(49) SY CHIM and FELICIDAD CHAN SY v SY SIY HO & SONS, INC.

doing business Aug 8, 2003: The RTC granted the motion and appointed the accounting firm of
under the name and style GUAN YIAC HARDWARE January 27, 2006 Punongbayan & Araullo to conduct the audit of the corporations books and
Summary: records covering the period from 1993 to the present.
Sometime in 2003, an intra-corporate dispute ensued between Sy Chim and his
wife, on the one hand, and their son Sy Tiong Shiou, on the other. Aug 26, 2003, Sps Sy Chim and Felicidad Chan Sy filed a Motion for the
Appointment of a Management Committee.
Mar 24, 2003, a special meeting of the BoD was held with the Sps Sy Tiong Shiou
and Juanita Tan Sy and their sons Charlie, Romer and Jesse James Tan in Sept 12, 2003, the RTC issued an Order granting the motion for the creation of a
attendance. In two separate resolutions, Juanita Tan Sy was removed as management committee pendente lite.
corporate treasurer and relieved of all responsibilities; the Sps Sy Chim were
held accountable for the undeposited money. Oct 15, 2003, the trial court issued a Supplemental Order directing the president,
vice president, secretary, treasurer, accountant, bookkeeper of the corporation
Sy Siy Ho & Sons, Inc, subsequently, filed a complaint for accounting and or any person acting on their behalf or under their instruction to allow the
damages against the Sps Sy Chim in the RTC Manila. parties or their duly-authorized representatives to be present during the audit.
- Felicidad Chan Sy, as custodian of all cash collections, had been depositing
amounts less than those appearing in the financial statements which are in the Corp filed a MR of the Supplemental Order.
her custody and that no deposits were made in the corporations account from
Nov 1, 2002 to Jan 31, 2003. Based on the accountants report, Felicidad Chan Sy Dec 19, 2003: RTC denied Corp's MR of the Supplemental Order. The trial court
failed to account for P67,117,230.30. also designated Wencita C. Salvador as comptroller.
Corp filed a MR of the trial court's Order.
Sps Sy Chim's Answer:
- any unaccounted cash account and irregularities in the management of the On the other hand, Sps Sy Tiong Shiou and Juanita Tan Sy filed a petition for
corporation, if any, were the full responsibility of Sy Tiong Shiou, Romer Tan's certiorari in the CA assailing the Orders of the RTC.
own father, since he has direct and actual management of the corporation under
the by-laws. Jan 27, 2004, the RTC declared that its Dec 19, 2003 Order designating Wencita
- Sy Chim, as corporate president, was a mere figurehead, who only had general Salvador as comptroller was immediately executory.
supervision over the corporations officers. Juanita Tan Sy, as corporate
treasurer, had custody of the corporation's funds and should have kept a The Corp filed an Urgent Motion to lift the Jan 27, 2004 Order of the RTC, but
complete and accurate record of receipts, disbursements, and other commercial before the RTC could resolve the motion, the Corp filed a petition for certiorari
transactions of the corporation. Felicidad Chan Sy merely performed clerical with injunctive relief in the CA.
work and acted as Corporate Treasurer only in the absence of Juanita Tan Sy and
under the latter's close supervision. CA granted the petition, nullified the Dec 19 2003 and Jan 27 2004 orders issued
by the RTC, and remanded to the RTC Manila for further proceedings.
Aug 5, 2003, Sps Sy Chim and Felicidad Chan Sy filed a Motion for the
Appointment of an Independent Auditor, to conduct an audit of the funds and Sps Sy Chim and Felicidad Chan Sy filed a motion for the partial reconsideration
assets of the plaintiff corporation. of the decision, which the CA denied.
Sps Sy Chim and Felicidad Chan Sy then filed a petition for review on certiorari. Thus, on March 24, 2003, a special meeting of the BoD was held with the Sps Sy
Tiong Shiou and Juanita Tan Sy and their sons Charlie, Romer and Jesse James
SC affirmed the CA ruling that RTC committed GAD amounting to excess or lack Tan in attendance. In two separate resolutions, Juanita Tan Sy was removed as
of jurisdiction in (a) creating a management committee; and (c) appointing a corporate treasurer and relieved of all responsibilities; the Sps Sy Chim were
comptroller; but not in (b) designating an independent auditor and ordering an held accountable for the undeposited money; and a new external auditor was
audit of the corporate books and records of the corporation. hired to make a complete audit of all books and records. Banaria Banaria and
- S1, R9 of the Interim Rules and affirmed in [Jacinto v. First Women's Credit Company then submitted Financial Reports covering 2001 and 2002.
