GEORGIA G. TUMANG, PETITIONER, VS. HON. COURT OF APPEALS AND SPOUSES DANIEL DEL MUNDO, JR. AND HAYDEE T. DEL MUNDO, RESPONDENTS.

The present petition seeks a review of the Resolution dated 18 November 1987 of the Court of
Appeals in C.A.-G.R. No. 03201, specifically the portion thereof granting the
respondent spouses’ motion for new trial.

On 22 January 1979,
petitioner Georgia Tumang commenced action against
respondent spouses Daniel and Haydee Del Mundo in the Regional
Trial Court of
Baguio City,
to annul certain documents of sale covering her interest in a lot situated at No.
7 Military Cut-Off Road, Baguio
City.  The complaint, docketed as Civil
Case No. 3484, alleged that petitioner was the registered owner of the
mentioned lot covered by Original Certificate of Title No. T-1289; that as an
act of accommodation for the benefit of respondent spouses Haydee
del Mundo and Daniel Del Mundo
(who are petitioner’s sister and brother-in-law, respectively), petitioner
executed two (2) deeds of sale over her nine-tenth (9/10) interest in the
property and a document confirming the sale of such interest, all of which
instruments were executed without any consideration moving from respondent
spouses to petitioner; that the accommodation was intended to enable respondent
Daniel del Mundo, an employee of the Bureau of
Internal Revenue, to “puff7 up” his personal holdings so he could
comply with the government’s policy requiring its employees to make full disclosure of all their properties;
that respondent spouses breached her trust when they had caused the
registration of the lot, and issuance of Transfer Certificate of Title No.
T-27584, to include their own names as co-owners (1/10 for petitioner and 9/10
for respondent spouses); that the respondents, despite several demands, refused
to return her property.

Respondent spouses, in their answer, contended that the deeds of
sale were not without any consideration; that since the execution of the
questioned documents, they have been in possession of the land and been paying
realty taxes thereon; that it was petitioner who had formally requested the
Register of Deeds of Baguio City to cancel her title
and to issue another and new title in their (petitioner and respondent spouses)
names. Respondents filed a counterclaim for damages.

On 10 May 1984,
the Regional Trial
Court of Baguio City,
Branch 4, rendered a Decision in favor of petitioner
and against respondent
spouses, the dispositive part of which reads:

“WHEREFORE, this court renders judgment in favor of plaintiff,
and against defendants, as follows:

A.     
Declaring null and void –

1.     The deed of sale, dated December 28, 1973,
conveying 40% of plaintiff’s rights and interest over the 700-square meter lot,
as well as improvements thereon, at No. 7 Military Cut-Off, Baguio
City (Exhibit B);

2.     The second deed of sale, dated May 27, 1975, conveying 85% of
plaintiff’s rights and interests over a 1,000-square meter lot as Res. Sec. A,
more particularly described in T.S.A. V-1791, Baguio City (Exhibit C);

3.     The ‘Ratification and Confirmation of the
Sale of Undivided Interests in a Parcel of Land’ dated June 14, 1977, in lieu of Original Certificate of
Title No. P-1289.

B.      Ordering defendants to
reconvey to plaintiff their 9/10 share over the
parcel of land covered by Transfer Certificate of Title No. T-27584 immediately
upon the finality of the decision.  Their
failure to do so will cause this court to direct the Acting Clerk of Court to
execute the corresponding deed of conveyance in favor of plaintiff; and

C.      Ordering plaintiff and
defendants to surrender to the court the co-owner’s duplicate copy of Transfer
Certificate of Title No. T-27584, likewise immediately upon the finality of the
decision, failing which, the said co-owner’s duplicate copy of the title shall
be rendered automatically null and void. 
In either case, the Register of Deeds shall thereafter cancel Transfer
Certificate of Title No. T-27584, and issue a new title in the name of
plaintiff as the sole owner of the subject lot, as well as improvements
thereon.”^[1]

On appeal, the Court of Appeals affirmed in toto the appealed judgment in a Decision promulgated
on 8 October 1986.

