G.R. No. 86819 November 9, 1989
ADAMSON OZANAM EDUCATIONAL INSTITUTION INC., ALSO KNOWN AS ADAMSON UNIVERSITY, petitioner, vs. ADAMSON UNIVERSITY FACULTY AND EMPLOYEES ASSOCIATION AND CONRADO MAGLAYA, COMMISSIONER OF THE NATIONAL LABOR RELATIONS COMMISSION, respondents.

FACTS

Adamson University (AU) was authorized to increase tuition fees for the 1983-84 school year. The Adamson University Faculty and Employees Association (AUFEA) filed a complaint, asserting that under Presidential Decree No. 451, 60% of the incremental proceeds from such increases must be allocated for salary increases of faculty and employees. AU contested this, arguing that P.D. No. 451 had been repealed by the Educational Act of 1982 (B.P. Blg. 232) and, alternatively, that there were no actual incremental proceeds for that school year to which the 60% share could apply. The labor arbiter dismissed the complaint. On appeal, the National Labor Relations Commission (NLRC) reversed the arbiter and ordered AU to remit approximately P1.3 million to AUFEA. AU’s motion for reconsideration was denied by the NLRC as having been filed out of time, prompting AU to elevate the case via certiorari.
The procedural dispute centered on the service of the NLRC’s September 30, 1988 decision. It was served on October 11, 1988, by leaving a copy with a security guard at the TOEFEMI building, where AU’s former counsel, Atty. Andres Narvasa (later appointed to the Supreme Court), had maintained an office. That law office had dissolved following his appointment. The copy was eventually transmitted to AU’s new counsel, who filed a motion for reconsideration on November 15, 1988. The NLRC deemed this motion late, counting the reglementary period from the October 11 service.

ISSUE

The primary issues were: (1) Whether service of the NLRC decision upon a building security guard constituted valid service to commence the reglementary period for filing a motion for reconsideration; and (2) Whether the NLRC correctly ordered AU to allocate 60% of the tuition fee incremental proceeds exclusively to salary increases under P.D. No. 451.

RULING

The Supreme Court granted the petition, reversing the NLRC. On the procedural issue, the Court held the service invalid. Applying Rule 13, Section 4 of the Rules of Court suppletorily, service must be made personally to the party or attorney, or by leaving it at the office with a clerk or a person in charge. A security guard is neither a clerk nor a person in charge of the attorney’s office. Therefore, the service on October 11, 1988, did not start the running of the appeal period. The NLRC should have taken judicial notice of Justice Narvasa’s appointment, which dissolved his law practice.
On the substantive merit, the Court ruled that P.D. No. 451 had been repealed by B.P. Blg. 232 (the Educational Act of 1982), which took effect on September 11, 1982. This Act removed the restrictive allocation under P.D. No. 451, allowing incremental proceeds to be used for various purposes, including those arising from collective bargaining agreements, as detailed in implementing MECS Order No. 25. Following the precedent in Cebu Institute of Technology vs. Ople, the Court held that MECS Order No. 25, being interpretative of B.P. Blg. 232, had retroactive effect to September 11, 1982. Consequently, for the school year 1983-84, AU was not legally obligated to allocate