FAR EAST BANK & TRUST COMPANY (FEBTC) vs.

ROBERT MAR
CHANTE

G. R. No. 170598, October 09, 2013

DOCTRINE:

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.

FACTS:

Instant complaint was filed by FEBTC against Chante to recover from Chan the principal
sum of P770,488.30 representing the unpaid balance of the amount fraudulently withdrawn
from Chan’s ATM. FEBTC alleged that Chan had withdrawn funds totaling P967,000.00
from the PNB-MEGALINK ATM facility at the Manila Pavilion Hotel in Manila; that the
withdrawals were done in a series of 242 transactions with the use of the same machine, at
P4,000.00/withdrawal; and that the transactions were processed and recorded by the
respective computer systems of PNB and MEGALINK despite the following circumstances,
namely: (a)the offline status of the branch of account (FEBTC Ongpin Branch); (b)
Chan’s account balance being only P198,511.70 at the time; (c) the maximum
withdrawal limit of the ATM facility being P50,000.00/day; and (d) his withdrawal
transactions not being reflected in his account, and no debits or deductions from his
current account with the FEBTC Ongpin Branch being recorded. FEBTC asserted
further that defendant took advantage of a system bug which allowed the excessive
withdrawals.

Chan denied liability 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.
ISSUE: May civil action be decided in favor of the plaintiff where the defendant relies
on bare and uncorroborated denial of the former’s allegation?

HELD:

No. The party who alleges an affirmative fact has the burden of proving it because mere
allegation of the fact is not evidence of it. Verily, the party who asserts, not he who
denies, must prove.

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

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.

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. 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.

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.
IBAAN RURAL BANK INC. vs. THE COURT OF APPEALS and MR.
and MRS. RAMON TARNATE

H. R. No. 123817, December 17, 1999

DOCTRINE:

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.

FACTS:

Spouses Tarnate entered into a Deed of Absolute Sale with Assumption of Mortgage of
the lots in question from its original owner Spouses Reyes. The Tarnates failed to pay
the loan and the bank extra-judicially foreclosed on the mortgaged lots. At the public
auction, the bank was the sole bidder. Consequently, a certificate of sale was issued. The
said certificate stated that redemption period expires two (2) years from the registration
of the sale. Certificate of sale was registered on October 16, 1979.

Within the two (2) year period, private respondents offered to redeem the foreclosed lots
and tendered the redemption amount. However, petitioner Bank refused and argued that
the right to redeem had prescribed, as more than one year had elapsed from the
registration of the Certificate of Sale. Private respondents filed a complaint to compel
the bank to allow their redemption of the foreclosed lots. They 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.

ISSUE:

Does failure to previously contest the redemption period stated on the certificate of sale
precludes the bank from asserting it as a defense to oppose the exercise of right of
redemption?

HELD:
Yes. 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.

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. 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.
SPOUSES REYNALDO ALCARAZ and ESMERALDA ALCARAZ
PEDRO M. TANGGA-AN et al.
G. R. No. 128568, April 9, 2003

DOCTRINE:

Whenever a party has, by his own declaration, act, or omission, intentionally and
deliberately led another to believe a particular thing true, and to act upon such belief, he
cannot, in any litigation arising out of such declaration, act or omission, be permitted to
falsify it.

FACTS:

Reynaldo leased a building from Esmeralda’s predecessor (Virginia). At the time of the
perfection of the contract, the Reynaldo, as lessees, were aware that the NHA, and not
Virginia, the lessor, owned the land on which the rented house stood yet they signed the
same, obliged themselves to comply with the terms thereof for five years and performed
their obligations as lessees for two years.

After two years from the effectivity of the lease contract, Esmeralda filed a complaint for
unlawful detainer, with damages against Reynaldo for failure to pay rent. On the other
hand, the latter alleged that they paid the rent to the new owners (Virgilio and Angelita)
of the lot where the building stood and not to respondents since the latter supposedly no
longer had the legal right to collect rentals. They further claimed that the lease contract
ceased to be effective because Virgilio’s assumption of ownership of the land stripped
the respondents of ownership of the building.

MTC rendered a decision in favor of plaintiffs. MTC ruled that petitioner failed to show
that the subject house belonged to Virgilio. On the other hand, the respondents proved
that the property in question is registered in their name. On appeal, the RTC affirmed the
decision of the MTC based on the petitioner’s failure to present any documentary
evidence modifying or amending the contract of lease to justify the transfer of payment
of the monthly rental to Virgilio Tanga-an who claims only as the registered owner of
the lot on which the leased house is located.

ISSUE:
May a defendant in a suit to which the cause of action arises from a contract assail the
operation of such contract by disputing a previously affirmed fact?

