Title
Cui vs. Arellano University
Case
G.R. No. L-15127
Decision Date
May 30, 1961
Emeterio Cui, a law student, transferred universities after receiving scholarships. Arellano University demanded refunds for his scholarships upon transfer, citing a signed agreement. The Supreme Court ruled the refund clause void, deeming it contrary to public policy, and ordered the university to return the funds.

Case Digest (G.R. No. L-15127)
Expanded Legal Reasoning Model

Facts:

  • Parties and Course of Study
    • Emeterio Cui enrolled in preparatory law and the College of Law of Arellano University for school years 1948–1949 through first semester of the fourth year.
    • Francisco R. Capistrano, Cui’s maternal uncle, served as Dean of Arellano University’s College of Law until his departure to Abad Santos University, after which Cui transferred and completed his last semester there.
  • Scholarship Grants and Tuition Refunds
    • Cui received merit‐based scholarships each semester, entitling him to a full refund of tuition fees at semester’s end.
    • From first semester up to and including first semester of his fourth year, Cui paid then received back a total of ₱1,033.87.
  • Contractual Waiver and Release of Records
    • Upon each scholarship grant, Cui signed a waiver: he would not transfer without refunding the cash value of his scholarships.
    • On August 16, 1949, Director of Private Schools issued Memorandum No. 38, s. 1949, declaring that scholarship refunds may not be conditioned on student retention or be charged upon transfer.
    • Arellano University received the memorandum but refused to release Cui’s transcripts unless he repaid ₱1,033.87; Cui, needing the records for the 1953 bar exam, paid under protest.
  • Procedural History
    • Cui filed suit to recover ₱1,033.87 plus moral damages (₱2,000), exemplary damages (₱500), attorney’s fees (₱2,000), and litigation expenses (₱500).
    • Arellano University answered, asserting the waiver’s validity, attacking the memorandum’s binding effect, and counterclaiming ₱10,000 damages plus ₱3,000 attorney’s fees.
    • The Court of First Instance upheld the waiver as valid, deemed the memorandum advisory only, absolved Arellano University of liability, dismissed Cui’s claim with costs against him, and dismissed the counterclaim for lack of proof.

Issues:

  • Whether the contractual provision waiving Cui’s right to transfer without refunding scholarship cash is valid or void as contrary to public policy.
  • Whether Memorandum No. 38, s. 1949 of the Director of Private Schools is mandatory and binding on private institutions and affects the enforceability of the waiver.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

Analyze Cases Smarter, Faster
Jur helps you analyze cases smarter to comprehend faster—building context before diving into full texts.