TICKLER: APPLICATION OF ART.

Cui v. Arellano University 2 SCRA 205

FACTS:

Emeterio Cui was a law student at the Arellano University. He finished the first
three years of his law degree at said law school. He was an academic scholar and so at the end
of every semester he was being refunded his tuition fee. Meanwhile, in 1949, the Director of
Private Schools issued a Memorandum ordering schools not to hold back the credentials of
former student scholars who choose to transfer to other schools if said students fail to pay their
tuition. The Memorandum states that 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.

In 1951, Cui and Arellano University entered into an agreement whereby Cui agreed to waive
his right to transfer to another school unless he would refund the school the scholarship
granted to him. But then when Cui was about to be a senior student, he decided to transfer to
Abad Santos Law School. He finished his law degree at Abad Santos. In order to take the 1953
bar exams, Cui must obtain his transcripts from Arellano University but the latter refused to
issue his credentials unless he pay them back the amount of his scholarship. Cui paid in protest.

ISSUE:
Whether or not the waiver made by Cui is valid.

HELD:
No. The waiver is not valid for being contrary to public policy. The waiver was
repugnant to sound morality and civic honesty. The policy enunciated in the Memorandum
issued by the Director of 3 Private Schools is sound policy. Scholarships are awarded in
recognition of merit not to keep outstanding students in school to bolster its prestige. In the
understanding of Arellano University, scholarships award is a business scheme designed to
increase the business potential of an education institution. Such understanding is not only
inconsistent with sound policy but also good morals. Arellano University is hence ordered to
refund what Cui paid with interest.