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BURDEN OF PROOF VS BURDEN OF EVIDENCE

FAR EAST BANK TRUST COMPANY, Petitioner,


vs.
ROBERTO MAR CHANTE, a.k.a. ROBERT MAR G. CHAN, Respondents.

G.R. No. 170598 October 9, 2013

Burden of proof is a term that refers to two separate and quite different concepts, namely: (a) the risk of
non-persuasion, or the burden of persuasion, or simply persuasion burden; and (b) the duty of producing
evidence, or the burden of going forward with the evidence, or simply the production burden or the burden
of evidence.10 In its first concept, it is the duty to establish the truth of a given proposition or issue by such
a quantum of evidence as the law demands in the case at which the issue arises.11 In its other concept, it
is the duty of producing evidence at the beginning or at any subsequent stage of trial in order to make or
meet a prima facie case. Generally speaking, burden of proof in its second concept passes from party to
party as the case progresses, while in its first concept it rests throughout upon the party asserting the
affirmative of the issue.

FACTS:

Civil Case was filed by petitioner Far East Bank & Trust Co. (FEBTC) in the RTC,3 to recover from Chan
the principal sum of ₱770,488.30 representing the unpaid balance of the amount fraudulently withdrawn
from Chan’s Current Account No. 5012-00340-3 with the use of Far East Card No. 05-01120-5-0. FEBTC
alleged that between 8:52 p.m. of May 4, 1992 and 4:06 a.m. of May 5, 1992, Chan had used Far East
Card No. 05-01120-5-0 to withdraw funds totalling ₱967,000.00 from the PNB-MEGALINK ATM facility at
the Manila Pavilion Hotel in Manila. FEBTC added that at the time of the ATM withdrawal transactions,
there was an error in its computer system known as "system bug" whose nature had allowed Chan to
successfully withdraw funds in excess of his current credit balance of ₱198,511.70; and that Chan had
taken advantage of the system bug to do the withdrawal transactions. n his part, Chan denied liability.
Although admitting his physical possession of Far East Card No. 05-01120-5-0 on May 4 and May 5,
1992, he denied making the ATM withdrawals totalling ₱967,000.00, and instead insisted that he had
been actually home at the time of the withdrawals. He alluded to a possible "inside job" as the cause of
the supposed withdrawals, citing a newspaper report to the effect that an employee of FEBTC’s had
admitted having debited accounts of its depositors by using his knowledge of computers as well as
information available to him. Chan claimed that it would be physically impossible for any human being like
him to stand long hours in front of the ATM facility just to withdraw funds. He contested the debiting of his
account, stating that the debiting had affected his business and had caused him to suffer great humiliation
after the dishonor of his sufficiently-funded checks by FEBTC.

The records show that FEBTC discovered the system bug only after its routine reconciliation of the ATM-
MEGALINK transactions on May 7, 1992; that it immediately adopted remedial and corrective measures
to protect its interest in order to avoid incurring further damage as well as to prevent a recurrence of the
incident; that one of the measures it adopted pursuant to its ATM Service Agreement with Chan was to
program its computer system to repossess his ATM card; that his ATM card was repossessed at the
Ermita Branch of FEBTC when he again attempted to withdraw at the ATM facility there; that the ATM
facility retained his ATM card until its recovery by the bank; and that FEBTC conducted an in-depth
investigation and a time-and-motion study of the withdrawals in question.

ISSUE: WON Chan be held liable

HELD: NO

Although there was no question that Chan had the physical possession of Far East Card No. 05-01120-5-
0 at the time of the withdrawals, the exclusive possession of the card alone did not suffice to
preponderantly establish that he had himself made the withdrawals, or that he had caused the
withdrawals to be made. In his answer, he denied using the card to withdraw funds from his account on
the dates in question, and averred that the withdrawals had been an "inside job." His denial effectively
traversed FEBTC’s claim of his direct and personal liability for the withdrawals, that it would lose the case
unless it competently and sufficiently established that he had personally made the withdrawals himself, or
that he had caused the withdrawals. In other words, it carried the burden of proof.

Burden of proof is a term that refers to two separate and quite different concepts, namely: (a) the risk of
non-persuasion, or the burden of persuasion, or simply persuasion burden; and (b) the duty of producing
evidence, or the burden of going forward with the evidence, or simply the production burden or the burden
of evidence.10 In its first concept, it is the duty to establish the truth of a given proposition or issue by such
a quantum of evidence as the law demands in the case at which the issue arises.11 In its other concept, it
is the duty of producing evidence at the beginning or at any subsequent stage of trial in order to make or
meet a prima facie case. Generally speaking, burden of proof in its second concept passes from party to
party as the case progresses, while in its first concept it rests throughout upon the party asserting the
affirmative of the issue.12

The party who alleges an affirmative fact has the burden of proving it because mere allegation of the fact
is not evidence of it.13 Verily, the party who asserts, not he who denies, must prove.14

In civil cases, the burden of proof is on the party who would be defeated if no evidence is given on either
side.15This is because our system frees the trier of facts from the responsibility of investigating and
presenting the facts and arguments, placing that responsibility entirely upon the respective parties. 16 The
burden of proof, which may either be on the plaintiff or the defendant, is on the plaintiff if the defendant
denies the factual allegations of the complaint in the manner required by the Rules of Court; or on the
defendant if he admits expressly or impliedly the essential allegations but raises an affirmative defense or
defenses, that, if proved, would exculpate him from liability.

