G.R. No. 90462 May 29, 1992
RICARDO LIRIO and JOHN DOE (which identified itself as the real Philippine American Investment Corporation), petitioners, vs. HON. COURT OF APPEALS (Fourth Division) and PHILIPPINE AMERICAN INVESTMENT CORPORATION, respondents.

FACTS

On September 30, 1986, Jose Ma. Abello, purporting to be president of respondent Philippine American Investment Corporation (PAIC), filed a complaint for replevin and damages against Ricardo P. Lirio and John Doe (identifying itself as the real PAIC) concerning a Mitsubishi Galant sedan. The trial court granted a writ of replevin, and the car was seized from the petitioners on January 9, 1987. Petitioners claimed that the plaintiff PAIC was an impostor, that the real PAIC had been placed under receivership and later liquidation by the Central Bank, and that petitioner Ricardo Lirio was the appointed receiver/liquidator who had taken possession of its assets, including the car. After neither party appeared at a pre-trial conference, the trial court dismissed the complaint and the petitioners’ counterclaim. Upon petitioners’ motion, the court reinstated the counterclaim but dismissed the complaint, ordered the writ of seizure lifted, and directed the return of the vehicle to the petitioners. The petitioner PAIC’s motion for reconsideration led the court to revert to its original order dismissing both complaint and counterclaim. Petitioners appealed this dismissal of their counterclaim. After perfecting their appeal, petitioners filed a motion in the trial court for the return of the car or disclosure of its whereabouts, alleging that Jose Ma. Abello had left the country and the car could not be located. On May 18, 1989, the trial court issued an order directing respondent PAIC’s counsel to surrender the vehicle or disclose its whereabouts. Respondent PAIC assailed this order via certiorari in the Court of Appeals, which set it aside, holding the trial court was without jurisdiction as the issue was linked to the pending appeal.

ISSUE

Whether the trial court retained jurisdiction to issue the order of May 18, 1989, directing the surrender of the motor vehicle or disclosure of its whereabouts, after the perfection of the petitioners’ appeal to the Court of Appeals.

RULING

Yes. The Supreme Court granted the petition, set aside the decision of the Court of Appeals, and reinstated the trial court’s order of May 18, 1989. The Court held that under Section 9, Rule 41 of the Rules of Court, while the perfection of an appeal generally deprives the trial court of jurisdiction over the case, it retains authority to issue orders for the protection and preservation of the rights of the parties which do not involve any matter litigated by the appeal. The order was issued pursuant to this residual jurisdiction. At the time of the order, the replevin suit had been dismissed (a dismissal not appealed by respondent PAIC), and only the dismissal of petitioners’ counterclaim was on appeal. Consequently, there was no justifiable cause for the vehicle to remain in respondent’s custody, and to deny petitioners the right to its possession would be against fair play. The trial court properly acted to protect and preserve petitioners’ rights by ordering the return of the vehicle or disclosure of its whereabouts.