Cui vs. Arellano University G.R. No. 15172 May 30, 1961

Emeterio Cui vs. Arellano University
G.R. No. 15172
May 30, 1961

FACTS: Before the school year 1948-1949 Emeterio Cui took up preparatory law course in the Arellano University. After Finishing his preparatory law course plaintiff enrolled in the College of Law of the defendant from school year 1948-1949. Plaintiff finished his law studies in the defendant university up to and including the first semester of the fourt year. During all the school years in which plaintiff was studying law in defendant law college, Francisco R. Capistrano, brother of mother of plaintiff, was the dean of college of law and legal counsel of the defendant university. Plaintiff enrolled for last semester of his law studies in the defendant university but failed to pay tuition fees because his uncle Dean Francisco R. Capistrano, having severed his connection with defendant and having accepted the deanship and chancellorship of the college of law of the Abad Santos University graduating from the college of law of the latter university. Plaintiff, during all the time he has studying law in Defendant University was awarded scholarship grants, for scholastic merit, so that his semestral tuition fees were retured to him after the end of semester and when his scholarship grants were awarded to him. The whole amount of tuition fess paid by the plaintiff to defendant and refunded to him by the latter from the first semester up to and including the first semester of his last year in college of law or the fourth year, is in total P1,003.87. After Graduating in law from Abad Santos University he applied to take the bar examination. To secure permission to take the bar, he needed the transcript of his records in defendant Arellano University. Plaintiff petitioned the latter to issue to him the needed transcripts. The defendant refused until after he paid back the P1,003.87 which defendant refunded him. As he could not take the bar examination without those transcripts, plaintiff paid to defendant the said sum under protest.

ISSUE: Whether the provision of the contract between plaintiff and defendant, whereby the former waived his right to transfer to another school without refunding to the latter the equivalent of his scholarship in cash, is valid or not.

HELD: Memorandum No. 38 issued by the Director of Private Schools provides that “When students are given full or partial scholarship, it is understood that such scholarship are merited and earned. The amount in tuition and other fees corresponding to These scholarship should not be subsequently charged to recipient students when they decide to quit school or to transfer to another institution. Scholarship should not be offered merely to attract and keep students in a school.

Memorandum No. 38 merely incorporates a sound principle of public policy. The defendant uses the scholarship as a business scheme designed to increase the business potential of an education institution. Thus conceived it is not only inconsistent with sound policy but also good morals. The practice of awarding scholarship to attract students and keep them in school is not Good custom nor has it received some kind of social and practical confirmation except in some private institution as in Arellano University.
Wherefore, the decision appealed from is hereby reversed and another one shall be entered sentencing the defendant to pay the plaintiff the sum of P1,033.87, with interest thereon at the legal rate from September 1, 1954, date of the institution of this case, as well as the costs, and dismissing the defendant’s counterclaim. It is so ordered.