G.R. No. 170598, October 09, 2013
FAR EAST BANK & TRUST COMPANY, Petitioners, v. ROBERT MAR CHANTE, A.K.A. ROBERT MAR G. CHAN, Respondent.
D E C I S I O N
In the instant case, what happened was that the defendant who was at the U.N. Branch of the PNB used his card. He entered his PIN to have access to a withdrawal transaction from his account in Far East Bank, Ongpin Branch. However, after recognizing the card and went to the path of his account it could not get a signal to proceed with the transaction so it proceeded to the other path who gave the signal to go on and dispense money. But there was a computer error as it did not only dispense the money limit for the day but it continued to dispense a lot more until it reached the amount of P967,000.00 which took the defendant till the hours of the morning to obtain. But defendant says he did not use his card. He alleges that it could be an inside job just like what happened to the said bank which was published in the newspaper wherein the bank employee admitted having done the theft through his knowledge of the computer. Could this be true?
The Court opines that it is not far-fetched. However why did this Court state that plaintiff’s cause of action will survive? The action of the defendant after the incident gave him away. Merely two days after the heavy withdrawal, the defendant returned not at the exact scene of the incident but at a nearby branch which is also in Ermita and tried again to withdraw. But at this time the bank already knew what happened so it blocked the card and retained it being a hot card. The defendant was not successful this time so what he did was to issue a check almost for the whole amount of his balance in his account leaving only a minimal amount. This incident puzzles the Court. Maybe the defendant was hoping that the machine nearby may likewise dispense so much amount without being detected. He will not definitely go back to the U.N. branch as he may think that it is being watched and so he went to a nearby branch. Unfortunately, luck was not with him this time and his card was taken by the bank. The fact that he hastily withdrew the balance of his account after his card was retained by the bank only showed his knowledge that the bank may debit his account. It also showed his intent to do something further other than first inquire why his card was considered a hot card if he is really innocent. When he went to the Ermita branch to withdraw from the ATM booth he was intending to withdraw not more than P50,000.00 as it is the bank’s limit for the day and if ever he needed a bigger amount than P50,000.00 immediately he should have gone to the branch for an over the counter transaction but he did not do so and instead issued a check for P190,000.00 dated May 7, 1992 and another check for P5,000.00 dated May 13, 1992. To the mind of the Court, to take advantage of a computer error, to gain sudden and undeserved amount of money should be condemned in the strongest terms.
There are no available precedents in this case regarding computer errors, but the Court feels that defendant should be held liable for the mistaken amount he was able to get from the machine based on the following provisions of the law.
Articles 19, 21, 22 and 23 of the Civil Code x x x.
x x x
There is likewise one point that the Court would like to discuss about the allegation of the defendant that it was impossible for him to withdraw the money in such long period and almost minute after minute. This Court believes that money is the least of all, a person may give priority in life. There are many who would sacrifice a lot just to have lots of it, so it would not be impossible for one to take time, stand for several hours and just enter some items in the computer if the return would be something like a million or close to a million. In fact, the effort exerted was just peanuts compared to other legitimate ways of earning a living as the only capital or means used to obtain it was the defendant’s loss of sleep and the time spent in withdrawing the same.
Moreover, though the cause of action in this case may be the erroneous dispensation of money due to computer bug which is not of defendant’s wrong doing, the Court sees that what was wrong was the failure to return the amount in excess of what was legally his. There is such a thing as JUSTICE. Justice means rendering to others their due. A person is just when he is careful about respecting the rights of others, and who knows too, how to claim what he rightfully deserves as a consequence of fulfilling his duties.
