Cui vs Arellano University

2 SCRA 205 | May 30, 1961

J. Conception

Fact:

Plaintiff is a law student who obtained previous scholarships from Defendant. Such scholarships
we’re availed from point of plaintiff’s undergraduate until 3rd year law studies and contracted by waiving
rights to transfer to another institution. However if scholar proceeds to transfer, refund in equivalence
with the cash endowed to scholarship shall be paid.

Plaintiff on his 4th year term proceeded to transfer and obtained graduation from a different
university. In preparation for the bar exam, plaintiff requires the transcript of records from defendant
however as stipulated in scholarship contract, the former is required to pay the refund due. The plaintiff
in mind of prioritizing the bar exam, paid the defendant however under protest.

Plaintiff thereafter filed complaints against the defendant to recover payment and contested
the nature of the scholarship that the former provides.

Issue:

Can the plaintiff recover his payment from the defendant?

Held:

Yes, scholarships by nature should establish sound policy and good morals. It is not to
undermine individual rights. Despite of a signed contract, the defendant however violated at first the
doctrine of public policy which flaws the scholarship contract. Wherefore recovery of payment with
interest for the plaintiff is due by defendant and the latter’s counterclaim is dismissed.