Cui vs. Arellano Univ

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METERIO CUI, plaintiff-appellant,

vs.
ARELLANO UNIVERSITY, defendant-appellee

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

Facts:

Herein plaintiff, METERIO CUI, after finishing his preparatory law course enrolled in the
College of Law of the defendant University wherein he finished his law studies up to and including
the first semester of the fourth year.

Plaintiff enrolled for the last semester of his law studies in the defendant university but
failed to pay his tuition fees because his uncle accepted his new employment at the College of Law
of Abad Santos University, plaintiff then 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 where he
graduated.

In order to take the bar the plaintiff petitioned the latter to issue to him the needed
transcripts but the defendant refused until after he had paid back the whole amount of tuition fees
paid by 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 the college of law or the fourth year. Allegedly the
petitioner entered into a agreement with the respondents university wherein "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 University (defendant) the equivalent of the scholarship cash.

In the instant case the petitioner seeks to recover the sum he paid under protest questioning
thereby the validity of the subject contract.

Ruling:

No, the provision of the contract between plaintiff and the defendant, whereby the former
waived his right to transfer to another school without refunding to the latter the equivalent of his
scholarships in cash, is not valid. In the courts opinion the stipulation in question is contrary to public
policy and, hence, the waiver is null and void.

If Arellano University understood clearly the real essence of scholarships and the motives
which prompted this office to issue Memorandum No. 38, s. 1949, it should have not entered into a
contract of waiver with Cui on September 10, 1951, which is a direct violation of our Memorandum
and an open challenge to the authority of the Director of Private Schools because the contract was
repugnant to sound morality and civic honesty.

Hence, being contrary to public policy, morals or good custom the waiver, from which the
act of the respondents could be legally based, was declared in valid. The appealed decision was
reversed and the respondent ordered to refund the petiotioner.

Doctrine:

A waiver of right to transfer to another school without refunding to the source school the equivalent
of his scholarships in cash, is not valid for being contrary to public policy, morals or good custom.

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