National Waterworks & Sewerage Authority v. Reyes
REITERATIONFacts
The Antecedents: The National Waterworks & Sewerage Authority (NAWASA) published an advertisement for bids for the supply of steel pipes for its waterworks projects. C & C Commercial Corporation (C&C) filed a complaint, alleging that the exclusion of asbestos cement pressure pipes, which it manufactures, violated Republic Act 912 and would cause prejudice. C&C sought a preliminary injunction to prevent NAWASA from proceeding with the bidding and to compel NAWASA to include its products in a new bidding. Procedural History: The Court of First Instance of Rizal issued a preliminary injunction restraining NAWASA from proceeding with the bidding. NAWASA filed an original action for certiorari and prohibition with the Supreme Court, seeking to set aside the injunction. The Petition: NAWASA assails the legality of the restraining order on grounds of lack of jurisdiction of the court a quo to issue the injunctive writ against NAWASA when the offices and bidding are outside its territorial jurisdiction, failure to state a cause of action, and disqualification of C&C to participate in public biddings under Administrative Order No. 66.
Issue(s)
Whether the Court of First Instance of Rizal has jurisdiction to issue a writ of preliminary injunction that will be enforced outside its territorial boundaries. Whether C & C Commercial Corporation has a valid cause of action for exclusion of its asbestos cement pressure pipes from the bidding under Republic Act 912. Whether C & C Commercial Corporation is disqualified from participating in public biddings under Administrative Order No. 66.
Ruling
The Supreme Court granted the petition and set aside the writ of preliminary injunction issued by the respondent judge. The Court ruled that the injunction was null and void for want of jurisdiction. The Court also found that C & C Commercial Corporation failed to establish a cause of action under Republic Act 912 and was disqualified under Administrative Order No. 66.
Ratio Decidendi
On the issue of jurisdiction: The Court held that a court of first instance cannot issue a writ of preliminary injunction which will be enforced outside the territorial boundaries of said court. This is based on Section 44(n) of the Judiciary Act, as amended, which grants such courts the power to issue writs of injunction in their respective provinces and districts. The preliminary injunction that may be granted by a court of first instance is co-extensive with the territorial boundaries of the province or district in which the said court sits. Therefore, the writ issued by the respondent judge of the Court of First Instance of Rizal, which purports to restrain acts of NAWASA outside of its province or district, is null and void for want of jurisdiction. This principle was reiterated from previous rulings of the Court. On the cause of action under Republic Act 912: The Court found that C & C Commercial Corporation's complaint failed to state a cause of action because it did not allege or show that it had secured the required certification from the Director of Public Works as to the "availability, practicability, usability and durability" of its asbestos cement pressure pipes. This certification is a mandatory requirement under Republic Act 912 for claiming preference for locally manufactured products. The Court noted that this certification was not produced even before the Supreme Court, leading to the conclusion that it does not exist. Statutes granting advantages to private persons are strictly construed, and rights arising therefrom only come into being after strict compliance with all statutory conditions. The failure of C & C to prove compliance with the certification requirement was fatal to its claim. On the disqualification under Administrative Order No. 66: The Court upheld the disqualification of C & C Commercial Corporation from participating in public biddings based on Administrative Order No. 66. This order disqualifies any person or entity with pending cases involving non-payment of tax, duty, or undertaking with the government. The petition alleged that C & C had tremendous tax liabilities and pending cases, which was not traversed by the private respondent. The Court also dismissed C & C's challenge to the constitutionality of Administrative Order No. 66, stating that the constitutionality of a law or executive order may not be collaterally attacked and they are deemed valid unless declared null and void by a competent court.
Main Doctrine
A court of first instance cannot issue a writ of preliminary injunction that will be enforced outside the territorial boundaries of its province or district, as such writ is null and void for want of jurisdiction. Furthermore, a party claiming preference under Republic Act 912 must possess the required certification from the Director of Public Works, and failure to do so is fatal to their cause of action. Disqualification under Administrative Order No. 66 is also a valid ground to prevent participation in public biddings.