NATIONAL WATERWORKS & SEWERAGE AUTHORITY, PETITIONER, VS. HON. ANDRES REYES, PRESIDING JUDGE OF BRANCH VI, CFI, RIZAL; AND C & C COMMERCIAL CORPORATION, RESPONDENTS.

An original action
for certiorari and prohibi­tion filed by the National Waterworks & Sewerage Authority, hereinafter referred to as the NAWASA
against the Honorable Andres
Reyes, presiding judge of Branch
VI, Court of First Instance of Rizal and the C & C Commercial Corporation,
seeking to set aside a preliminary injunction
issued by the said court dated January
18, 1968, in Civil Case No. 10523, which restrained herein petitioner from proceeding with the
calling of bids for the supply of steel pipes intended
for the improvement of its waterworks projects in the City of Manila and its
suburbs.  Herein petitioner assails the legality of the said restraining
order on several grounds:  lack of
jurisdiction of the court a quo to issue the injunctive writ of afore­said against herein
petitioner when, admittedly, the offices for place of business of petitioner
corporation and the bidding enjoined are outside its territorial jurisdiction; the complaint in the lower court
fails to state a cause of action; and
the plaintiff corporation is disqualified to participate in public biddings called for by the NAWASA under
the provisions of Administrative Order No. 66, dated June 27, 1967.

The background facts of
the controversy are as follows:

On December 12, 1967, the
NAWASA caused to be published an advertisement calling for bids for the supply
of steel pipes of 30-inch and 24-inch diameters, intended for the Interim Program of Development of the Distribution System of the Manila and Suburbs Water­works. 
Believing that the said call for bids was prejudicial to its
interest, in the circumstance
that the NAWASA had specifically
and exclusively called for the supply of steel pipes only excluding therefrom the asbestos cement pressure pipes it manufactures,
the C & C Commercial Corporation filed a
complaint against the NAWASA in the court below, alleging that it is a qualified bidder in any bidding of the
Government; that its locally manufactured asbestos cement pipes
are far les expensive and cheaper than any other type, class or kind of pipe locally manufactured; are
available, pro­ven and tested to be
durable and usable and serve as equally well as steel pipes in waterworks
distribution systems; that in the call for bids of the NAWASA in its advertisement
of December 12, 1967, asbestos cement pressure pipes had been excluded in
violation of Repub­lic Act 912; and that said deliberate discrimination against
its products would cause great prejudice to public interest and would cause irreparable damage to both plaintiff
and the Government, if not enjoined
by the court from the
act complained of.  It concluded with a
prayer that a writ of preliminary injunction or restraining order be
issued immediately ex-parte, upon plaintiff’s filling
a sufficient bond, enjoining the NAWASA from opening the bids submitted under
the adver­tisement above-mentioned, and after trial, that judg­ment be rendered:  (1) ordering the NAWASA permanently in desist from proceeding with the conduct of the bid­ding
complained of; (2) ordering the NAWASA to call and advertise another bidding to
include plaintiff’s products; and (3) ordering the NAWASA to pay unto the
plaintiff actual damages, attorney’s fees, and the costs of the suit.

It appears that the
NAWASA, as well as the In­ternational Pipe Industries
Corporation which had been granted leave to intervene in the case, opposed the
application for preliminary injunction, contending, that the complaint states
no cause of action by reason of failure on the part of the plaintiff to allege
or how that it has complied with the requirements of Republic Act 912, i. e., by showing that it has secured a certification from
the Director of Pub­lic Works as to the “availability, practicability,
usability and durability” of its products; that plain­tiff is a
disqualified bidder in any Government pro­ject under the provisions of
administrative Order No. 66 dated
June 26, 1967, by reason of the fact that plaintiff corporation and its
President have tremen­dous tax
liabilities with the Government; that plain­tiff’s plant is not
capable of producing asbestos cement pipes in the sizes called for in the bids,
the largest size of pipe; it is actually producing being up to 12 inches in
diameter  only; that it has actually ceased to be a manufacturer of said
products, having leased its plant together with all the machineries and the land whereon the plant is located, in favor of D. B. Canicosa & Sons
for a period of three (3) years starting
November 20, 1967; that the court has no jurisdiction to issue the writ
prayed for because the NAWASA and the holding of the bidding
sought to be enjoined, are outside its territorial jurisdiction; that the issuance of the injunction would
cause prejudice to public interest for the delay in the completion of the projects wherein the pipes called for in the bid are intended would cause public inconvenience which are natural results of
water shortage; and that plaintiff’s
damage is reparable while teat of
the NAWASA is irreparable.

