William Golangco Construction Corporation vs. Philippine Commercial and International Bank

Facts:

William Golangco Construction Corporation (WGCC) was incorporated on May 6, 1963 for a 50-year term. WGCC entered into a construction contract with Philippine Commercial and International Bank (PCIB) (now Banco de Oro Unibank, Inc. (BDO)) on October 20, 1989 to extend the PCIB Tower II, including a granite wash-out exterior finish. WGCC turned over the project on June 1, 1992 and posted a one-year guarantee bond for defects. In 1993 parts of the granite finish peeled; WGCC performed minor repairs but in 1994 PCIB engaged another contractor (Brains and Brawn) to redo the finishing, incurring PHP 11,665,000.00. PCIB sought arbitration with the Construction Industry Arbitration Commission (CIAC) for reimbursement; WGCC counterclaimed PHP 5,777,157.84 for material cost adjustment.

The CIAC awarded PCIB PHP 9,741,829.00 and granted WGCC’s counterclaim of PHP 5,777,157.84. WGCC moved for execution to include 6% legal interest from June 21, 1996. A writ of execution issued on January 22, 2007 for the principal only. The CIAC later amended the writ and ordered PCIB to pay 12% legal interest on the principal from April 27, 2006 until full payment. The CIAC denied WGCC’s motion for reconsideration, prompting WGCC to petition the Court of Appeals (CA). The CA partly granted WGCC’s petition and ordered inclusion of 6% legal interest from June 21, 1996 until full payment. Both parties filed petitions for review to the Supreme Court.

In April 2019 the Supreme Court (Second Division, per J. Caguioa) resolved consolidated petitions in G.R. Nos. 195372 and 195375, directing the CIAC to compute PCIB’s remaining liability and effect payment within thirty days; a later clerical correction fixed the docket numbers, and an Entry of Judgment certified finality on December 27, 2019. BDO, for PCIB, had earlier issued two checks totaling PHP 7,742,974.29 in March 2009.

After finality, WGCC filed a Manifestation with Motion for Computation of Liability and Issuance of a Writ of Execution with the CIAC on August 25, 2022. The CIAC computed the remaining liability, but WGCC then disclosed that it had ceased to exist as a corporation upon expiration of its term on April 6, 2013 and that it had liquidated and distributed assets to its 13 stockholders (and successors-in-interest), providing names and pro rata shares. In an August 11, 2023 Order the CIAC denied BDO’s Motion for Consignation and ordered BDO to post a surety bond and secure executed releases from recipients before payment; the CIAC also provided a breakdown allocating PHP 8,630,646.46 among the listed recipients.

WGCC moved to include legal interest until full payment (citing Lara’s Gifts & Decors, Inc. v. Midtown Industrial Sales, Inc.), arguing that legal interest of 6% per annum must be computed from finality until full satisfaction. The CIAC’s October 19, 2023 Omnibus Order denied WGCC’s motion, reasoning that the Supreme Court’s November 27, 2019 Resolution had fixed interest reckoning from issuance of CIAC’s June 21, 1996 Decision until finality of judgment (December 27, 2019), and that the CIAC could not vary that resolution; the CIAC left open respondent’s option to pursue additional interest claims in court. WGCC filed the present Petition for Review on Certiorari to this Court.

In its pleadings before the Court, WGCC insisted CIAC erred by excluding legal interest until full payment; BDO countered that (a) the Petition’s Verification and Certification Against Forum Shopping were defective (signed by counsel and by an alleged stockholder, Melis...(Pro-only)

Issues:

• Should the Petition be dismissed outright for failure to attach a proper Verification and Certification Against Forum Shopping?
• Does the Construction Industry Arbitration Commission have authority to determine the rightful recipients of a judgment award of a dissolved corporation?
• Was the CIAC’s computation of compensatory interest and legal ...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

• (Pro-only)