From the foregoing, the conclusion is manifest that plaintiff is within its right in initiating the instant suit, as defendant’s refusal to pay the claim constitutes the cause of action for sum of money.
x x x
WHEREFORE, judgment is hereby rendered in favor of the plaintiff Far East Bank and Trust Company and against the defendant Robert Mar Chante a.k.a. Robert Mar G. Chan ordering the latter to pay the former the following:
- the amount of P770,488.30 as actual damages representing the unrecovered balance of the amounts withdrawn by defendant;
- interest of 24% per annum on the actual damages from July 1, 1992, the date of the filing of the complaint until fully paid;
- the amount of P100,000.00 as exemplary damages;
- the sum of P30,000.00 as and for attorney’s fees; and
- the costs of the suit.
Defendant’s counterclaim is hereby dismissed for lack of merit.
1. THE TRIAL COURT ERRED IN HOLDING DEFENDANT-APPELLANT LIABLE FOR THE ALLEGED WITHDRAWAL OF THE AMOUNT OF P967,000.00 WITH INTEREST AT THE RATE OF 24% PER ANNUM BASED MERELY ON CONJECTURES AND SUSPICIONS NOT ESTABLISHED BY SOLID EVIDENCE;
2. THE TRIAL COURT ERRED IN AWARDING IN FAVOR OF APPELLEE EXEMPLARY DAMAGES IN THE AMOUNT OF P100,000.00 AND ATTORNEY’S FEES IN THE AMOUNT OF P30,000.00;
3. THE TRIAL COURT ERRED IN NOT ORDERING THE RESTITUTION OF THE AMOUNT OF P196,521.30 ILLEGALLY DEBITED BY APPELLEE FROM APPELLANT’S ACCOUNT.
x x x. The issues really before us are issues of contract application and issues of fact that would require an examination and appreciation of the evidence presented. The first order therefore in our review of the trial court’s decision is to take stock of the established and undisputed facts, and of the evidence the parties have presented. We say this at the outset as we believe that it was in this respect that the lower court failed in its consideration and appreciation of the case.
x x x
An evidentiary dilemma we face in this case is the fact that there is no direct evidence on the issue of who made the actual withdrawals. Chan correctly claims that the bank failed to present any witness testifying that he (Chan) made the actual withdrawals. At the same time, Chan can only rely on his own uncorroborated testimony that he was at home on the night that withdrawals were made. We recognize that the bank can claim that no other evidence of actual withdrawal is necessary because the PIN unique to Chan is already evidence that only Chan or his authorized representative – and none other – could have accessed his account. But at the same time, we cannot close our eyes to the fact that computers and the ATM system is not perfect as shown by an incident cited by Chan involving the FEBTC itself. Aside from the vulnerability to inside staff members, we take judicial notice that no less than our own Central Bank has publicly warned banks about other nefarious schemes involving ATM machines. In a March 7, 2003 letter, the Central Bank stated:
March 7, 2003
BSP CIRCULAR LETTER
TO : All Banks
SUBJECT : Technology Fraud on ATM Systems
Please be advised that there were incidents in other countries regarding technology fraud in ATM systems perpetrated by unscrupulous individuals and/ or syndicates.
These acts are carried out by:
1. A specialized scanner attached to the ATM card slot, and;
2. A pinhole camera
x x x
In light of the absence of conclusive direct evidence of actual withdrawal that we can rely upon, we have to depend on evidence “other than direct” to reach verdict in this case.
x x x
WHEREFORE, premises considered, we hereby GRANT the appeal and accordingly REVERSE and SET ASIDE the Decision dated May 14, 1998 of the Regional Trial Court of Manila, Branch 51, in Civil Case No. 92-61706. We accordingly ORDER plaintiff-appellee Far East Bank and Trust Company (FEBTC) to return to Chan the amount of Php196,571.30 plus 12% interest per annum computed from August 7, 1992 – the time Chan filed his counterclaim – until the obligation is satisfied. Costs against the plaintiff-appellee FEBTC.chanRoblesvirtualLawlibrary
Section 1. In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same may legitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not necessarily with the greater number. (Emphasis supplied)cralawlawlibrary
After a review of the records of this case, we find the totality of evidence submitted by FEBTC insufficient to establish the crucial facts that would justify a judgment in its favor.