Corporation]: that the two requisites, namely: (1) Dissipation, loss, wastage or
destruction of assets or other properties; and (2) Paralyzation of its business operations In a Letter dated April 15, 2003, Sy Tiong Shiou informed his parents of the
which may be prejudicial to the interest of the minority stockholders, parties-litigants or corporations cash balance shortage as of Mar 31, 2003 (as reflected in the
the general public. should be present and proved before a management committee auditors report) and that there was also an undeposited amount of P2M for the
may be created and a receiver appointed by the RTC. current salary and emergency funds, and they had several postdated checks in
- nowhere in the said rules does it authorize the designation of a comptroller. their possession. Sy Tiong Shiou requested that the shortage be accounted for,
Likewise, with the Court's ruling that the creation of such committee and the and that the undeposited funds be remitted. He also requested that the
appointment of a receiver is without factual basis, it follows that the postdated checks and original receipts for all disbursements of corporate funds
appointment of a comptroller is, likewise, unnecessary. be turned over to Corporate Treasurer Juanita Tan Sy. The Sps Sy Chim did not
- However, RTC acted in the exercise of its discretion in appointing an respond.
independent auditor. Such appointment is appropriate and even necessary if
only to limit the issues for trial and thus abbreviate the proceedings. Sy Tiong Shiou was later elected President of the corporation.
------------------------------------------------------------------------- Sy Siy Ho & Sons, Inc, subsequently, filed a complaint for accounting and
CALLEJO, SR., J. damages against the Sps Sy Chim in the RTC Manila.
FACTS - Felicidad Chan Sy, as custodian of all cash collections, had been depositing
The Sy Siy Ho & Sons, Inc. was owned and controlled by Sy Chim and his amounts less than those appearing in the financial statements which are in the
children. her custody and that no deposits were made in the corporations account from
Sometime in 2003, an intra-corporate dispute ensued between Sy Chim and his Nov 1, 2002 to Jan 31, 2003. Based on the accountants report, Felicidad Chan Sy
wife, on the one hand, and their son Sy Tiong Shiou, on the other. In a letter failed to account for P67,117,230.30.
addressed to the corporation dated Feb 3, 2003, Corporate Treasurer Juanita Tan
Sy (wife of Sy Tiong Shiou) requested that she immediately be removed from all Sps Sy Chim's Answer:
responsibilities and obligations pertaining to all corporate funds of the - any unaccounted cash account and irregularities in the management of the
corporation, considering that Felicidad Chan Sy (wife of Sy Chim) was the one corporation, if any, were the full responsibility of Sy Tiong Shiou, Romer Tan's
who handled and managed all deposits and funds while Sy Chim supervised all own father, since he has direct and actual management of the corporation under
expenditures. She further reported that Felicidad Chan Sy did not make any cash the by-laws.
deposit to any bank from Nov 1, 2002 to Jan 31, 2003, and that the total amount - Sy Chim, as corporate president, was a mere figurehead, who only had general
of cash as reflected in the bank statements is far less than that reported in the supervision over the corporations officers. Juanita Tan Sy, as corporate
corporation's financial statements and other records. She then proposed that treasurer, had custody of the corporation's funds and should have kept a
the Board call a special meeting to discuss these matters. complete and accurate record of receipts, disbursements, and other commercial
transactions of the corporation. Felicidad Chan Sy merely performed clerical
work and acted as Corporate Treasurer only in the absence of Juanita Tan Sy and failed to allege and establish the two requisites for the creation of a
under the latter's close supervision. management committee under S1, R9 of the Interim Rules of Procedure for
Intra-Corporate Controversies (Interim Rules for brevity) under RA8799. It
Aug 5, 2003, Sps Sy Chim and Felicidad Chan Sy filed a Motion for the averred that, compared to previous years under the management of Sy Tiong
Appointment of an Independent Auditor, to conduct an audit of the funds and Shiou, the volume of sales and importation of the corporation had considerably
assets of the plaintiff corporation. increased, and that its obligation of P29,404,664.00 to Metrobank was paid.

