Metrobank v Chiok

Metropolitan Bank and Trust Company, vs. Wilfred N. Chiok. G.R. No. 17!" Bank of the #hilippine $slands, vs. Wilfred N. Chiok. G.R. No. 17"%& Glo'al Business Bank, $n(., vs. Wilfred N. Chiok. G.R. No. 17"%)*. Novem'er !, &1* Leonardo-De + Castro, J.:

o(trine-Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfillment of the other. When Nuguid failed to deliver the agreed amount to Chiok, the latter had a cause of action against Nuguid to ask for the rescission of their contract. On the other hand, Chiok did not have a cause of action against etrobank and !lobal "ank that would allow him to rescind the contracts of sale of the manager#s or cashier$s checks, which would have resulted in the crediting of the amounts thereof back to his accounts. Otherwise stated, the right of rescission under %rticle &&'& of the civil code can only be e(ercised in accordance with the principle of relativity of contracts under %rticle &)&& of the same code. Clearing should not be confused with acceptance. anager#s and cashier#s checks are still the sub*ect of clearing to ensure that the same have not been materially altered or otherwise completely counterfeited. +owever, manager#s and cashier#s checks are preaccepted by the mere issuance thereof by the bank, which is both its drawer and drawee. Thus, while manager#s and cashier#s checks are still sub*ect to clearing, they cannot be countermanded for being drawn against a closed account, for being drawn against insufficient funds, or for similar reasons such as a condition not appearing on the face of the check. -ong standing and accepted banking practices do not countenance the countermanding of manager#s and cashier#s checks on the basis of a mere allegation of failure of the payee to comply with its obligations towards the purchaser. On the contrary, the accepted banking practice is that such checks are as good as cash. +owever, in view of the peculiar circumstances of the case at bench, We are constrained to set aside the foregoing concepts and principles in favor of the e(ercise of the right to rescind a contract upon the failure of consideration thereof. a(tsRespondent Wilfred N. Chiok Chiok/ had been engaged in dollar trading for several years. +e usually buys dollars from !on0alo ". Nuguid Nuguid/ at the e(change rate prevailing on the date of the sale. Chiok pays Nuguid either in cash or manager#s check, to be picked up by the latter or deposited

in the latter#s bank account. Nuguid delivers the dollars either on the same day or on a later date as may be agreed upon between them, up to a week later. Chiok and Nuguid had been dealing in this manner for about si( to eight years, with their transactions running into millions of pesos. 1or this purpose, Chiok maintained accounts with petitioners etrobank and !lobal "ank the latter being then referred to as %sian "ank. Chiok likewise entered into a "ills 2urchase -ine %greement "2-%/ with %sian "ank. 3nder the "2-%, checks drawn in favor of, or negotiated to, Chiok may be purchased by %sian "ank. 3pon such purchase, Chiok receives a discounted cash e4uivalent of the amount of the check earlier than the normal clearing period. On 5uly 6, &''6, pursuant to the "2-%, %sian "ank 7bills purchased8 9ecurity "ank : Trust Company 9"TC/ anager#s Check C/ No. ;) in the amount of 2?6,6;;,;;;.;; issued in the name of Chiok, and credited the same amount to the latter#s 9avings %ccount.On the same day, %sian "ank issued manager#s checks with a total value of2&@,>66,)6;.;; were issued to !on0alo "ernardo, who is the same person as !on0alo ". Nuguid pursuant to Chiok#s instruction and were debited from his account. -ikewise upon Chiok#s application, etrobank issued Cashier#s Check CC/ No. ;;))@; in the amount of 2