G.R. No. 172652 - Metropolitan Bank and Trust Co. vs. Chiok

Wilfred N. Chiok (Chiok) – dollar trader; maintained accounts with Metropolitan Bank and Trust Company (Metrobank) and Asian Banking Corporation (now Global Business Bank, Inc. or Global Bank).
Gonzalo B. Nuguid – supplier of dollars to Chiok under a long‐standing arrangement; deposited proceeds in his account at Far East Bank & Trust Company (FEBTC, now Bank of the Philippine Islands or BPI).
Asian Bank – had a Bills Purchase Line Agreement (BPLA) with Chiok for purchasing checks.

Asian Bank purchased SBTC MC No. 037364 (₱25,500,000) for Chiok and credited his account.
Pursuant to Chiok’s instructions, Asian Bank issued two manager’s checks (Nos. 025935 for ₱7,550,000; 025939 for ₱10,905,350) to Nuguid, debiting Chiok’s account.
Metrobank issued cashier’s check No. 003380 (₱7,613,000) to Nuguid, also debiting Chiok’s account.
Chiok deposited the three checks (total ₱26,068,350) into Nuguid’s FEBTC account; Nuguid failed to deliver US$1,022,288.50 that afternoon.

July 6, 1995 – Chiok filed a complaint and secured an ex parte TRO/preliminary injunction against Nuguid, Asian Bank, and Metrobank to stop payment on the checks.
Banks initially complied; FEBTC allowed Nuguid to withdraw proceeds on July 5, 1995. FEBTC filed an arbitration claim against Asian Bank, which was refused jurisdiction.
July 25, 1995 – RTC issued preliminary prohibitory injunction upon Chiok’s bond; permanent injunction later after bond posting.
October 18, 1995 – FEBTC intervened, claiming direct obligation of Asian Bank.
August 29, 2002 – RTC rendered decision: confirmed injunction; ordered Global Bank and Metrobank to refund Chiok with interest and attorney’s fees; dismissed BPI’s intervention.
Appeals – CA (May 5, 2006) affirmed with modifications: rescinded Chiok–Nuguid contract; canceled checks; ordered banks to credit Chiok’s accounts with principal plus reduced interest; sustained dismissal of BPI.
May 28, 2013 – Metrobank, Global Bank, and Chiok jointly moved to dismiss proceedings as settled; BPI opposed.
Supreme Court consolidated petitions by Metrobank, BPI, and Global Bank for review.

Whether a purchaser of a manager’s or cashier’s check may stop payment by court order due to alleged breach of contract by the payee (absence of consideration).
Whether rescission under Civil Code Art. 1191 can apply against banks that issued and pre-accepted such checks.
Whether the banks had knowledge of facts defeating the payee’s title to the checks.
Whether Metrobank erred in paying the cashier’s check in defiance of the TRO.
Whether BPI, as intervenor/collecting bank, may recover from Global Bank absent indorsement and holder-in-due-course status.