Shiou v. Chim

SY TIONG SHIOU v. SY CHIM and FELICIDAD CHAN SY, (G)
G.R. No. 174168, March 30, 2009

FACTS:

• February 3 2003, Juanita Tan, corporate treasurer of Sy Siy Ho & Sons, Inc. (the corporation), a family corporation doing business under the name and style Guan Yiac Hardware, submitted a letter to the corporation’s Board of Directors (Board) statingthat Felicidad Chan Sy did not make cash deposits to any of the corporation’s banks from 1 November 2001 to 31 January 2003, thus the total bank remittances for the past years were less than reflected in the corporate financial statements, accounting books and records. Finally, Juanita Tan sought to be free from any responsibility over all corporate funds.
• April 5, 2003, Banaria, Banaria & Company in its report, the accounting firm attributed to the Spouses Sy P67,117,230.30 as unaccounted receipts and disbursements from 1994 to 2002.
• April 15, 2003, a demand letter was subsequently served on the Spouses Sy. On the same date, the children of the Spouses Sy allegedly stole from the corporation cash, postdated checks and other important documents. After the incident, the Spouses Sy allegedly transferred residence and ceased reporting to the corporation. Thereupon, the corporation filed a criminal complaint for robbery against the Spouses Sy before the City Prosecutor’s Office of Manila.
• July 1, 2003, the corporation, through Romer S. Tan, filed its Amended Complaint for Accounting and Damages against the Spouses Sy before the RTC Manila, praying for a complete and true accounting of all the amounts paid to, received and earned by the company since 1993 and for the restitution of the said amount.The complaint also prayed for a temporary restraining order (TRO) and or preliminary injunction to restrain Sy Chim from calling a stockholders’ meeting on the ground of lack of authority.
• September 9, 2003, the Spouses Sy filed their Motion for Leave to File Third-Party Complaint, praying that their attached Third Party Complaint be allowed and admitted against Sy Tiong Shiou and his spouse. In the said third-party complaint, the Spouses Sy accused Sy Tiong Shiou and Juanita Tan as directly liable for the corporation’s claim for misappropriating corporate funds.
• October 8, 2003, the trial court granted the motion for leave to file the third-party complaint, and forthwith directed the issuance of summons against Sy Tiong Shiou and Juanita Tan.
• January 16, 2004, their counsel allegedly discovered that Sy Tiong Shiou and Juanita Tan were not furnished with the copies of several pleadings, as well as a court order, which resulted in their having been declared in default for failure to file their answer to the third-party complaint; thus, they instead filed a petition for certiorari before the Court of Appeals.
• May 26, 2004, the Court of Appeals granted the petition of Sy Tiong Shiou and Juanita Tan.61The appellate court declared that a third-party complaint is not allowed under the Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799 (Interim Rules).

ISSUE:

• Whether or not a third-party complaint is prohibited by the Interim Rules. 

HELD:

• No, the third-party complaint should be allowed. For while a third-party complaint is not included in the allowed pleadings, neither is it among the prohibited ones. Nevertheless, this conflict may be resolved by following the well-entrenched rule in statutory construction, that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment. Statutes, including rules, should be construed in the light of the object to be achieved and the evil or mischief to be suppressed and they should be given such construction as will advance the object, suppress the mischief and secure the benefits intended. A statute should therefore be read with reference to its leading idea, and its general purpose and intention should be gathered from the whole act, and this predominant purpose will prevail over the literal import of particular terms or clauses, if plainly apparent, operating as a limitation upon some and as a reason for expanding the signification of others, so that the interpretation may accord with the spirit of the entire act, and so that the policy and object of the statute as a whole may be made effectual and operative to the widest possible extent. Otherwise stated, the spirit, rather than the letter of a law determines its construction; hence, a statute, as in the rules in this case, must be read according to its spirit and intent