The application for the
writ of preliminary injunction was set for hearing by trial court on January 15, 1967.  The same was reset for hearing on the following day where the parties were called
in chambers and there discussion ensued relative to the case.  Thereafter, under date of January 18, 1967,
the respondent judge issued the order complained of which, as earlier stated,
ordered the NAWASA to desist from proceeding with the bidding in question.

Acting upon the petition,
this Court resolved to require
the herein respondents to file their answer
not later than February 12, 1968.  Hearing
on the merits was set on February 14, on which date the case was
argued by the respective counsels
for the petitioner and the respondents. 
Petitioner was given two (2) days within which to submit a copy of the
contract of lease over the asbestos cement pressure pipe plant or factory of the respondent C & C
Commer­cial Corporation which
the former claims the latter had
executed in favor of D. B. Canicosa & Sons, to
support herein petitioner’s contention that the said respondent corporation had ceased to be a
manufacturer of asbestos cement pressure pipes; and the C & C Com­mercial Corporation was likewise given two
(2) days within which to submit the necessary certification from the
Bureau of Public Works to sustain its
claim that it has a right to the preference granted to lo­cally manufactured
products under the Flag Laws.  It appears
that the NAWASA has complied with the
order of the Court by submitting copies of the alleged contract of lease
of C & C Commercial Corporation’s
factory for a term of three (3) years, but the said respondent up to now has not filed the
certification from the Bureau of Public Works required of it.

An examination of the
pleadings revealed that the issues raised
in the instant petition are substantially the very same points relied upon by herein petitioner
in the lower court in support of
its opposi­tion to the issuance of the preliminary injunction in
question.  Admittedly the NAWASA has its offices in Manila, and
the bidding sought to be enjoined
is to be conducted in that
city.  Hence, the issue then that needs
to be resolved is:  May a court of first instance issue a writ of preliminary injunction which will be enforced outside the
territorial boundaries of said court?  This was the very same question that was
brought before Us in a very recent case,^[1] and We answered the question in the
negative, thus:

“The power of a court to issue an injunction, which is a
matter of jurisdiction, is one of legislative enactment (Manila Railroad Co. v.
Atty. Gen., 20 Phil. 523) but the manner of its exercise is prescribed by the
Rules of Court.  Thus, the Judiciary Act,
as amended provides:

‘Sec. 44.  Original Jurisdiction.  – Courts of First Instance shall have original
jurisdiction:

x   x
  x   x   x

‘(n)  Said courts and their judges, or any of them, shall have power to issue writs of in­junction,
mandamus, certiorari, prohibition, quo warranto and
habeas corpus in their respect­ive provinces and dis­tricts, in the
manner provided in the Rules of Court.’ [Underscoring Ours.]

“The above provision should not be confused with Sec. 2, Rule 58 of the Revised Rules of Court (Sec. 2, Rule 60 of the old Rules)
which reads as follows:

‘SEC. 2.  Who
may grant preliminary injunction.  – A prelimi­nary injunction may be
granted by the judge of any court in which the action is pending, or by a
Justice of the Court of Appeals or of the Supreme Court.  It may also be granted by the judge of
a Court of First Instance in any action pending in an inferior court within his district.’

“The preliminary
Injunction that may be granted by
a court of first
instance under Sec. 2 is, in its application, co-extensive with the ter­ritorial
boundaries of the province or district in which the said court sits. 
(Acosta v. Alvendia, et al., L­14598, Oct. 31, 1960; Alhambra Cigar
& Cigarette Manufacturing Co., Inc. v. National Administrator of
Regional Office No. 2, etc., et al., L­20491, Aug. 31, 1965; Peo et al. v. Mencias, L-19633,
Nov. 28, 1966)”

Upon
the facts of this case, and in the light of autho­rity above-quoted, there can
be no doubt that the writ of preliminary injunction issued by the respondent
judge of the Court of First Instance of Rizal which
purports to restrain acts of herein petitioner outside of the territorial
limits of its province or district is null and void, for want of
jurisdiction.

