C & C Commercial Corporation v. National Waterworks and Sewerage Authority
REITERATIONFacts
The Antecedents: C & C Commercial Corporation (appellee) filed a petition for declaratory relief, later converted to an action for prohibition with preliminary injunction, against the National Waterworks and Sewerage Authority (NAWASA, appellant). The core issue was whether NAWASA violated Republic Act 912 by calling for bids for steel pipes for waterworks projects in Manila, Davao, and Iloilo, instead of preferring locally manufactured asbestos cement pressure pipes offered by C & C Commercial Corporation. Procedural History: The Court of First Instance of Manila initially dismissed the complaint regarding the San Pablo Waterworks System and dissolved the injunction. Subsequently, it issued preliminary injunctions restraining NAWASA from proceeding with bids for Davao, Iloilo, and Manila projects. After trial, the lower court rendered a decision making the injunctions permanent, ordering reappraisal of bids, new biddings, and specifying asbestos cement pipes for the Manila project, finding NAWASA's actions violated Republic Act 912. The Petition: NAWASA appealed the decision, contending that Republic Act 912, which mandates the use of Philippine-made materials in government construction or repair work, does not apply to it as it is not a municipal corporation or a direct arm of the State. It also argued that locally produced asbestos cement pipes were not available in the sizes required for the projects at the time of the calls for bids.
Issue(s)
Whether NAWASA, as a government-owned and controlled corporation, is included within the term "Government" as contemplated by Republic Act 912. Whether NAWASA violated Republic Act 912 by specifying steel pipes instead of locally produced asbestos cement pressure pipes for its waterworks projects. Whether the availability, practicability, and usability of locally produced materials, as required by Republic Act 912, must be certified by the Director of Public Works prior to the call for bids.
Ruling
The Supreme Court set aside the decision of the lower court, declared the writs of preliminary injunction null and void, and ordered the payment of costs against the appellee. The Court ruled that NAWASA is included within the term "Government" under Republic Act 912, but found that NAWASA did not violate the law because locally produced asbestos cement pipes in the sizes required (18 to 42 inches) were not available at the time of the calls for bids. The Court also noted that the Interim Project for Manila and suburbs had become moot due to Republic Act 4858.
Ratio Decidendi
On whether NAWASA is included within the term "Government" under Republic Act 912: The Court held that NAWASA, as a government-owned or controlled corporation, is embraced within the term "Government" as used in Republic Act 912. The Court reasoned that while Section 2 of the Revised Administrative Code defines "Government" in a specific sense, Republic Act 912 uses the term in a broader, implied sense, consistent with the nationalistic policy of giving preference to locally produced materials. This interpretation is supported by comparing Republic Act 912 with Commonwealth Act 138 (the "Flag Law"), which also aims to promote domestic industries and expressly includes government-owned companies. Both statutes share the same nationalistic purpose, and thus should be construed together to give effect to the expressed national policy of economic self-sufficiency. On whether NAWASA violated Republic Act 912 by specifying steel pipes: The Court found that NAWASA did not violate Republic Act 912. The evidence indubitably showed that at the time of the calls for bids for the Davao and Iloilo projects, C & C Commercial Corporation, the local manufacturer, could only produce asbestos cement pressure pipes up to 12 inches in diameter. For the Manila project, while Eternit Corporation could produce up to 24-inch non-pressure pipes, C & C Commercial Corporation's president admitted that their largest mandril was 16 inches and that pipes larger than 12 inches supplied previously were imported. Therefore, locally produced asbestos pipes above 12 inches in diameter were not available in the sizes required by NAWASA for these projects, negating the claim of discrimination. On the requirement of certification for availability, practicability, and usability: The Court emphasized that the preference granted by Republic Act 912 is contingent upon the certification of availability, practicability, and usability of locally produced materials by the Director of Public Works. The evidence showed that C & C Commercial Corporation failed to produce such certification at the time the calls for bids were made. While the appellee later secured a certification, it pertained to pipes up to 12 inches, which were already being produced and used. The Court rejected the notion that a manufacturer's promise to procure new equipment or import materials could establish "availability" under the law, as this would be a strained interpretation and unfair to require certification before machinery is even acquired and installed.
Main Doctrine
The National Waterworks and Sewerage Authority (NAWASA), as a government-owned or controlled corporation, is embraced within the term "Government" as used in Republic Act 912, and must give preference to locally produced materials when available, practicable, and usable in its construction or repair projects. However, this preference is contingent upon the actual availability of such local materials in the required sizes and specifications, and the certification of their availability, practicability, and usability by the Director of Public Works.