Respondent spouses immediately filed a Motion for Reconsideration
and for New Trial alleging that the Court of Appeals’ decision was based on
insufficient evidence and was contrary to law; that new evidence consisting of
receipts signed by petitioner apparently showing that she had received various
sums of money totalling P69,992.00 from respondent
spouses as consideration for the transactions here involved, were discovered
after trial which are material and relevant to the case.

In a Resolution
dated 18 November 1987,
the Court of Appeals denied respondents’ Motion for Reconsideration but granted
the request for a new trial holding that

“[t]here is sufficient ground for new trial of the case.  It is not seriously disputed that the
receipts constituting the new evidence were discovered after the trial of the
case has been concluded.  Likewise,
these receipts could not have been discovered earlier despite appellants’
reasonable diligence in searching for the same. 
The receipts bear the signature of plaintiff-appellee
Georgia Tumang and same appear to be in her own
handwriting. They purport to establish the consideration for the
transaction of the parties.  Needless to
state, their reception as evidence could change the complexion of the case.

IN VIEW WHEREOF, defendants-appellants’ motion for reconsideration
is denied for lack of merit.  Their
motion for new trial is however granted and consequently the case is remanded
to the trial court for further proceedings.

SO ORDERED.”^[2]
(Underscoring supplied)

Petitioner’s subsequent motion for reconsideration of the above
resolution was denied for lack of merit in a minute resolution dated 4 February 1988.

Hence, this Petition.

Petitioner argues that respondent Court of Appeals erred in
regarding the receipts as “newly discovered evidence” and in allowing
new trial on this ground.

A motion for new trial upon the ground of newly discovered
evidence, is properly granted where there is concurrence of the following
requisites, namely: a) the evidence had been discovered after trial; b) the evidence
could not have been discovered and produced during trial even with the exercise
of reasonable diligence; and c) the evidence is material, and not merely
corroborative, cumulative, or impeaching and is of such weight that if
admitted, would probably alter the result.^[3]

Petitioner does not dispute that the receipts which respondents
intend to submit as new evidence were found subsequent to the trial.  Petitioner, however, chiefly argues that the
receipts do not constitute newly discovered evidence but are merely
“forgotten evidence,” being already in existence during trial and
which could have been discovered and
there presented by the respondents had they exercised due diligence in
searching for such receipts.

Newly discovered
evidence, under prevailing jurisprudence, need not be newly created evidence;
newly discovered evidence, in other words may and does commonly refer to
evidence already in existence prior or during the trial but which could not
have been secured and presented during the trial despite reasonable diligence
on the part of the litigant offering it or his counsel.^[4] Newly discovered evidence, again, is not
limited to evidence which, though already in existence before or during trial
was not known to the offering litigant. 
So-called “forgotten” evidence may, upon the other hand, be
seen to refer to evidence already in existence or available before or during
trial, which was known to and obtainable by the party offering it and,^[5] which could have been presented and offered
in a seasonable manner were it not for the oversight or forgetfulness of such
party or his counsel.^[6]

In order that a
particular piece of evidence may be properly regarded as “newly
discovered” for purposes of a grant of new trial, what is essential is not
so much the time when the evidence offered first sprang into existence nor the
time when it first came to the knowledge of the party now submitting it: what
is essential is, rather, that the offering party had exercised
reasonable diligence in seeking to locate such evidence before or during
trial but had nonetheless failed to secure it. 
Thus, a party who, prior to the trial had, no means of knowing that a
specific piece of evidence existed and was in fact obtainable, can scarcely be
charged with lack of diligence. 
It is commonplace to observe that the term “diligence” is a
relative and variable one, not capable of exact definition
and the contents of which must depend entirely on the particular configuration
of facts obtaining in each case.