Herein private respondent claims that the call
for bids of the NAWASA is in violation of Republic Act 912 which grants preference right to locally manufact­ured
products.  An examination of the
complaint filed in the lower court, however, would show that it does not
contain any allegation that it
possesses the necessary certification as to the “availability, practicability, usability and, durability” of the asbestos cement pressure pipes manufactured by it from the director of
Public Works pursuant to the requirement of said Act.  Now was the said certification produced
before Us in this proceeding as required in the
resolution of this Court of February 14, 1968. 
It is safe to conclude under the circumstances that it does not
have such cer­tification.  This is fatal to herein private respondents cause of action in the lower court, and sustains
the claim of herein petitioner that the C & C Commercial Corporation is
not entitled to the benefits of Republic Act 912.  We
have clearly passed upon this
point in a former case,^[2] involving the same parties herein, and for
pronouncement there should apply with equal force here.

“Statutes granting advantages to private persons have in many
instan­ces created special privileges or monopolies for the grantees and thus
have been viewed with suspicion and strictly construed.  This is altoge­ther appropriate in the
majority of situations for if public advantage is gained by the grant it
normally appears to be of secondary significance compared with the advantage
gained by the grantee.  (Sutherland
Statutory Construction, Vol, II, Section 3404, p.
240) And rights which exist only
by virtue of such statutes come into being only after strict compliance with
all the conditions found in those statutes. 
(Id., Vol. III, Sec. 5812, p. 94) These rules should apply to the case
at bar where the law invoked grants a preference to locally produced products
or materials.  Since Republic Act 912
grants preference only upon the certification of availability, practicability
and usability of locally produced materials by the Director of Public Works,
that certification must be existing and effective
before any right arising therefrom may be claimed to have been
violated.  Notwithstanding the clear
nationalistic policy of the law aforementioned, We can­not,
by any mistaken sympathy towards herein appellee,
recognize the existence of its right
under the law alleged to have been
violated which the C & C Commercial Corporation has mis­erably failed to
prove in this case.”

Furthermore, the private
respondent is disqualified to participate
in public biddings by virtue of Administrative Order No. 66 issued by the President of the Philippines on June 26, 1967:

“ADMINISTRATIVE
ORDER NO. 66″

DISQUALIFYING ANY PERSON, NATURAL OR JURIDICAL, WITH PENDING CASE WITH
THE BUREAU OF INTERNAL REVENUE OR
BUREAU OF CUSTOMS OR CRIMINAL OR CIVIL CASE AGAINST HIM OR IT INVOLVING NONPAYMENT
OF TAX DUTY OR UNDERTAKING WITH THE GOVERNMENT FROM PARTICIPATING IN PUBLIC
BIDDING OR ANY CONTRACT WITH THE GOVERNMENT OR ANY OF ITS BRANCHES,
SUBDIVISIONS OF INSTRUMENTALITIES.”

it appearing
that as alleged in the petition, which is not traversed, the private respondent
has tremendous tax liabilities with the government and for which se­veral cases
have been filed in court against it.

Private respondent, however, assails the constitutionality of
said Administrative Order No. 66 without giving any reason, and considering the
well?settled rule that the constitutionality of a law or executive order may not be collaterally attacked, and
they shall be deemed valid unless declared null and void by a competent court,
the contention deserves no merit.

FOR ALL THE FOREGOING, the writ is granted, and the writ
of preliminary injunction issued by the respondent judge, dated June 18, 1968,
is set aside.  Costs
against private respondent C & C Commercial Cor­poration.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, Zaldivar, Sanchez, and Ruiz Castro, JJ., concur.

Fernando, J., concurs in the
result.

^[1]
Cudiamat,
et al. v. Torres, et al.,
L-24225.

^[2]
See C & C Commercial Corporation v.
NAWASA, L-27275, Nov. 18, 1967.