Aug 8, 2003: The RTC granted the motion and appointed the accounting firm of Sept 9, 2003, Sps Sy Chim and Felicidad Chan Sy filed a Motion for Leave to File
Punongbayan & Araullo to conduct the audit of the corporations books and and Third-Party Complaint against Sy Tiong Shiou and Juanita Tan Sy.
records covering the period from 1993 to the present.
Sept 12, 2003, the RTC issued an Order granting the motion for the creation of a
Corp moved that the court set aside its Order appointing an independent management committee pendente lite.
auditor. - while the main case is yet to be heard, the fact remains that corporate assets,
funds, properties and records were in imminent danger of further dissipation or
Aug 26, 2003, Sps Sy Chim and Felicidad Chan Sy filed a Motion for the total loss. Thus, it would serve the best interest of the company, as well as its
Appointment of a Management Committee. stockholders and creditors, to have the corporation managed by an independent
- the funds of the corporation are under the supervision, control and committee exclusively accountable to the court.
administration of Sy Tiong Shiou, as the General Manager, and Sy Tiong Shiou's - the corporation's assets, income and properties would be protected and
wife, Juanita Tan, as Treasurer; and that the direction and control of the preserved until the final determination of the main controversy.
business and operations of Guan Yiac Hardware were in the hands of the General
Manager Sy Tiong Shiou, who had the power to direct and actively manage Guan Oct 8, 2003, the RTC granted Sps Sy Chim and Felicidad Chan Sy's Motion to File
Yiac Hardware. a Third-Party Complaint and ordered that such complaint be admitted.
- The plaintiff itself has alleged that there has been a massive dissipation and
loss of its corporate assets and funds, and this Court is still in the process of Corp filed a MR of the Order of the trial court creating a management
determining whether the General Manager, Sy Tiong Shiou, and Treasurer, committee.
Juanita Tan, are the parties responsible for such dissipation and loss. In view of - Sps Sy Chim and Felicidad Chan Sy failed to adduce evidence to prove the twin
the foregoing, until this Honorable Court resolves with finality that Sy Tiong requisites for the creation of a management committee under S1, R9 of the
Shiou and his wife, Juanita Tan, are not responsible for the dissipation and loss, Interim Rules.
the control and management of the Corporation must be transferred to an
independent party to ensure the preservation of the corporate assets. Oct 15, 2003, the trial court issued a Supplemental Order directing the president,
- While Sy Tiong Shiou and Juanita Tan remain in control of the management of vice president, secretary, treasurer, accountant, bookkeeper of the corporation
the corporation, there is imminent danger of further dissipation, loss, wastage or any person acting on their behalf or under their instruction to allow the
or destruction of the corporate funds and assets. parties or their duly-authorized representatives to be present during the audit.
- The control and management of the corporation must be transferred pendente
lite to an independent party to ensure the preservation of the corporate assets. However, Punongbayan & Araullo withdrew as independent auditor.

Corp opposed the motion, contending that Sps Sy Chim and Felicidad Chan Sy Plaintiff filed a MR of the Supplemental Order.
 parties, not exclusively for the benefit of the party at whose instance it is to be
Dec 19, 2003: RTC denied plaintiffs' MR of the Supplemental Order. The trial created. A simple turn over of pertinent receipts would facilitate the accounting
court designated Wencita C. Salvador as comptroller tasked to oversee the sought for, without resorting to the creation of a management committee; the
maintenance of corporate books of accounts, budget administration, internal accuracy of the validity of the accounting report made as basis of the complaint
control on disbursements, reporting and interpretation of financial statements, for accounting and damages should then be validated during trial on the merits.
tax administration, protection of assets, financial evaluation and government - RTC abused its discretion amounting to excess of jurisdiction in ordering the
reporting. creation of a management committee pendente lite, in designating a
comptroller and an accounting firm to assess the corporations financial books
Corp filed a MR of the trial court's Dec 19 2003 Order. and records.
- the appointment of a comptroller was not authorized by the Interim Rules.
On the other hand, Sps Sy Tiong Shiou and Juanita Tan Sy filed a petition for - the order imposing a limitation of P500k disbursement without prior court
certiorari in the CA assailing the Oct 8, 2003 and also the Orders of the RTC. approval was likewise unnecessary and has no direct bearing to the issue
involved in the case pending before the court a quo.