HELD:

No. Reynaldo was aware that the lot in question was not owned by the lessors at the time the
lease contract was entered into. After recognizing the validity of the lease contract for two
years, the Reyanldo is barred from alleging the automatic cancellation of the contract on the
ground that the Esmeralda lost ownership of the house after Virgilio acquired title over the
lot. Section 2, Rule 131 of the Rules of Court provides as a conclusive presumption that:

Sec. 2. Conclusive presumptions. — The following are instances of conclusive

presumptions:

(a) Whenever a party has, by his own declaration, act, or omission, intentionally and
deliberately led another to believe a particular thing true, and to act upon such belief, he
cannot, in any litigation arising out of such declaration, act or omission, be permitted to
falsify it; xxx
University of Mindanao vs. Bangko Sentral ng Pilipinas et al.
GR No. 194964, January 11, 2016

DOCTRINE:

Conclusive presumptions are presumptions that may not be overturned by evidence,

however strong the evidence is. They are made conclusive not because there is an
established uniformity in behavior whenever identified circumstances arise. On the
other hand, disputable presumptions are presumptions that may be overcome by
contrary evidence. They are disputable in recognition of the variability of human
behavior. Presumptions are not always true. They may be wrong under certain
circumstances, and courts are expected to apply them, keeping in mind the nuances of
every experience that may render the expectations wrong.

FACTS:

Guillermo B. Torres and Dolores P. Torres incorporated and operated two (2) thrift
banks: (1) First Iligan Savings & Loan Association, Inc. (FISLAI); and (2) Davao
Savings and Loan Association, Inc. (DSLAI). Guillermo B. Torres chaired both thrift
banks. He acted as FISLAI's President, while his wife, Dolores P. Torres, acted as
DSLAI's President and FISLAI's Treasurer. Upon Guillermo B. Torres' request,
Bangko Sentral ng Pilipinas issued a P1.9 million standby emergency credit to FISLAI.
On May 25, 1982, University of Mindanao's Vice President for Finance, Saturnino
Petalcorin, executed a deed of real estate mortgage over University of Mindanao's
property in Cagayan de Oro City in favor of Bangko Sentral ng Pilipinas. "The
mortgage served as security for FISLAI's PI.9 Million loan" It was allegedly executed
on University of Mindanao's behalf. As proof of his authority to execute a real estate
mortgage for University of Mindanao, Saturnino Petalcorin showed a Secretary's
Certificate signed by University of Mindanao's Corporate Secretary, Aurora de Leon.
The Secretary’s certificate states among others the authorizing of the chairman to
appoint Satunino Pactolerin to represent the University of Mindanao to transact,
transfer, convey, lease, mortgage, or otherwise hypothecate the subject properties.
Saturnino Petalcorin executed another deed of real estate mortgage, allegedly on behalf
of University of Mindanao, over its two properties in Iligan City. This mortgage served
as additional security for FISLAI's loans. FISLAI and DSLAI eventually merged with
DSLAI as the surviving corporation in an effort to rehabilitate the thrift banks due to the
heavy withdrawals of depositors. DSLAI later became known as Mindanao Savings
and Loan Association, Inc. (MSLAI). MSLAI failed to recover from its losses. Bangko
Sentral ng Pilipinas later on foreclosed the mortgaged properties. University of
Mindanao filed two Complaints for nullification and cancellation of mortgage. One
Complaint was filed before the Regional Trial Court of Cagayan de Oro City, and the
other Complaint was filed before the Regional Trial Court of Iligan City. University of
Mindanao alleged that it did not obtain any loan from Bangko Sentral ng Pilipinas and
that Aurora De Leon’s certification was anomalous. That it never authorized Saturnino
Petalcorin to execute real estate mortgage contracts involving its properties to secure
FISLAI's debts and it never ratified the execution of the mortgage contracts. The
Regional Trial Courts ruled in favor of University of Mindanao. The Court of Appeals
however ruled that "although BSP failed to prove that the UM Board of Trustees
actually passed a Board Resolution authorizing Petalcorin to mortgage the subject real
properties, Aurora de Leon's Secretary's Certificate" clothed Petalcorin with apparent
and ostensible authority to execute the mortgage deed on its behalf. Bangko Sentral ng
Pilipinas merely relied in good faith on the Secretary's Certificate. University of
Mindanao is estopped from denying Saturnino Petalcorin's authority.

ISSUE:

Is University of Mindanao bound by the real estate mortgage contracts executed by

Saturnino Petalcorin?

RULING:

No. Petitioner argues that the execution of the mortgage contract was ultra vires. As
an educational institution, it may not secure the loans of third persons Securing loans
of third persons is not among the purposes for which petitioner was established.

In ruling in favor of the contract’s validity, this court considered the incidental powers
of the hotel to include the execution of employment contracts with entertainers for the
purpose of providing its guests entertainment and increasing patronage.

