TAN BENG, OWNER AND MANAGER OF NEW YORK GROCERY, PETITIONER-APPELLANT, VS. THE CITY SHERIFF OF MANILA, JOSE NALDO, JULIANO E. ESTELLA, AND DOMINADOR TOMAS, RESPONDENTS-APPELLEES.

Tan Beng versus City Sheriff of Manila

The Case

This is an appeal by Tan Beng, owner and manager of the New York Grocery, from a judgment of the Court of First Instance of Manila dismissing his second special civil action for certiorari and prohibition. Tan Beng sought to stop the City Sheriff of Manila from enforcing a writ of execution that had issued to satisfy the money claims of his employee, Dominador Tomas, which had been awarded by the then Regional Office No. 3 of the Department of Labor. The case matters because it gathers in one decision three enduring lessons: that a motion for reconsideration cures the defect of evidence received ex parte, that the validity of a reorganization plan cannot be attacked collaterally in a proceeding where it was never squarely raised, and that acts done under a presumed-valid executive measure must be reckoned with even after that measure is later struck down.

Procedural History

The controversy began in the Regional Office No. 3 of the Department of Labor, which ruled in favor of the claimant Dominador Tomas for overtime pay, underpayment, and pay for work on Sundays and legal holidays. Tan Beng moved for reconsideration; the motion was denied, and only then was a writ of execution issued. Tan Beng then went to the Court of First Instance of Manila on a petition for certiorari and prohibition, raising the validity of Reorganization Plan No. 20-A in relation to Republic Act No. 997. The lower court upheld the plan as constitutional. Tan Beng elevated the matter to the Supreme Court by certiorari and prohibition, but that petition was dismissed on the ground that appeal was the proper remedy.

Tan Beng then filed a second action for certiorari and prohibition in the Court of First Instance of Manila, this time alleging that Regional Office No. 3 had violated procedural due process because the evidence against him was presented ex parte. Dominador Tomas moved to dismiss on the ground of res judicata; the motion did not prosper, but after trial the lower court dismissed the petition precisely on the ground that whatever cause of action Tan Beng might have had was barred by the earlier judgment sustaining the claim, which had become final and executory. Tan Beng appealed to the Court of Appeals, which certified the appeal to the Supreme Court because only questions of law were raised.

Facts

Dominador Tomas filed money claims against the New York Grocery before the Regional Office No. 3 of the Department of Labor, seeking overtime pay, underpayment, and compensation for work rendered on Sundays and legal holidays. Tan Beng was notified of the hearing date, but his counsel filed a motion for postponement. The hearing proceeded, and the evidence for the claimant was received ex parte. The Regional Office ruled for Tomas. Tan Beng moved for reconsideration, and when that was denied, a writ of execution issued.

Tan Beng resisted through a series of court actions. He first questioned the authority of the regional office by attacking the validity of Reorganization Plan No. 20-A, but the Court of First Instance upheld the plan, and his petition to the Supreme Court was dismissed for having chosen the wrong remedy. He then filed a second petition for certiorari and prohibition, this time on procedural due process grounds. After trial, the lower court dismissed it, holding that the earlier judgment had already settled the claim and had become final and executory.

On appeal, Tan Beng insisted that the ex parte reception of evidence deprived him of due process, that the reorganization plan was invalid, and that he had in fact already paid the claim. The Supreme Court found none of these persuasive.

Issues

• Whether or not the reception of evidence ex parte by Regional Office No. 3, followed by a denial of the motion for reconsideration, amounted to a denial of procedural due process.
• Whether or not the validity of Reorganization Plan No. 20-A could still be put in issue in the second petition for certiorari and prohibition.
• Whether or not the actuations of Regional Office No. 3 could simply be disregarded as having no legal effect on the assumption that the plan was invalid.
• Whether or not the claim of previous payment could defeat the final judgment in favor of the claimant.

Applicable Provisions

The decision does not quote a statute; it applies the settled rule on the curative effect of a motion for reconsideration, which the Court states as follows:

Whatever deficiency could be imputed to the assailed decision, one rendered after petitioner was notified of the date of hearing, although his counsel filed a motion for postponement, thus resulting in the evidence presented ex parte, was cured by the motion for reconsideration.

This rule disposes of the due process objection, because Tan Beng himself admitted that he had moved for reconsideration and that it was denied before execution issued.

On the effect of an invalid act before its nullification, the Court adopts the qualification laid down in Serrano de Agbayani versus Philippine National Bank:

It does not admit of doubt that prior to the declaration of nullity, such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect.

This bears on the case because even assuming the reorganization plan was invalid, the proceedings taken under it while it was presumed valid could not simply be erased.

Ruling

On the first issue, the Court held that there was no denial of procedural due process. Tan Beng was notified of the hearing; his counsel sought postponement; the evidence was received ex parte; but he then filed a motion for reconsideration, which was denied only before execution issued. Any deficiency in the decision was cured by that motion, a rule the Court has applied with an impressive concord of opinion.

On the second issue, the Court held that the validity of Reorganization Plan No. 20-A could not help Tan Beng, because he himself admitted that the question was not concretely raised in this particular proceeding. That omission could be treated as a waiver.

On the third issue, the Court acknowledged the orthodox view that an unconstitutional act confers no rights and affords no protection, but adopted the realistic qualification that prior to a declaration of nullity the challenged act must have been in force and complied with, and its existence as a fact must be reckoned with. The Court reinforced this with the teaching of Francisco versus City of Davao, that the ends of justice are not served by forcing a party to start all over again years after the case began.

On the fourth issue, the Court held that the claim of previous payment was a factual matter that the lower court did not credit, and that the certification of the appeal on questions of law implied that the factual questions had been sufficiently considered.

Doctrine

First, the defect of a decision rendered after evidence was received ex parte, where the party was notified of the hearing, is cured by the filing and denial of a motion for reconsideration. Second, the validity of a reorganization plan or similar executive measure cannot be attacked in a proceeding where the question was never concretely raised; the omission may be treated as a waiver. Third, an unconstitutional act is not a law and confers no rights, but prior to its being nullified it is entitled to obedience and respect, and what was done under it while it was presumed valid must be reckoned with. Fourth, a final and executory judgment bars a subsequent action to relitigate the same claim.

Disposition

The Supreme Court affirmed the decision of the lower court dismissing the special civil action for certiorari and prohibition, with costs against Tan Beng.

Remember This

Memorize this line: a motion for reconsideration cures the defect of an ex parte reception of evidence, and acts done under a presumed-valid measure must be reckoned with even if it is later struck down. Examiners use this case to test the curative effect of a motion for reconsideration and the doctrine on the operative effect of an invalid act before its nullification.