G.R. No. 170598 October 9, 2013
FAR EAST BANK TRUST COMPANY, Petitioner, vs. ROBERTO MAR CHANTE, a.k.a. ROBERT MAR G. CHAN, Respondent.

FACTS

Petitioner Far East Bank and Trust Company (FEBTC) filed a complaint to recover from its depositor, respondent Robert Mar Chante, the sum of ₱770,488.30. This amount represented the unpaid balance of ₱967,000 allegedly withdrawn from Chante’s current account over 242 ATM transactions at a Philippine National Bank MEGALINK facility within a span of a few hours. FEBTC alleged Chante exploited a “system bug” in its computer network that allowed these withdrawals despite his account having insufficient funds and exceeding the daily withdrawal limit. The bank debited his account for the available balance and demanded reimbursement for the excess.
Chante denied making the withdrawals, asserting he was at home during the period in question. He claimed physical impossibility to perform 242 consecutive transactions and suggested an “inside job,” referencing a newspaper report about a bank employee fraudulently debiting accounts. He contended the bank’s system failure, not his actions, caused the loss.

ISSUE

Whether FEBTC discharged its burden of proof to establish that Chante was liable for the fraudulent ATM withdrawals.

RULING

No. The Supreme Court ruled in favor of Chante, affirming the Court of Appeals’ decision. The Court emphasized that in civil cases, the burden of proof lies with the plaintiff, who must establish its case by a preponderance of evidence. FEBTC failed to meet this burden. Its primary evidence was the MEGALINK journal tapes showing the use of Chante’s card. However, the Court found this insufficient to prove that Chante personally performed the transactions. The mere use of a card and PIN does not conclusively establish the depositor’s identity as the perpetrator, especially given the proven existence of a system bug that facilitated the anomalous withdrawals.
The Court gave weight to the finding that the withdrawals were made possible by a glitch in FEBTC’s system which, when the Ongpin branch was offline, routed transactions to a “shadow posting file” that did not perform real-time balance checks. This system defect was the direct cause of the loss. FEBTC did not present clear evidence, such as security camera footage, to positively identify Chante at the ATM. Without such proof, and considering the system malfunction, the bank could not overcome the presumption that it was negligent in safeguarding the account. Consequently, as the party alleging fraud, FEBTC bore the risk of its own system’s failure and could not shift the loss to the depositor.