Being the plaintiff, FEBTC must rely on the strength of its own evidence instead of upon the weakness of
Chan’s evidence. Its burden of proof thus required it to preponderantly demonstrate that his ATM card
had been used to make the withdrawals, and that he had used the ATM card and PIN by himself or by
another person to make the fraudulent withdrawals. Otherwise, it could not recover from him any funds
supposedly improperly withdrawn from the ATM account. We remind that as a banking institution, FEBTC
had the duty and responsibility to ensure the safety of the funds it held in trust for its depositors. It could
not avoid the duty or evade the responsibility because it alone should bear the price for the fraud resulting
from the system bug on account of its exclusive control of its computer system.

CONCLUSIVE PRESUMPTION

BAAN RURAL BANK INC., petitioner, vs. THE COURT OF APPEALS and MR. and MRS. RAMON
TARNATE, respondents.

[G.R. No. 123817. December 17, 1999]

When circumstances imply a duty to speak on the part of the person for whom an obligation is proposed,
his silence can be construed as consent.

Estoppel in pais arises when one, by his acts, representations or admissions, or by his own silence when
he ought to speak out, intentionally or through culpable negligence, induces another to believe certain
facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the
former is permitted to deny the existence of such facts.[7]

FACTS:
Spouses Cesar and Leonila Reyes were the owners of three (3) lots. On March 21, 1976, the spouses
mortgaged these lots to Ibaan Rural Bank, Inc. [herein petitioner]. On June 11, 1976, with the knowledge
and consent of the petitioner, the spouses as sellers, and Mr. and Mrs. Ramon Tarnate [herein private
respondents] as buyers, entered into a Deed of Absolute Sale with Assumption of Mortgage of the lots in
question. Private respondents failed to pay the loan and the bank extra-judicially foreclosed on the
mortgaged lots. The Provincial Sheriff conducted a public auction of the lots and awarded the lots to the
bank, the sole bidder. On December 13, 1978, the Provincial Sheriff issued a Certificate of Sale which
was registered on October 16, 1979. The certificate stated that the redemption period expires two (2)
years from the registration of the sale. No notice of the extrajudicial foreclosure was given to the private
respondents. On September 23, 1981, private respondents offered to redeem the foreclosed lots and
tendered the redemption amount of P77,737.45. However, petitioner Bank refused the redemption on the
ground that it had consolidated its titles over the lots. The Provincial Sheriff also denied the redemption
on the ground that private respondents did not appear on the title to be the owners of the lots.

Private respondents filed a complaint to compel the bank to allow their redemption of the foreclosed
lots. They alleged that the extra-judicial foreclosure was null and void for lack of valid notice and demand
upon them. They further argued that they were entitled to redeem the foreclosed lots because they offered
to redeem and tendered the redemption price before October 16, 1981, the deadline of the 2-year
redemption period.
The bank opposed the redemption, contending that the private respondents had no right to redeem
the lots because they were not the real parties in interest; that at the time they offered to redeem on
September 23, 1981, the right to redeem had prescribed, as more than one year had elapsed from the
registration of the Certificate of Sale on October 16, 1979; that there was no need of personal notice to
them because under Section 3 of Act 3135, only the posting of notice of sale at three public places of the
municipality where the properties are located was required.[
ISSUE: What was the period of redemption: two years as unilaterally fixed by the sheriff in the contract, or
one year as fixed by law?
HELD: 2 years

When petitioner received a copy of the Certificate of Sale registered in the Office of the Register of
Deeds of Lipa City, it had actual and constructive knowledge of the certificate and its contents. [5] For two
years, it did not object to the two-year redemption period provided in the certificate. Thus, it could be said
that petitioner consented to the two-year redemption period specially since it had time to object and did
not. When circumstances imply a duty to speak on the part of the person for whom an obligation is
proposed, his silence can be construed as consent.[6] By its silence and inaction, petitioner misled private
respondents to believe that they had two years within which to redeem the mortgage. After the lapse of two
years, petitioner is estopped from asserting that the period for redemption was only one year and that the
period had already lapsed. Estoppel in pais arises when one, by his acts, representations or admissions,
or by his own silence when he ought to speak out, intentionally or through culpable negligence, induces
another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he
will be prejudiced if the former is permitted to deny the existence of such facts. [7]
In affirming the decision of the trial court, the Court of Appeals relied on Lazo vs. Republic Surety and
Insurance Co., Inc.,[8] where the court held that the one year period of redemption provided in Act No. 3135
is only directory and can be extended by agreement of the parties. True, but it bears noting that in Lazo the
parties voluntarily agreed to extend the redemption period. Thus, the concept of legal redemption was
converted by the parties in Lazo into conventional redemption. This is not so in the instant case. There was
no voluntary agreement. In fact, the sheriff unilaterally and arbitrarily extended the period of redemption to
two (2) years in the Certificate of Sale. The parties were not even privy to the extension made by the
sheriff. Nonetheless, as above discussed, the bank can not after the lapse of two years insist that the
redemption period was one year only.
Additionally, the rule on redemption is liberally interpreted in favor of the original owner of a
property. The fact alone that he is allowed the right to redeem clearly demonstrates the solicitousness of
the law in giving him another opportunity, should his fortune improve, to recover his lost property.[9]
Lastly, petitioner is a banking institution on whom the public expects diligence, meticulousness and
mastery of its transactions. Had petitioner diligently reviewed the Certificate of Sale it could have easily
discovered that the period was extended one year beyond the usual period for redemption. Banks, being
greatly affected with public interest, are expected to exercise a degree of diligence in the handling of its
affairs higher than that expected of an ordinary business firm.