LEODEGARIO PAYO, PETITIONER, VS. HON. COURT OF APPEALS AND THE PEOPLE OF THE PHILIPPINES, RESPONDENTS.

Petitioner seeks the review by certiorari of the decision of
the now defunct Court of Appeals which affirmed his conviction by the
likewise defunct Court of First Instance of Davao, Branch I of the crime
of estafa on an information which charged that petitioner “having
received in trust One (1) unit Blackstone, heavy duty diesel engine for
repair and overhauling from Generoso Acero valued at P10,000.00, under
the express obligation of repairing the same and turning it over to the
owner upon payment of the proper fees for repair, but instead of
complying with the said aforesaid obligation, said accused inspite of
repeated demands, with grave abuse of discretion, willfully, unlawfully
and feloniously failed and still fails to return the said engine, having
sold the same to one Romana Rubia and misappropriated and converted the
proceeds thereof to his personal use and benefit, to the damage and
prejudice of Generoso Acero in the aforesaid amount of P10,000.00.”

The charges were denied by petitioner and as a defense, he alleged that
the engine in question was bartered to him by complainant Generoso Acero
when, after he made an estimate that the cost of the repair would
amount to P3,000.00, complainant agreed to his proposal that the engine
be exchanged with his corn degerminator and several equipments, plus the
amount of P1,000.00.

After trial, judgment was rendered by the trial court convicting
petitioner of the offense charged and he was sentenced to four (4)
months of arresto mayor, as minimum to two (2) years and four (4) months
of prision correccional as maximum with the accessories of the law, to
pay the amount of P4,000.00 representing the value of the engine and to
pay the costs.

From this sentence, petitioner appealed to the Court of Appeals. During
the pendency of the appeal, petitioner filed a motion for new trial on
the ground of newly discovered evidence. The motion was supported by an
affidavit executed by complainant Acero admitting that his transaction
with petitioner was really one of barter.

The appellate court denied the motion for new trial declaring that the
alleged newly discovered evidence was only for “impeachment” purposes,
“since complainant had declared in the trial (and) subjected to
cross-examination.” Subsequently, the appellate court rendered its
decision affirming petitioner’s conviction, as well as its resolution
denying reconsideration. Hence, this petition for review, wherein
petitioner prays that the appealed decision be set aside and that he be
acquitted or at least that the case be remanded to the court a quo for
new trial.

In the trial court, complainant Acero testified that he brought the
engine to petitioner’s shop for repair but after it was repaired,
petitioner instead of returning it to him, sold the same to another and
converted the proceeds thereof to his own and personal use. On the
basis of this testimony, petitioner was convicted.

However, in his sworn statement submitted to the Court of Appeals,
executed “for the purpose of informing the authorities concerned of the
nature of the transaction,” with petitioner subject of his criminal
complaint he stated “That subsequently, Mr. Leodegario Payo proposed to
me that he would instead barter or exchange my blackstone engine with a
corn degerminator, one corn rolling mill, plus one elevator, plus the
sum of P1,000.00; That with this proposal, I received the corn
degerminator for testing purpose as I myself then was operating a corn
mill and was in fact acceptable to the proposed exchange; that in the
meantime the other objects for the exchange were not yet delivered to
me; That before the other items for exchange were delivered to me, I
learned that Mr. Payo had already sold the Blackstone Engine, and since
he already sold the same without yet delivering the other items for
exchange, we came into disagreement, and thus the case against him was
filed and altogether the other items of our exchange was not delivered
to me, and further I was not anymore agreeable to continue with the
agreed barter.” Since complainant himself is the only interested party
in the case and there is no other evidence except his testimony to
sustain the judgment of conviction, it becomes necessary to de­termine
the truthfulness of his sworn statement that he had in fact agreed to a
barter transaction with petitioner but later came into some disagreement
with petitioner about it. For if his sworn statement be true, there
would be no evidence whatever to prove the guilt of the accused beyond
reasonable doubt.

The case at bar thus falls squarely under the principle enunciated in
People vs. Lao Wan Sing (46 SCRA 298) that “although a recanting
testimony is oftentimes regarded as unreliable, especially so where the
recantation relied upon involves a confession of perjury, and motions
for new trial based on subsequent retraction by a witness are not
favorably considered, yet when aside from the testimonies of the
retracting witnesses there is no evidence to support the judgment of
conviction, a new trial may be granted (People vs. Bocar, 97 Phil. 398).
We must consider, furthermore, that in a criminal case the State is
‘not less interested than the individual accused of a crime in his
acquittal if he is innocent.’ (U.S. v. Raymundo, 14 Phil. 416, 419).”