To our mind, the fact that Chan’s account number and ATM card number were the ones used for the withdrawals, by itself, is not sufficient to support the conclusion that he should be deemed to have made the withdrawals. FEBTC offers in this regard the PNB ATM’s journal tapes to prove the withdrawals and their details – the time of the transactions; the account number used; the ATM card number; and the amount withdrawn – and at the same time declared that these tapes are authentic and genuine.
These tapes, however, are not as reliable as FEBTC represented them to be as they are not even internally consistent. A disturbing internal discrepancy we note relates to the amounts reflected as “ledger balance” and “available balance”. We find it strange that for every 4,000.00 pesos allegedly withdrawn by Chan, the available balance increased rather than diminished. Worse, the amount of available balance as reflected in the tapes was way above the actual available balance of less than Php200,000.00 that Chan’s current account had at that time. These discrepancies must inevitably reflect on the integrity of the journal tapes; the proven inconsistencies in some aspects of these tapes leave the other aspects suspect and uncertain. But more than this, we are not convinced that the tapes lead us to the inevitable conclusion that Chan’s card, rather than a replacement card containing Chan’s PIN and card number or some other equivalent scheme, was used. To our mind, we cannot discount this possibility given the available technology making computer fraud a possibility, the cited instances of computer security breaches, the admitted system bug, and – most notably – the fact that the withdrawals were made under circumstances that took advantage of the system bug. System errors of this kind, when taken advantage of to the extent that had happened in this case, are planned for. Indeed, prior preparation must take place to avoid suspicion and attention where the withdrawal was made for seven (7) long hours in a place frequented by hundreds of guests, over 242 transactions where the physical volume of the money withdrawn was not insignificant. To say that this was done by the owner of the account based solely on the records of the transactions, is a convenient but not a convincing explanation.20
Significantly, FEBTC made the admission that there was a program bug in its computer system. To digress, computers are run based on specific pre-arranged instructions or “programs” that act on data or information that computer users input. Computers can only process these inputted data or information according to the installed programs. Thus, computers are as efficient, as accurate and as convenient to use as the instructions in their installed programs. They can count, sort, compute and arrive at decisions but they do so only and strictly in accordance with the programs that make them work. To cite an easy example, a computer can be programmed to sort a stack of cards prepared by male and female clients, into male and female stacks, respectively. To do this, the computer will first scan a card and look at the place (“a field”) where the male/female information can be found. This information may be in an appropriate box which the bank client checks or shades to indicate if he/she is male or female. The computer will check if the box beside the word “Female” is shaded. If it is, it will send the card to the “Female” bin. If the box beside the “male” is shaded, it will send the card to the “Male” bin. If both the squares are shaded or none is shaded or the card cannot be read, it will send the card to the “Unknown” bin. This way, the female cards and the male cards can be sorted efficiently. However, the program instructions can be written in such a way that the computer can only make two decisions, that is, if the Female box is shaded, then the card goes to the “Female” bin; otherwise, the card goes to the “Male” bin. In this program, all the Female cards will be sorted correctly but the Male bin will contain all the other cards, that is, the Male cards, the cards with no shading at all, and all the other cards that cannot be classified. The imperfect results arose from the imperfect program instructions or from a program “bug”. Something very close to this example happened in the present case.
According to the testimony of the FEBTC’s systems analyst, there were two computer programs that were involved in the transactions: CAPDROTH and SCPUP 900. CAPDROTH is the program that validates if the account exists in the FEBTC files, if the transaction is valid, and if the branch where the account is maintained is ON-LINE (i.e. continuously sending data). When the Chan transaction entered the system, it was validated by CAPDROTH which, on seeing that the FEBTC-Ongpin branch was off-line, returned a decision code passing on the decision to authorize the transaction to the SCPUP 900, another module. However, SCPUP 900 was not expecting this type of response or decision code. As the SCPUP 900 program was originally written, it will send back an error message and abort a requested transaction if it receives an error message from any other module; otherwise, it will send a message authorizing the transaction. In other words, SCPUP 900 had only two decisions to make: check if the message is an error message, if not then, authorize. Since what it received in the disputed transactions were not error messages and were not also authorizations, it sent back authorization messages allowing the cash withdrawals. It kept on sending authorization messages for the 242 cash withdrawal transactions made from Chan’s account between the evening of May 4 and early morning of May 5, 1992. This program bug was the reason the 242 cash withdrawals were allowed by the PNB ATM-Megalink machine.
