MERRIAM SCHOOL AND OFFICE SUPPLIES CORPORATION AND WEBSTER SCHOOL AND OFFICE SUPPLIES, INC., PETITIONER-APPELLANTS, VS. COURT OF APPEALS AND NATIONAL BOOK STORE, INC., RESPONDEN…

Merriam School and Office Supplies versus National Book Store

The Case

This is a petition brought by Merriam School and Office Supplies Corporation and Webster School and Office Supplies, Incorporated against National Book Store, Incorporated, arising from a complaint for injunction and damages grounded on the alleged infringement of a right to reprint a foreign book under Presidential Decree Number 285, as amended by Presidential Decree Number 400. The petitioners sought to stop the case at the threshold, insisting that the power to resolve the dispute belonged exclusively to the Reprinting Committee and not to the regular courts. The case matters because it fixes the boundary between administrative and judicial competence over reprinting rights, and because it teaches that a party need not exhaust administrative remedies when the administrative body itself has already declared that it has no jurisdiction.

Procedural History

National Book Store filed its complaint for injunction and damages in the Court of First Instance of Manila. The Merriam and Webster firms moved to dismiss on the ground that jurisdiction over conflicts arising under the reprinting decrees is vested exclusively in the Reprinting Committee, whose decision is appealable to the Office of the President, and that National Book Store had failed to exhaust its administrative remedies. The trial court denied the motion to dismiss.

The Merriam and Webster firms then assailed that denial in a petition for certiorari before the Court of Appeals. The Court of Appeals dismissed the petition, holding that certiorari was not the proper remedy and that the correct recourse was an ordinary appeal in due course after trial on the merits. The firms appealed that ruling to the Supreme Court, which gave due course to the appeal because the jurisdictional question raised was one of first impression.

Facts

On April 30, 1975 and again on November 25, 1976, the Reprinting Committee awarded to National Book Store the right to reprint the book entitled The Head Nurse: Her Leadership Role, written by Barrett, Gessner and Phelps and published in the United States by Appleton-Century-Crofts.

In May 1975, according to National Book Store, Merriam School and Office Supplies Corporation violated that reprinting right by printing two thousand copies of the book, and, in concert with Webster School and Office Supplies, Incorporated, sold and distributed the reprinted copies. National Book Store prayed for an injunction against further printing and selling, and for damages totalling one hundred fifty-one thousand pesos.

It appears that National Book Store had earlier complained to the Reprinting Committee about the supposed violation of the decree by the Merriam and Webster firms. Acting through its staff attorney in a letter dated October 19, 1976, the Committee informed National Book Store that the complaint was not the conflict or claim contemplated in Section 4 and was therefore outside the Committee's jurisdiction. The Committee reasoned that the cases contemplated by that section involve conflicting claims or rights between parties which must be resolved to determine who has the better right, and that no such conflict existed here because National Book Store was the duly authorized reprint entity while the Merriam and Webster firms had been granted no reprinting right. The Committee further observed that the case involved an alleged violation of the decree, which carries penal sanctions, and that the Committee had no authority to impose those penalties or to assess and award damages. It advised that the complaint be filed with the City Fiscal's Office. The Merriam firm had in fact applied in March 1975 to reprint the book, but it was never awarded any authorization.

Issues

• Whether or not the Court of First Instance has jurisdiction to entertain an action for injunction and damages involving an alleged infringement of the right to reprint a foreign book under Presidential Decree Number 285, as amended by Presidential Decree Number 400.
• Whether or not National Book Store failed to exhaust its administrative remedies before filing suit.

Applicable Provisions

Section 4 of Presidential Decree Number 400 provides:

Any conflict or claim arising out of the provisions of this Decree shall be decided by the (Reprinting) Committee mentioned in Section 1 hereof. An order or decision of said Committee shall become final after fifteen (15) days following the receipt by the party concerned of such order or decision, unless in the meantime an appeal therefrom to the Office of the President has been taken by the aggrieved party. The Office of the President shall decide the appealed case within ten (10) days after the filing of the appeal.

This provision defines the Committee's adjudicatory power over conflicts and claims, and the petitioners invoked it as the source of an exclusive jurisdiction that would bar the courts.

Ruling

On the first issue, the Court held that the Court of First Instance has jurisdiction over the case. The Court respected the ruling of the Reprinting Committee that it has no jurisdiction over the case, and found no justification for the courts to substitute their opinion for that of the Committee. Implicit in the Committee's ruling, the Court noted, is the assumption that the Merriam and Webster firms are infringers of the right to reprint the book exclusively awarded to National Book Store, and are not awardees of any reprinting right. The cause of action of National Book Store is predicated on the infringement of that right. The Committee itself had explained that the cases contemplated by Section 4 are those involving conflicting claims or rights between parties which have to be resolved to determine which has a better right, and that no such conflict existed here.

On the second issue, the Court held that there is no merit in the contention that National Book Store did not exhaust its administrative remedies. The doctrine of exhaustion of administrative remedies presupposes an administrative body with authority to act. Where the Committee had already declared that it had no jurisdiction and had advised that the complaint be filed with the City Fiscal's Office, there was no administrative remedy left to exhaust.

Doctrine

First, jurisdiction over a conflict or claim arising under Presidential Decree Number 285, as amended, belongs to the Reprinting Committee only when there are conflicting claims or rights between parties which the Committee must resolve to determine who has the better right. Where one party holds the reprinting award and the other holds none, there is no such conflict, and an action for injunction and damages for infringement lies in the regular courts.

Second, the doctrine of exhaustion of administrative remedies does not apply where the administrative body has itself ruled that it has no jurisdiction over the matter. A party is not required to seek relief from an agency that has already disclaimed the power to grant it.

Third, the Committee's determination of its own lack of jurisdiction should be respected, and the courts should not substitute their opinion for that of the Committee on that point.

Disposition

The appeal was dismissed, and both the trial court's order denying the motion to dismiss and the decision of the Court of Appeals were affirmed, with costs against the petitioners.

Remember This

The line worth memorizing is that exhaustion of administrative remedies is not required where the administrative body itself has declared that it has no jurisdiction. Examiners use this case to test the limits of the Reprinting Committee's power under the reprinting decrees and the recognized exceptions to the exhaustion doctrine.