF PETITIONS BY THE PETITIONERS

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

2017 SC DECISION (ON LIABILITY OF DIRECTORS AND OFFICERS ONLY)

ISSUE HELD & RATIO

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

Whether Estella is liable for the obligations of Wincorp.

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

ISSUE HELD & RATIO

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

[Procedural] The Court has jurisdiction over the person of Santos-Tan,

[Procedural] Santos-Tan was not denied due process,

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

2017 DECISION, OTHER ISSUES

[Procedural] Ng Wee is the real party in interest.

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

Power Merge is liable to Ng Wee under its Promissory Notes 10

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

The indemnity comprises:

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

Whether Virata is liable for the obligations of Power Merge.

Whether UEM-MARA cannot be held liable.

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

No further pleadings or motions will be entertained. Let entry of judgment be issued.

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

B2023 DELA CRUZ – CORPORATION LAW – PROF. VIRAY

You might also like