The program bug occurred because of the simultaneous presence of three conditions that allowed it to happen: (1) the withdrawal transactions involved a current account; (2) the current account was with a branch that at that time was off-line; and (3) the transaction originated from MEGALINK (i.e., through MEGALINK through a member bank other than FEBTC). Because of the bug, Chan’s account was not accessed at the time of the transactions so that withdrawals in excess of what the account contained were allowed. Additionally, FEBTC’s rule that only a maximum withdrawable amount per day (in the present case P50,000.00 per day) can be made from an ATM account, was by-passed. Thus, 242 withdrawals were made over an eight hour period, in the total amount of P967,000.00.22
* Vice Associate Justice Martin S. Villarama, Jr., who is on sick leave of absence, pursuant to Special Order No. 1545 (Revised).
1Rollo, pp. 42-63; penned by Associate Justice Arturo D. Brion (now a Member of this Court), with Associate Justice Eugenio S. Labitoria (retired) and Associate Justice Eliezer R. De los Santos (retired/deceased) concurring.
2 Id. at 75-82.
3 Records, pp. 1-7.
4 Supra note 3.
5 Records, p. 102.
6Rollo, pp. 78-81 (bold emphasis is supplied).
7 CA rollo, pp. 34-52.
8 Supra note 1, at 48-63.
9Rollo, pp. 65-68.
10 James, Jr., Burdens of Proof, 47 Virginia Law Review 51 (1961).
11Giblin v. Dudley Hardware Co.,44 R.I. 371, 375, 117 A. 418, 419 (1922); see also People v. Macagaling, G.R. No. 109131-33, October 3, 1994, 237 SCRA 299, 320.
12 Id.; see also Birmingham Trust & Savings Co. v. Acacia Mutual Life Ass’n, 221 Ala. 561, 130 So. 327 (1930).
13Luxuria Homes, Inc. v. Court of Appeals, G.R. No. 125986, January 28, 1999, 302 SCRA 315, 325; Coronel v. Court of Appeals, G.R. No. 103577, October 7, 1996, 263 SCRA 15, 35.
14Martin v. Court of Appeals, G.R. No. 82248, January 30, 1992, 205 SCRA 591, 596; Luxuria Homes, Inc. v. Court of Appeals, supra, at 327.
15Pacific Banking Corporation Employees Organization v. Court of Appeals, G.R. No. 109373, March 27, 1998, 288 SCRA 198, 206.
16 James, Jr., supra, at 52.
17Sambar v. Levi Straus & Co., G.R. No. 132604, March 6, 2002, 378 SCRA 364, 371.
18Jison v. Court of Appeals, G.R. No. 124853, February 24, 1998, 286 SCRA 495, 532.
19 2 McCormick on Evidence, Fifth Edition, §422.
20 Supra note 1, at 58-60 (bold emphasis is supplied).
21 TSN, July 16, 1993, pp. 70-84.
22 Supra note 1, at 51-53 (bold emphasis is supplied).
23Rollo, p. 57.
24 Records, pp. 31-35.
25 Per Eduardo Munarriz, TSN, October 18, 1993, pp. 72-75, only the account of Chan was reported to FEBTC; per Irene Tan, TSN, October 10, 1994, pp. 21-22, the fraudulent withdrawals from Chan’s account were the only bug-related problem received at FEBTC’s Ongpin branch.
26 TSN, May 18, 1994, pp. 11-14.
27 TSN, March 31, 1993, pp. 26-29.
28 Id. at 29-30.