G.R. No. L-27275 November 18, 1967
C & C COMMERCIAL CORPORATION, plaintiff-appellee, vs. NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-appellant.

FACTS

The case originated as a petition for declaratory relief regarding the interpretation of Republic Act No. 912 , specifically the term “practicable,” and was later converted into an action for prohibition with preliminary injunction. C & C Commercial Corporation sought to restrain NAWASA from procuring imported steel pipes and centrifugal cast iron pipes for various waterworks projects, alleging violation of RA 912, which mandates preference for Philippine-made materials when available, practicable, usable, and durable, as certified by the Director of Public Works. The projects involved were: (1) the San Pablo Waterworks System (complaint dismissed and became final); (2) the Davao Metropolitan Waterworks, where NAWASA called for bids including steel pipes and recommended award to the lowest bidder for steel pipes; (3) the Iloilo Waterworks System, where NAWASA called for bids for 18-inch steel pipes years earlier and awarded to the lowest bidder; and (4) the Manila and Suburbs Waterworks System, where NAWASA advertised for bids for large-diameter steel pipes. The lower court issued preliminary injunctions against NAWASA’s actions on these projects. After trial, the court ruled in favor of C & C, finding NAWASA violated RA 912, made the injunctions permanent, rescinded awards, and ordered new bids including asbestos cement pipes. NAWASA appealed, arguing, among other things, that RA 912 did not apply to it as it was not part of the “Government” as defined, and that no certification from the Director of Public Works existed as required by the law.

ISSUE

The main issue is whether NAWASA’s call for bids for steel and centrifugal cast iron pipes for its waterworks projects violated the provisions of Republic Act No. 912 .

RULING

The Supreme Court set aside the decision of the lower court. It held that Republic Act No. 912 applies to NAWASA as a government instrumentality. However, the Court ruled that the preference for locally produced materials under RA 912 is contingent upon a prior certification by the Director of Public Works (or his assistants) regarding the availability, practicability, usability, and durability of such local materials. The appellee, C & C Commercial Corporation, failed to prove that such a certification existed or had been issued for its asbestos cement pressure pipes in relation to the specific NAWASA projects. Therefore, no right under RA 912 could be claimed to have been violated. Furthermore, regarding the Manila project, the decision had become moot and academic due to the passage of Republic Act No. 4858 , which authorized the President to allow procurement as an exception to RA 912, and the President had authorized the NAWASA General Manager to purchase necessary pipes via negotiated sales. The writs of preliminary injunction were set aside and declared null and void.