I.

Residual Jurisdiction

The "residual jurisdiction" of trial courts is available at a stage in which the court is
normally deemed to have lost jurisdiction over the case or the subject matter involved in the
appeal.1 This stage is reached upon the perfection of the appeals by the parties or upon the
approval of the records on appeal, but prior to the transmittal of the original records or the
records on appeal.2 In either instance, the trial court still retains its so-called residual jurisdiction
to issue protective orders, approve compromises, permit appeals of indigent litigants, order
execution pending appeal, and allow the withdrawal of the appeal.3

Rule 42 of the Rules of Court governs the appeal of a decision of the RTC rendered in the
exercise of its appellate jurisdiction; the appeal is made by filing a petition for review with the
CA.4 Despite the filing of a petition with the CA, however, Rule 42 grants the RTC residual
jurisdiction to order execution pending appeal, so long as (1) the CA has not yet given due
course to the petition, and (2) the requirements of Section 2, Rule 39 are observed. The relevant
portion of Section 8, Rule 42 of the Rules of Court states5:

Section 8. Perfection of appeal; effect thereof (a) x x x

However, before the Court of Appeals gives due course to the petition,
the Regional Trial Court may issue orders for the protection and preservation of
the rights of the parties which do not involve any matter litigated by the appeal,
approve compromises, permit appeals of indigent litigants, order execution
pending appeal in accordance with Section 2 of Rule 39, and allow withdrawal
of the appeal.

Rule 39 of the 1997 Rules states:

Sec. 2. Discretionary execution. —

(a) Execution of a judgment or final order pending appeal. — On motion of the

prevailing party with notice to the adverse party filed in the trial court while it has
jurisdiction over the case and is in possession of either the original record or the
record on appeal, as the case may be, at the time of the filing of such motion, said
court may, in its discretion, order execution of a judgment or final order even
before the expiration of the period to appeal.

After the trial court has lost jurisdiction, the motion for execution pending
appeal may be filed in the appellate court.

1
Katon vs. Palanca Jr., G.R. No. 151149, September 7, 2004.
2
Ibid.
3
Ibid.
4
ALPA-PCM Inc. vs. Bulasao, G.R. No. 197124, March 19, 2012.
5
Ibid.
 Discretionary execution may only issue upon good reasons to be stated
in a special order after due hearing.

Requirements: Manacop v. Equitable Banking Corporation (G.R. No.162814-17, August

25, 2005, 468 SCRA 256.)

 there must be a motion by the prevailing party with notice to the adverse party;
 there must be a good reason for execution pending appeal; and,
 the good reason must be stated in a special order.

Good Reasons; Defined.-

As such exception, the court’s discretion in allowing it must be strictly construed

and firmly grounded on the existence of good reasons.

“Good reasons,” it has been held, consist of compelling circumstances that justify
immediate execution lest the judgment becomes illusory. The circumstances must be
superior, outweighing the injury or damages that might result should the
losing party secure a reversal of the judgment. Lesser reasons would make of execution
pending appeal, instead of an instrument of solicitude and justice, a tool of oppression
and inequity. (Florendo vs. Paramount Corp. G.R. No. 167976, January20, 2010)

EXAMPLES OF GOOD REASONS

1. “Imminent danger of insolvency.” (Archinet International vs Becco Philippines,

Inc., G.R. No. 183753, June 19, 2009)
2. Judgment debtor is actually insolvent (Padilla et.al. vs CA, et.al., L-31569,
Sept.28, 1973)
3. The Prevailing party was a natural person who, at 76 years of age, may no longer
enjoy the fruit of the judgment before he finally passes away. (Borja vs. Court of
Appeals. 274 Phil. 258 [1991])
4. When the appeal is dilatory and the losing party intends to encumber and/or
dispose of the property subject of the case during the pendency of the appeal in
order to defraud or deprive the plaintiff of proprietary rights and defeat the ends
of justice (Home Insurance Company vs. Court of Appeals, 184 SCRA 318 [1990]

However, in BF Corporation v. Edsa Shangri-la Hotel, the Supreme Court held that
an allegation that the appeal is merely dilatory is not a good reason for granting execution
pending appeal.

Note: “Good reason” as required by Section 2, Rule 39 of the Rules of Court does not
necessarily mean unassailable and flawless basis but at the very least, it must be on solid
footing. Dire financial conditions of the plaintiffs supported by mere self-serving
statements as “good reason” for the issuance of a writ of execution pending appeal does
not stand on solid footing. It does not even stand on its own. (National Power
Corporation vs. Judge Adiong, A.M. No. RTJ-07-2060)
 5. That the goods subject matter of the judgment will deteriorate during
the pendency of the appeal; and that a slight deterioration of said goods will be
sufficient to impair their market value as first-hand goods. (Federation of
United Namarco Distributors, Inc. v. National Marketing Corp. G.R. L-17819
March 31,1962)

Interim Rules of Procedure for Intra-corporate Controversies

Sec. 2. Suppletory application of the Rules of Court . - The Rules of Court, in so

far as they may be applicable and are not inconsistent with these Rules, are hereby
adopted to form an integral part of these Rules.

Nonetheless, Section 4, Rule I of the Interim Rules of Procedure for Intra-corporate

Controversies provides that “All decisions and orders issued under these Rules shall immediately
be executory. No appeal or petition taken therefrom shall stay the enforcement or
implementation of the decision or order, unless restrained by an appellate court.”

In ALPA-PCM Inc. vs. Bulasao6, the Court ruled that the Sec. 21 of the Revised Rules on
Summary Procedure providing that the decision of the regional trial court in civil cases governed
by this Rule, including forcible entry and unlawful detainer, shall be immediately executory, is a
rule without any qualification whatsoever and thus it requires no further justification or even
good reasons for the RTC to authorize execution, even if an appeal has already been filed before
the CA.

It is recommended that the same reasoning may be argued in case of intra-corporate

controversies.

II. Attorney’s fees and exemplary damages in execution pending appeal

No jurisprudence found yet as of the moment

6
ALPA-PCM Inc. vs. Bulasao, G.R. No. 197124, March 19, 2012.