Here, complainant’s sworn statement was not as much a “recanting
testimony,” but a clarification and admission, that he did have an
agreement to barter or exchange his blackstone engine with petitioner’s
corn degerminator and related items. There is no “confession of
perjury” here, but a placing of their transaction in a clearer light,
borne out at the trial, that indeed as per complainant’s own testimony
then, petitioner’s corn degerminator had been delivered to and received
by him from petitioner. And indeed the evidence further shows
complainant’s counsel in a letter of demand, Exhibit A, to petitioner
dated July 7, 1969, before the institution of any case, had written
petitioner “That when confronted by my client you denied everything and
instead inform my client with all apparent honesty that it [Blackstone engine] is now owned by you since it has been bartered with a degerminator, blower and others by Mr. Acero“.
(Emphasis and note in brackets supplied.) Complainant’s sworn
statement would thus bear out petitioner’s consistent contention from
the beginning that their transaction had become a purely civil one.

Such sworn statement of complainant in the language of Lao Wan Sing, supra,
“constitutes an evidence that was dis­covered by the appellant after
the lower court had tried and decided the case, and while this case was
pending appeal. The statements made by the [complainant] after the
trial in the Court below was evidence which the appellant could not have
secured during the trial, such that, they can be considered as a newly
discovered evidence that may be properly be presented in a new trial.
More so, because those statements appear to be a material evidence that
may change the judgment, that had been rendered.” Granted, then that
complainant’s sworn statement constituted impeachment evidence, as held
by the appellate court, it nevertheless partook of the nature of
material newly discovered evidence that should properly be presented in a
new trial. The Court in said case went on to cite the precedent of
U.S. vs. Dacir, 26 Phil. 204, that “x x x The practice of this Court has
been to grant new trials in such cases only in very exceptional
instances, as for example, in cases wherein it is made to appear that
there was no evidence sustaining the judgment of conviction other than
the testimony of a witness who is shown to have made contradictory
statements as to material facts, and where it appears further that under
all the circumstances of the case proof that the witness had varied or
modified his testimony out of court and after the trial would lead the
trial judge to a different conclusion.”

Indeed the Solicitor General cites the jurisprudential test for granting
a new trial on the ground of newly discovered evidence, as follows:

“Settled is the rule that before a new trial may be granted on the ground of newly discovered evidence, it must be shown:

(a) that the evidence was discovered after trial;

(b) that the evidence could not have been discovered and
produced at the trial even with the exercise of reasonable diligence;
and

(c) that it is material, not merely cumulative, corroborative or impeaching and of such a weight that it would probably change a judgment if admitted.
Evidence which merely seeks to impeach the evidence upon which the
conviction was based, or retractions of witnesses, will not constitute
grounds for new trial, unless it is shown that there is no evidence
sustaining the judgment of conviction except the testimony of the
retracting witness. The reason for this rule is that, if new trial
will be granted at every instance where any interested party succeeds
in inducing some of the witnesses to vary their testimony outside of
court after trial, there will be no end to litigation. (People vs.
Reyes, 71 Phil. 598; People vs. Ventura – L-16946 July 31, 1962 5 SCRA
741.)” (Solicitor General’s brief, pp. 9-10 Emphasis supplied.)

Indeed, the case at bar clearly appears to fall within the recognized
exception that the evidence in the form of complainant’s “recanting” or
“clarificatory” statement after the trial and on appeal that “he was in
fact acceptable (sic) to the proposed exchange” although later because
of some disagreement he “was not anymore agreeable to continue with the
agreed barter” was material and vital evidence which could not be
produced at the trial. For it was testimonial evidence on the part of
complainant which could not be elicited from him at the trial and to
which he alone held the key, answerable only to his own conscience. It
is in the compelling interest of justice that such statement of
complainant be allowed to be submitted in a new trial, which if
admitted, is of such weight that it could probably change the judgment
as there would then be no evidence to sustain the judgment of
conviction.

ACCORDINGLY, the Court resolved to SET ASIDE the appellate court’s
decision and to remand the records of the case to the trial court below
for a new trial.

Melencio-Herrera, Plana, Relova, and Gutierrez, Jr., JJ., concur.