Facts:

The case involves C & C Commercial Corporation as the plaintiff-appellee and the National Waterworks and Sewerage Authority (NAWASA) as the defendant-appellant. The events leading to the case began on July 7, 1965, when C & C Commercial Corporation filed a petition for declaratory relief in the Court of First Instance of Manila. The petition sought a judicial interpretation of the term "practicable" as used in Republic Act No. 912, which mandates the use of locally produced materials in government construction projects. The case evolved into an action for prohibition with a preliminary injunction after C & C alleged that NAWASA was negotiating to purchase imported centrifugally cast iron pipes for the San Pablo Waterworks System, thereby excluding their locally available asbestos cement pressure pipes.

The NAWASA had called for bids for various waterworks projects, including the Davao Metropolitan Waterworks System and the Iloilo Waterworks System, spe...

Facts:

Background of the Case

• The case involves an action for prohibition and subsequent appeal, originally initiated in the Court of First Instance of Manila on July 7, 1965, by C & C Commercial Corporation.
• The controversy arose from the call for bids by the National Waterworks & Sewerage Authority (NAWASA) for supplying pipes for various waterworks projects in Manila and its suburbs, Davao, and Iloilo.
• Republic Act No. 912 mandates that, in government construction or repair work, Philippine-made materials that are available, practicable, and usable must be used, provided certification by the Director of Public Works.

The Alleged Violations

• The plaintiff alleged that NAWASA’s call for bids specifying imported steel and centrifugal cast iron (CCI) pipes violated the law by disregarding the use of locally produced asbestos cement pressure pipes available at the time.
• Three separate supplemental complaints were raised:
• The First Supplemental Complaint pertained to the Davao Metropolitan Waterworks Project, contending that specifying 24‑inch steel pipes overlooked the availability of locally produced asbestos cement pipes.
• The Second Supplemental Complaint concerned the Iloilo Waterworks System, where C & C Commercial Corporation objected to awarding the contract for 18‑inch steel pipes when local products for that size were not available.
• The Third Supplemental Complaint addressed the Manila and Suburbs Waterworks System, where the call for bids for 30‑ to 42‑inch steel pipes was challenged on similar grounds.
• The lower court issued writs of preliminary injunction and later rendered a partial decision:
• It ordered the rescission of awards and the re-bidding or reappraisal of bids in the Davao, Iloilo, and Manila projects.
• The injunctions were aimed to permanently restrain NAWASA from implementing the contracts for steel pipes that were alleged to be imported in violation of RA 912.

Procedural History and Evidence Presented

• The complaint initially sought a judicial interpretation of the term “practicable” in RA 912, later converting the action to one for prohibition.
• NAWASA defended its call for bids arguing:
• Its status as a public corporation distinct from the traditional “Government” or municipal agencies.
• That at the time of the bidding for the Davao, Iloilo, and Manila projects, locally produced asbestos cement pressure pipes were available only in sizes up to 12 inches in diameter.
• Evidence and witness testimony established that:
• C & C Commercial Corporation had only produced asbestos cement pressure pipes up to 12 inches.
• NAWASA’s inspections confirmed that local manufacturers did not possess the capacity to produce pipes in the larger diameters called for in the bids.
• Testimonies by NAWASA’s staff (e.g., Engineer Leopoldo del Rosario) and the president of C & C Commercial Corporation corroborated the limited production capacity and existing records of local production.
• Subsequent certification obtained by the plaintiff from the Director of Public Works was also introduced; however, it was determined that certification came after the relevant bidding processes and did not retroactively satisfy the requirement for “availability” at the time of the bids.

Legislative Context and Related Statutes

• Republic Act No. 912 aims to promote the use of Philippine-made materials in government projects, mirroring the nationalistic intent of the earlier Commonwealth Act No. 138 (the “Flag Law”), which also gave native products preferential treatment.
• The discussion involved interpretation of the term “Government” in RA 912:
• Appellant argued that NAWASA, as a public corporation, is not encompassed by the term “Government.”
• The Court indicated that, in the context of RA 912, the term “Government” should be interpreted in its implied sense to include entities like NAWASA that perform governmental functions.

Issue:

• Whether NAWASA, in calling for bids and specifying the supply of imported steel (and similar) pipes for its waterworks projects, violated the provisions of Republic Act No. 912 by failing to give preference to locally produced materials.
• Whether NAWASA, as a public corporation, is considered to be within the scope of the “Government” for purposes of applying the statutory preference under RA 912.
• Whether the locally produced asbestos cement pressure pipes, claimed by the plaintiff, can be deemed “available, practicable and usable” when they were produced only in sizes up to 12 inches, while the bids required larger diameters.
• Whether subsequent certifications or promises of future production capacity may satisfy the statutory requirement of “availability” under RA 912.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)