Jan 27, 2004, the RTC declared that its Dec 19, 2003 Order designating Wencita
Salvador as comptroller was immediately executory. She was, likewise, directed Spouses Sy Chim and Felicidad Chan Sy filed a motion for the partial
to immediately assume her functions and ordered all the corporation officers to reconsideration of the decision, which the CA denied.
immediately turn over all corporate books and records as may be required by
her, and to cooperate fully. The court designated the accounting firm of R.S. Sps Sy Chim and Felicidad Chan Sy then filed the instant petition for review on
Bernaldo & Associates to conduct the audit. The court also directed the parties certiorari.
to provide the firm with all the financial books of the corporation. -------------------------------------------
Sps Sy Chim and Felicidad Chan Sy Position:
The corporation filed an Urgent Motion to lift the Jan 27, 2004 Order of the RTC, - CA erred in strictly applying the requisites under S1, R9 of the Interim Rules
but before the RTC could resolve the motion, the corporation filed a petition for regarding the creation of a management committee. The word and in S1, R9
certiorari with injunctive relief in the CA. should be interpreted as or, since a literal interpretation of the provision would
frustrate the plain intention of the Rule. CA's strict interpretation of the rule is
June 29, 2005, the CA rendered judgment granting the petition and nullifying the contrary to the spirit of PD902-A.
Dec 19 2003 and Jan 27 2004 orders issued by the RTC, and remanding to the RTC - RTC is empowered to act and put a stop to misappropriation of a corporation's
Manila for further proceedings. funds and thus prevent business operations from being paralyzed. For the Court
- Sps Sy Chim and Felicidad Chan Sy failed to prove a requirement for the to idly wait and watch as assets of the corporation are plundered until the
creation of a management committee under S1, R9 of the Interim Rules: that business is paralyzed, would render inutile S1, R9 of the Interim Rules.
there was imminent danger of massive dissipation, loss, wastage or destruction - at the time the complaint was filed in the trial court, Rs abused their positions
of assets and other properties of the corporation. and mismanaged corporate affairs, thus necessitating the immediate creation of
- other than the bare allegations of Sy Chim and Felicidad Chan Sy that they a management committee.
could not protect their interests because of dissention among themselves on the - the corporate funds have massively dissipated and would continue as long as
one hand, and members of the BoDs on the other, they failed to show that the the management and control of the corporation remained with Rs. In fact, Rs
business operations of the corporation were paralyzed. admitted in their complaint that there had been massive dissipation of the funds
- the creation of a management committee is for the benefit of all the interested and assets of the corporation since 1993 when Rs were still corporate officers.
Contrary to the ruling of the CA, the creation of the management committee management committee. The Order of the trial court dated August 8, 2003 had
would ensure the continuity of the corporations business operations and already been overtaken and rendered moot by the January 27, 2004 Order of the
remove the management of the business from the hands of those responsible for RTC which the CA affirmed.
the dissipation of its assets. Thus, the interest of the corporation and its - Also, whether or not there is a need for the appointment of comptroller and
stockholders would be preserved and protected through the creation of a the limits of her power are questions of fact which should not be raised in this
management committee. Court.
- the appointment of an independent auditing firm would satisfy the -----------------------------------------------
corporation's claim for a full accounting and ensure that all books, records and WON the RTC committed GAD amounting to excess or lack of jurisdiction in
documents of the corporation would be submitted to the auditor to ensure a (a) creating a management committee; (b) designating an independent
fair, impartial and full accounting. Such accounting would determine the full auditor and ordering an audit of the corporate books and records of the
extent of misappropriation of corporate funds, as well as the shareholdings of its corporation; and (c) appointing a comptroller.
stockholders. Held: Yes a and c but not b.
- there was a necessity for the court to do so in order to determine the true (a) S1, R9 of the Interim Rules provides:
status of corporate funds, and to determine who should be held responsible for SECTION 1. Creation of a management committee. As an incident to any of the cases filed
the alleged misappropriation. The auditor's report is of doubtful credibility as it under these Rules or the Interim Rules on Corporate Rehabilitation, a party may apply
is inconsistent with the external auditors report (which has no indication of any for the appointment of a management committee for the corporation, partnership or
missing fund). Moreover, the appointment of an external auditor is necessitated association, when there is imminent danger of:
by time constraints and the volume of financial records to be examined. (1) Dissipation, loss, wastage or destruction of assets or other properties; and
- R corporation's failure to question the trial court's appointment of an (2) Paralyzation of its business operations which may be prejudicial to the interest of the
independent auditor and accounting firm through a MR effectively estopped minority stockholders, parties-litigants or the general public.
them from assailing such orders; instead of filing a petition for certiorari in the
CA, R should have moved that such orders be reconsidered. The word “and” in S1, R9 of the Interim Rules cannot be interpreted to mean or.
