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Case Digest - Cui v. Arellano University

The plaintiff enrolled in law school at Arellano University and received scholarships that covered his tuition fees. He transferred to a different law school for his final semester. Arellano University refused to provide his transcripts until he repaid the scholarship funds. The court ruled that the contract waiving the plaintiff's right to transfer without repayment was invalid and against public policy based on an existing government memorandum. Scholarships given on merit should not later be charged if a student decides to leave or transfer. The ruling was based on precedent that contracts cannot be prejudicial to public welfare, morality, or honesty.

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Jhonrey Lalaguna
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187 views1 page

Case Digest - Cui v. Arellano University

The plaintiff enrolled in law school at Arellano University and received scholarships that covered his tuition fees. He transferred to a different law school for his final semester. Arellano University refused to provide his transcripts until he repaid the scholarship funds. The court ruled that the contract waiving the plaintiff's right to transfer without repayment was invalid and against public policy based on an existing government memorandum. Scholarships given on merit should not later be charged if a student decides to leave or transfer. The ruling was based on precedent that contracts cannot be prejudicial to public welfare, morality, or honesty.

Uploaded by

Jhonrey Lalaguna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Cui v.

Arellano University
G.R. No. 164978, 13 October 2005
Carpio, J.:
Plaintiff: Emeterio Cui
Defendant: Arellano University
Nature of the Petition: Issuance of TRO
 
FACTS:
Emeterio Cui enrolled in the defendant Arellano University where plaintiff finished his law
studies in the up to and including the first semester of the fourth year. During all the
school years in which plaintiff was studying law in defendant Law College, he was awarded
scholarship grants and his semestral tuition fees were returned to him after ends of
the semester. Plaintiff left the defendant's law college and enrolled for the last semester of
his fourth year law in the college of law of the Abad Santos University graduating from
the college of law of the latter university. He applied to take the bar examination in which he
needed the transcripts of his records in defendant Arellano University. The defendant refused
until after he had paid back the P1,033 87, noting the contract that he signed which stated that
in consideration of the scholarship granted to him by the University, he waives his right to transfer
to another school without having refunded to the defendant the equivalent of the scholarship cash
and followed by Memorandum No. 38 that the Director of Private Schools issued.
 
ISSUE:

Whether or not the contract between Cui and the respondent university, whereby the former waives
his right to transfer to another school without having refunded to the defendant the equivalent of
the scholarship cash valid or not?

RULING:
The contract of waiver between the plaintiff and respondent on September 10, 1951, is a direct
violation of Memorandum No. 38 and hence null and void. The contract was contrary to sound
policy and civic honesty. The policy enunciated in Memorandum No. 38, s. 1949 is public policy.
When students are given full or partial scholarships, it is understood that such scholarships are
merited and earned. The amount in tuition and other fees corresponding to these scholarships
should not be subsequently charged to the recipient students when they decide to quit school or to
transfer to another institution. Scholarships should not be offered merely to attract and keep
students in a school.

RATIO DECIDENDI:
In the case of Zeigel vs. Illinois Trust and Savings Bank, 245 Ill. 180, 19 Ann. Case 127, the court
said: 'In determining a public policy of the state, courts are limited to a consideration of the Constitution,
the judicial decisions, the statutes, and the practice of government officers.' It might take more than a
government bureau or office to lay down or establish a public policy, as alleged in your communication,
but courts consider the practices of government officials as one of the four factors in determining a public
policy of the state. It has been consistently held in America that under the principles relating to the
doctrine of public policy, as applied to the law of contracts, courts of justice will not recognize or uphold a
transaction which its object, operation, or tendency is calculated to be prejudicial to the public welfare,  to
sound morality or to civic honesty (Ritter vs. Mutual Life Ins. Co., 169 U.S. 139; Heding vs. Gallaghere 64
L.R.A. 811; Veazy vs. Allen, 173 N.Y. 359).

Finally, in Gabriel vs. Monte de Piedad, Off. Gazette Supp. Dec. 6, 1941, p. 67 we read: '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 or tends clearly to undermine the security of individual rights.

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