FACTS:

The case revolves around a dispute between Far East Bank & Trust Co. (FEBTC) and Robert Mar Chante regarding liability for fraudulent withdrawals from Chante's account through an ATM. FEBTC claimed that Chante used his ATM card to withdraw P967,000.00 from the ATM facility at the Manila Pavilion Hotel. Chante, however, denied responsibility and alleged that it could be an inside job by an FEBTC employee. FEBTC argued that a system bug in its computer system allowed Chante to withdraw funds exceeding his credit balance. After reconciling the transactions, FEBTC discovered the bug, initiated an investigation, and took measures to recover Chante's card. FEBTC sent letters for reimbursement, but Chante refused to comply. The Regional Trial Court ruled in favor of FEBTC, holding Chante liable for the fraudulent withdrawals.

In this case, Robert Mar Chante used his card at the Philippine National Bank (PNB) to withdraw money from his account at Far East Bank and Trust Company (FEBTC). However, due to a computer error, the ATM dispensed more money than Chante's limit for the day. Chante claimed that he did not use his card and suggested that it could be an inside job, similar to a previous theft in the bank involving an employee. The court found this possibility plausible based on Chante's actions following the incident. Two days later, Chante attempted to withdraw money at another branch but was unsuccessful as his card had been blocked. Instead, he issued a check close to the balance in his account, raising suspicion that he was hoping to exploit another computer error. The trial court held Chante liable for the excess amount obtained from the machine, citing relevant provisions of the Civil Code. FEBTC was awarded reimbursement, interest, exemplary damages, attorney's fees, and costs of the suit. Chante appealed, arguing the lack of solid evidence against him.

The case centers on the disagreement between Far East Bank and Trust Company (FEBTC) and Chan concerning withdrawals made from Chan's account. FEBTC contended that Chan should be responsible for the withdrawals, but Chan claimed that he was at home during the relevant periods and that FEBTC failed to present any witness to confirm his involvement. The court observed that there was no direct evidence establishing who made the withdrawals and acknowledged the imperfect nature of computers and ATM systems, as evident in past incidents involving FEBTC and other banks. In the absence of conclusive direct evidence, the court relied on "other than direct" evidence to arrive at a decision. The Regional Trial Court initially ruled in favor of FEBTC, but the Court of Appeals overturned the decision and ordered FEBTC to return the debited amount with interest. FEBTC's motion for reconsideration was denied.

ISSUES:

1. Whether or not the appellant should be held liable for the ATM withdrawals made from his account.

2. Whether or not the appellee should be held liable to return the amount debited from the appellant's account.

3. Did FEBTC discharge its burden of proof?

4. Are the journal tapes offered by FEBTC reliable evidence?

5. Whether the program bug in the FEBTC's computer system should be considered as negligence on the part of FEBTC.

6. Whether the subsequent acts of Chan, such as attempting to withdraw funds and issuing a check, should be considered as evidence of his participation in the fraudulent withdrawals.

7. Whether there is a likelihood that someone other than Chan committed the fraudulent withdrawals.

8. Whether FEBTC has established that the PNB-MEGALINK's ATM facility dispensed the alleged significantly large amount of cash during the fraudulent withdrawals.

9. Whether FEBTC presented sufficient evidence to prove Chan's liability for the fraudulent withdrawals.

10. Whether Chan's allegation of an "inside job" is worthy of credence or weight.

RULING:

1. The appeal lacks merit. The appellant failed to establish that he had personally made the ATM withdrawals or caused them to be made. The burden of proof is on the party who alleges an affirmative fact, and in this case, it rests upon the appellant to prove his claim. Therefore, the appellee is not liable for the ATM withdrawals, and the appellant is entitled to the return of the amount debited from his account.

2. The CA ruled that FEBTC did not discharge its burden of proof. The totality of evidence submitted by FEBTC was insufficient to establish the crucial facts that would justify a judgment in its favor.

3. The journal tapes offered by FEBTC were found to be not as reliable as FEBTC represented them to be. These tapes were not internally consistent and showed discrepancies in the amounts reflected as "ledger balance" and "available balance." These discrepancies cast doubt on the integrity of the journal tapes.

4. Yes, the program bug in the FEBTC's computer system is considered negligence on the part of FEBTC.

5. No, the subsequent acts of Chan should not be considered as evidence of his participation in the fraudulent withdrawals.

6. Yes, there is a likelihood that someone other than Chan committed the fraudulent withdrawals.

7. No, FEBTC has failed to establish that the PNB-MEGALINK's ATM facility dispensed the alleged significantly large amount of cash during the fraudulent withdrawals.

8. FEBTC failed to present preponderant evidence proving Chan's liability for the fraudulent withdrawals. FEBTC should have proved the actual dispensing of funds from the ATM facility as the factual basis for its claim against Chan, but it did not provide sufficient evidence on this matter.

9. Chan's allegation of an "inside job" should not be quickly dismissed as unworthy of credence or weight. FEBTC's own witness revealed that the bank had encountered problems of bank accounts being debited without any withdrawal transactions by the account owners. This supported Chan's denial of liability and showed the possibility of withdrawals being made by another person despite the PIN being an exclusive access number known only to the cardholder.

PRINCIPLES:

• The burden of proof is on the party who alleges an affirmative fact.

• In civil cases, the burden of proof is on the party who would be defeated if no evidence is given on either side.

• The quantum of evidence for civil actions is a preponderance of evidence, which means the superior weight of evidence on the issues involved. The court may consider all the facts and circumstances of the case in determining the preponderance of evidence.

• Preponderant evidence refers to evidence that is of greater weight or more convincing than the evidence offered in opposition to it. It is proof that leads the trier of facts to find that the existence of the contested fact is more probable than its nonexistence.

• The burden of proof lies on the plaintiff who must rely on the strength of their own evidence instead of the weakness of the opposing party's evidence.

• Banking institutions have the duty and responsibility to ensure the safety of funds held in trust for their depositors.

• Computer fraud is a possibility given available technology and computer security breaches. System errors and bugs can be taken advantage of and must be thoroughly investigated.

• Negligence in ensuring an error-free computer system can be considered a breach of duty on the part of a bank.

• Subsequent acts of a person, such as attempting to withdraw funds or issuing a check, may not always be considered as evidence of their participation in fraudulent activities.

• The possibility of someone else committing a fraudulent act should be considered, especially when there are indications of system bugs or other vulnerabilities in the computer system.

• The burden of proof is on the bank to establish that a significant amount of cash was dispensed during fraudulent withdrawals.

• The burden of proof lies on the party alleging a fact or claim.

• The standard of evidence in civil cases is preponderance of evidence, meaning that the evidence presented by one side is more convincing than that of the other.