- On the issue of whether or not the trial court may designate a comptroller, While it is true that in S6(d) of PD902-A, an applicant for the appointment of a
although S1, R9 of the Interim Rules does not specifically authorize the RTC to management committee is mandated to prove only one of the two requisites
appoint a comptroller, the same rule authorizes such court to appoint a provided therein, the Court, in [Jacinto v. First Women's Credit Corporation],
receiver; this latter power necessarily implies the authority to designate a ruled that the two requisites should be present before a management committee
comptroller. A comptroller would exercise more limited functions and ensure may be created and a receiver appointed by the RTC.
that no illegitimate corporate expenditures would be made and that all
government requirements will be complied with before the formation of a A reading of the aforecited legal provision reveals that for a minority
management committee. stockholder to obtain the appointment of an interim management committee,
he must do more than merely make a prima facie showing of a denial of his right
Sy Siy Ho & Sons, Inc. Position: to share in the concerns of the corporation; he must show that the corporate
-the issues raised by Ps are factual, which is proscribed by R45 of the Rules of property is in danger of being wasted and destroyed; that the business of the
Civil Procedure; whether or not there is factual basis for the creation of a corporation is being diverted from the purpose for which it has been organized;
management committee under S1, R9 of the Interim Rules is a question of fact. and that there is serious paralyzation of operations all to his detriment.
- The CA correctly ruled that Ps failed to allege and substantiate the need for the
appointment of an auditing firm, as well as the requisites for the creation of a The rationale for the need to establish the confluence of the 2 requisites under
S1, R9 by an applicant for the appointment of a management committee is show that there has been no slack in the business operations of respondent
primarily based upon the fact that such committee and receiver appointed by corporation.
the court will immediately take over the management of the corporation,
partnership or association, including such power as it may deem appropriate, Sps Sy Chim and Felicidad Chan Sy were divested of their corporate positions,
and any of the powers specified in S5 of the Rule. and thus stockholdings in the corporation were reduced. Sps Sy Chim and
Felicidad Chan Sy claim that Sy Tiong Shiou and Juanita Tan Sy and their
Indeed, upon the appointment of a receiver, the duly elected/appointed officers children unlawfully ousted them from their positions and reduced their
of the corporation are divested of the management of such corporation in favor shareholdings in the corporation. They posit that the formers' claim that they
of the management committee/receiver. Such transference of the corporation's (Ps) misappropriated the funds and assets of R was designed to justify the
management will certainly have a negative, if not crippling effect, on the unlawful ouster of Ps from the management of R corporation. Such claims,
operations/affairs of the corporation not only with banks and other business however, have yet to be proven.
institutions including those abroad which it deals business with. A wall of
uncertainty is erected; the short and long-term plans of the management of the While the allegation that Sy Tiong Shiou and Juanita Tan Sy abused their
corporation are disrupted, if not derailed. positions and mismanaged the affairs of respondent corporation is a distinct
possibility, petitioners failed to adduce proof thereon. Mere possibility without
Thus, the creation and appointment of a management committee and a receiver proof of abusing corporate positions and dissipation of assets and properties of
is an extraordinary and drastic remedy to be exercised with care and caution; the corporation is not a valid ground for the appointment of a management
and only when the requirements under the Interim Rules are shown. committee/receiver. Ps even failed to adduce evidence to controvert the
following allegations of respondent:
Neither PD902-A and RA8799 nor the Interim Rules of Procedure define - A comparative breakdown of the volume of sales and importation of the
imminent danger. Danger is a general term, including peril, jeopardy, hazard plaintiff for the years 2002 and 2003, during the watch of defendant Sy Chim as
and risk; as used in the Rule, it refers to exposure or liability to injury. Imminent President and during the time that Sy Tiong Shiou took over as President would
refers to something which is threatening to happen at once, something close at clearly show that it has tremendously increased.
hand, something to happen upon the instant, close although not yet happening, - In a certification dated August 29, 2003 issued by Amelin S. Yap, SVP, Center
and on the verge of happening. Head of Metrobank, it is demonstrated that plaintiff, through the able and
competent management and leadership of Sy Tiong Shiou, has been able to
In the present case, Sps Sy Chim and Felicidad Chan Sy failed to make a strong service and pay its financial obligations when it paid P14,911,664 under trust
showing that there was an imminent danger of dissipation, loss, wastage or receipt obligation from the period of April 2003 up to August 2003. Likewise, it
destruction of assets or other properties of respondent corporation and has also paid P14,493,000 under loan obligation from the period April 2003 to
paralysis of its business operations which may be prejudicial to the interest of August 2003. Further, the bank certified that plaintiffs obligations are in current
the parties-litigants, petitioners, or the general public. The RTC thus committed status.
