EMETERIO CUI, plaintiff-appellant, vs.

ARELLANO UNIVERSITY, defendant-appellee

G.R. No. L-15127 | May 30, 1961

Ponente: J. Conception

FACTS: Emeterio Cui was a law student at Arellano University who received a scholarship for scholastic
merit. The scholarship required him to sign a waiver of his right to transfer to another school without
refunding the equivalent of the scholarship cash. Cui's uncle, Francisco Capistrano, was the dean of the
college of law at Arellano University. However, Capistrano transferred to Abad Santos University during
Cui's last semester in law school. Cui wished to follow his uncle and left Arellano to enroll in Abad Santos
University. When Cui was about to take the bar exam, he needed his transcripts from Arellano.
However, Arellano refused to give him his transcripts unless he paid the sum of Php1,033.87, the
amount he received as scholarship during his enrolment there. Cui had no choice but to pay the amount
so he could take the bar exam. Cui then petitioned the court for the reimbursement of the amount he
paid to Arellano.

ISSUE: Was the provision of the contract between Cui and Arellano University waiving the former’s right
to transfer to another school valid?

RULING: No. The contract was “repugnant to sound morality and civic honesty.” In Gabriel v. Monte de
Piedad, the Court said that “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.” The policy given by Memorandum No. 38
is a sound policy and therefore should be followed by Arellano University.