In the case at bar, the
receipts which the Court of Appeals considered newly discovered evidence were
found by respondent Daniel del Mundo, according to
his affidavit of merit attached to the Motion for Reconsideration and for New
Trial.^[7] on 4 October 1986 in their residence at No. 3905 Marigold Road, Parañaque, Metro Manila, when,
in the course of “a general cleaning and re-arrangement” of their
house necessitated by floods caused by heavy rains, he happened to look into an
old desk in his “study cubicle.” He sorted out various items “such
as old cards, letters, memorabilia, pamphlets, brochures, and similar
miscellaneous things accumulated through the years.” He found in “the
bottom back portion of a drawer in said desk an old envelope containing “a bunch of documents” among which, it turned out, were the receipts
issued by petitioner Dr. Georgia Tumang to respondent
spouses.  The latter had “believed
these receipts to have been lost and no longer existing,” having been
unable, to locate them “despite diligent effort(s) to search all documents
and files in our possession.”

We agree with the Court
of Appeals that the receipts submitted by the respondent spouses are properly
regarded as newly discovered evidence warranting the grant of a new trial.  The receipts, previously thought lost and
gone forever and found in the “bottom back portion” of a drawer in an
old and unused desk, could hardly have been located with the exercise of
average or reasonable diligence; indeed, it was in the course of a
“general (house) cleaning and re-arrangement” of the respondents’
house that they were found once again. 
This is what the Court of Appeals in effect held.  We think that the respondent spouses’
explanation has the ring of truth; it certainly is entirely plausible.  It seems quite reasonable to assume that the
respondents would have exerted all efforts to locate the receipts earlier; it
was clearly in their interest and to their advantage to have presented them
during the trial had they in fact been effectively available to them at that time, since the receipts appear to contradict petitioner’s
express denial of receipt of any money in connection with the transfer of 9/10
of her interest in the property
involved.  The receipts also appear to
support respondent spouses’ defense that the three (3) documents nullified by the trial court were
not simulated merely to avoid possible anti-corruption charges against
respondent Daniel del Mundo but had in fact been
executed for value. 
The receipts are, in other words, apparently of such import that a
reasonably prudent man would have most diligently searched for them.

There is no question then
that the receipts involved are material and relevant to the issue of lack of
consideration, and could possibly effect a change in the result reached by the
trial court.

Finally, we note that the
grant or denial of a new trial is generally speaking addressed to the sound
discretion of the court, a discretion
which cannot be interfered with unless a clear abuse thereof is shown.^[8] Petitioner has not shown such an abuse here.
 On the contrary, it appears to us that
the interests of substantial justice would best be served by remanding, as the
Court of Appeals did, the case to the trial court for a new trial, where the
precise import of the receipts may be litigated.  Petitioner does not dispute the authenticity
of her signature on the receipts; however, she argues that, the moneys receipted for were only received “in
trust” for the maintenance and educational expenses of respondents’
children who were then attending school in Baguio.  The
question of whether the sums of money were actually received “in
trust” for some unrelated-purpose, or whether they had been received in payment for the sale of the property involved, can only be properly
threshed out in a new trial.

ACCORDINGLY, the Petition is DENIED and the Court of
Appeals’ Resolution dated 18 November
1987 is hereby AFFIRMED.

SO ORDERED.

Fernan, C.J., (Chairman), Gutierrez,
Jr., Bidin, and
Cortes, JJ., concur.

^[1]
Rollo, p.
28.

^[2]
Id., pp. 69-73.

^[3]
Section 1 (b), Rule 37 of the Revised Rules of Court; People v. Aleman, 102 SCRA 765 (1981); People v. Llamosa 91 SCRA 364 (1979); and People v. Mangulabnan, 99 Phil. 992 (1956).

^[4]
People v. Ventura, 115 Phil. 718 (1962).

^[5]
Bersabal v. Bernal, 13 Phil. 463 (1909).

^[6]
Manila Railroad v. Mitchel, 49 Phil. 801 (1926).

^[7]
The affidavit of merit is quoted in
full in the Court of Appeals’ Resolution dated 18 November 1987; Rollo, pp. 70-72.

^[8]
Republic v. Vda,
de Castellvi, 58 SCRA 337 (1974).