This court ruled that a contract executed by a corporation shall be presumed valid if
on its face its execution was not beyond the powers of the corporation to do. Thus:

When a contract is not on its face necessarily beyond the scope of the
power of the corporation by which it was made, it will, in the absence
of proof to the contrary, be presumed to be valid. Corporations are
presumed to contract within their powers. The doctrine of ultra vires,
when invoked for or against a corporation, should not be allowed to
prevail where it would defeat the ends of justice or work a legal wrong.

Presumptions may be conclusive or disputable.

Conclusive presumptions are presumptions that may not be overturned by evidence,

however strong the evidence is. They are made conclusive not because there is an
established uniformity in behavior whenever identified circumstances arise. They are
conclusive because they are declared as such under the law or the rules. Rule 131,
Section 2 of the Rules of Court identifies two (2) conclusive presumptions:

SEC. 2. Conclusive presumptions.— The following are instances of conclusive

presumptions:

(a) Whenever a party has, by his own declaration, act, or omission, intentionally and
deliberately led another to believe a particular thing true, and to act upon such belief,
he cannot, in any litigation arising out of such declaration, act or omission, be
permitted to falsify it;

(b) The tenant is not permitted to deny the title of his landlord at the time of the
commencement of the relation of landlord and tenant between them.

On the other hand, disputable presumptions are presumptions that may be overcome
by contrary evidence.99 They are disputable in recognition of the variability of human
behavior. Presumptions are not always true. They may be wrong under certain
circumstances, and courts are expected to apply them, keeping in mind the nuances of
every experience that may render the expectations wrong.

Thus, the application of disputable presumptions on a given circumstance must be

based on the existence of certain facts on which they are meant to operate.
"[P]resumptions are not allegations, nor do they supply their absence[.]" Presumptions
are conclusions. They do not apply when there are no facts or allegations to support
them.

If the facts exist to set in motion the operation of a disputable presumption, courts
may accept the presumption. However, contrary evidence may be presented to rebut
the presumption.
HOSPICIO D. ROSAROSO et al. vs. LUCILA LABORTE SORIA et al. G.R. No.
194846, June 28, 2013

DOCTRINE:

Section 3, Rule 131 of the Rules of Court, the following are disputable presumptions: (1)
private transactions have been fair and regular; (2) the ordinary course of business has been
followed; and (3) there was sufficient consideration for a contract. These presumptions
operate against an adversary who has not introduced proof to rebut them.

FACTS:

Rosaroso filed a complaint for nullity of the SPA authorizing Soria to sell the subject
disputed lots to Meridian, as well as the deed of sale entered into pursuant to the said
SPA. Petitioner alleged that the said lot had already sold to them by their predecessor
Luis Rosaroso.

During trial the second wife of Luis, Lourdes testified deed of sale in favor of
petitioners, was obtained through fraud, deceit and trickery. She explained that they
signed the prepared deed out of pity because petitioners told them that it was necessary
for a loan application.

RTC ruled in favor of Rosaroso. On appeal, the CA reversed and set aside the RTC
decision. The CA ruled that the first deed of sale in favor of petitioners was void because
they failed to prove that they indeed tendered a consideration for the four (4) parcels of
land. It relied on the testimony of Lourdes that petitioners did not pay her husband. The
price or consideration for the sale was simulated to make it appear that payment had
been tendered when in fact no payment was made at all.

ISSUE:

May the validity of a contract be assailed on a mere testimony that it has no

consideration?

HELD:
No. Under Section 3, Rule 131 of the Rules of Court, the following are disputable
presumptions: (1) private transactions have been fair and regular; (2) the ordinary course of
business has been followed; and (3) there was sufficient consideration for a contract.
These presumptions operate against an adversary who has not introduced proof to rebut
them. They create the necessity of presenting evidence to rebut the prima facie case they
created, and which, if no proof to the contrary is presented and offered, will prevail. The
burden of proof remains where it is but, by the presumption, the one who has that burden
is relieved for the time being from introducing evidence in support of the averment,
because the presumption stands in the place of evidence unless rebutted.

In this case, the respondents failed to trounce the said presumption. Aside from their
bare allegation that the sale was made without a consideration, they failed to supply clear
and convincing evidence to back up this claim. It is elementary in procedural law that
bare allegations, unsubstantiated by evidence, are not equivalent to proof under the
Rules of Court.

The CA decision ran counter to this established rule regarding disputable presumption. It
relied heavily on the account of Lourdes who testified that the children of Luis
approached him and convinced him to sign the deed of sale, explaining that it was
necessary for a loan application, but they did not pay the purchase price for the subject
properties. This testimony, however, is self-serving and would not amount to a clear and
convincing evidence required by law to dispute the said presumption. As such, the
presumption that there was sufficient consideration will not be disturbed.