G.R. No. L-48413 June 30, 1980
Merriam School and Office Supplies Corporation and Webster School and Office Supplies, Inc., petitioners-appellants, vs. Court of Appeals and National Book Store, Inc., respondents-appellees.

FACTS

National Book Store, Inc. (NBS) filed a complaint in the Court of First Instance of Manila against Merriam School and Office Supplies Corporation and Webster School and Office Supplies, Inc. NBS alleged that the Reprinting Committee, under Presidential Decree No. 285, as amended, had awarded it the exclusive right to reprint the book “The Head Nurse: Her Leadership Role.” It further claimed that the petitioners, without any authorization, had printed and distributed copies of the same book, thereby infringing on its exclusive reprinting right. NBS sought an injunction to stop the printing and sale, and demanded payment of damages.
The petitioners moved to dismiss the complaint, arguing that jurisdiction over conflicts arising under P.D. No. 285 and its amendatory P.D. No. 400 was vested exclusively in the Reprinting Committee, with appeals going to the Office of the President. They contended that NBS failed to exhaust this administrative remedy before resorting to court. The lower court denied the motion to dismiss, a decision the Court of Appeals later upheld, prompting the petitioners’ appeal to the Supreme Court.

ISSUE

Whether the Court of First Instance had jurisdiction over NBS’s action for injunction and damages for alleged infringement of an exclusive reprinting right granted under P.D. No. 285, as amended, or whether such conflict fell under the exclusive jurisdiction of the Reprinting Committee.

RULING

The Supreme Court ruled that the Court of First Instance properly had jurisdiction. The legal logic centered on the proper interpretation of Section 4 of P.D. No. 400, which grants the Reprinting Committee authority to decide “any conflict or claim arising out of the provisions of this decree.” The Court gave decisive weight to the Reprinting Committee’s own interpretation of its jurisdiction. In a prior letter addressing NBS’s complaint against the petitioners, the Committee explicitly stated that the provision covers conflicts between parties both claiming a reprinting right that the Committee must adjudicate. In this case, the Committee’s records showed that only NBS was the duly authorized awardee; the petitioners held no such grant. Therefore, no “conflict or claim” between two rights-claimants existed for the Committee to resolve.
Instead, the Committee characterized the case as an alleged violation of the decree—specifically, unauthorized reprinting—which involved the imposition of penal sanctions and the assessment of damages. The Committee correctly noted it lacked authority to impose penalties or award damages. Consequently, it referred the matter to the regular courts. The Supreme Court affirmed this interpretation, holding that the Committee’s ruling on its own jurisdictional limits was entitled to respect. Since the cause of action was based on the infringement of a vested right and sought remedies beyond the Committee’s powers, the exhaustion of administrative remedies doctrine did not apply, and the trial court correctly assumed jurisdiction. The appealed decisions were affirmed.