GAD amounting to excess of jurisdiction in creating a management committee - On Sept 1, 2003, CHINABANK, through its Senior Assistant Vice President,
and the subsequent appointment of a comptroller. International Banking Group, Elaine Marissa L. Ong issued a certification that, as
per records as of Au 28, 2003, plaintiff's outstanding trust receipts amounted
Reviewing the records, contrary to the findings of the RTC, there is no imminent only to P9,462,835.90 and that these trust receipts are not beyond 180 days.
danger of dissipation or total loss of the assets, funds, properties and records of - In contrast, during defendant Sy Chim's incumbency as President, the plaintiff
respondent corporation, or paralysis of business operations. In fact, records could hardly pay its financial obligations with its creditor banks. In fact, it has to
ask and request for extensions. Company, the corporation had retained earnings of P56,170,114.89 for the period
ending Dec 31, 2001, whereas per report of Uy, the Corp had net earnings of only
(c) RTC committed GAD in excess of its jurisdiction in appointing a comptroller P16,252,114.89, hence, the need for an independent auditor. Moreover, such
and ordering her to immediately assume office before the creation of a audit would forestall any misappropriation of corporate funds and assets of R
management committee. corporation in the interim.

As defined in Black's Law Dictionary, a comptroller is an officer of a business,
charged with certain duties in relation to the fiscal affairs of the same,
principally to examine and audit the accounts, to keep records, and report the
financial situation from time to time. We have perused the Interim Rules of
Procedure for Intra-Corporate Controversies and nowhere in the said rules does
it authorize the designation of a comptroller. R9, S2 of the Procedure, simply,
mandates that, in the event the court finds the application for the creation of a
management committee sufficient in form and substance, the court shall issue
an order appointing a receiver of known probity, integrity and competence and
without any conflict of interest as therein defined to immediately take over the
corporation, partnership or association, specifying such powers as it may deem
appropriate under the circumstances, including any of the powers specified in
S5 of said Rule.
We note that Sps Sy Chim and Felicidad Chan Sy Position: prayed for the
appointment of an independent auditor, and that R did not even object to the
motion. Consequently, the RTC appointed the Punongbayan & Araullo firm to
conduct the audit. However, R made a volte face and filed its Manifestation and
Motion dated Nov 26, 2003 and posited that an independent auditor was not
necessary since in its complaint, it merely prayed for an accounting of the funds
which were missing based on the report of the Banaria Banaria & Company
auditing firm.
We hold that an independent audit is imperative in this case so that, based on
such report, the RTC would be able to determine the veracity not only of R's
claim that Ps misappropriated corporate funds and assets, but also that of Ps
who claim otherwise.

SC noted: We do not foreclose the power of a management committee to appoint IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The
a comptroller under S5, R9 of the Interim Rules. However, with the Court's Decision of the CA is AFFIRMED WITH THE MODIFICATION that the Orders of
ruling that the creation of such committee and the appointment of a receiver is RTC dated Aug 8, 2003, Oct 15, 2003 and Jan 27, 2004, relative to the appointment
without factual basis, it follows that the appointment of a comptroller is, of R.S. Bernabe and Associates as independent auditor, are AFFIRMED.
likewise, unnecessary.

(b) However, RTC acted in the exercise of its discretion in appointing an

independent auditor. Such appointment is appropriate and even necessary if
only to limit the issues for trial and thus abbreviate the proceedings. The ouster
of Sps Sy Chim and Felicidad Chan Sy as president and treasurer of R Corp and
the takeover by third-party defendants and their children of the management
and control of the corporation is based on the claim of Juanita Tan Sy that
Felicidad Chan Sy had a shortage of P67,117,230.30 for 2001 and 2002 per the
report of the auditing firm, Banaria Banaria & Company. Ps, for their part, claim
that such report is inconsistent with that of Corp's external auditor Anita Uy
from 1994 to 2002 which were submitted to the BIR and the SEC showing that no
amount was due to stockholders. In the report of the Banaria Banaria &