Cui v. Arellano University (Case Digest) G.R. No. L-15127

Cui v. Arellano University
G.R. No. L-15127
May 30, 1961

EMETERIO CUI, plaintiff-appellant,
vs.
ARELLANO UNIVERSITY, defendant-appellee

Facts:
Emeterio Cui was a law student in Arellano University from the school year 1948-1949 up to and including the first semester of his fourth year. During his stay there, Cui received a scholarship from the university for scholastic merit. Before Arellano University gave Cui the scholarship, however, the former was made to sign the following:

“In consideration of the scholarship granted to me by the University, I hereby waive my right to transfer to another school without having refunded to the University the equivalent of my scholarship cash.”

On August 16, 1949, the Director of Private Schools issued Memorandum No. 38, stating that scholarships given to students for excellence in scholarship or for leadership in extra-curricular activities should be given because of the merits of said students and not merely to keep them in the school.

Francisco Capistrano, the brother of Cui’s mother, was the dean of the college of law of Arellano University, but on Cui’s last semester in law school, Capistrano transferred to the College of Law of Abad Santos University. Wishing to follow his uncle, Cui left Arellano and enrolled in Abad Santos University. When he was about to take the bar exam, Cui needed the transcripts from Arellano, but the latter would not give it to him unless he paid the sum Php1,033.87, the amount he got as scholarship during his enrolment there. Cui had no choice but to pay the same so he could take the bar exam but has since then petitioned the court for the reimbursement of the said amount.

Issue:
Was the provision of the contract between Cui and Arellano University waiving the former’s right to transfer to another school valid?

Ruling:
No. The contract was “repugnant to sound morality and civic honesty.” In Gabriel v. Monte de Piedad, the Court said that “in order to declare a contract void as against public policy, a court must find that the contract as to consideration or the thing to be done contravenes some established interest of society or is inconsistent with sound policy and good morals.” The policy given by Memorandum No. 38 is a sound policy and therefore should be followed by Arellano University.