EMETERIO CUI v.

ARELLANO UNIVERSITY,

GR No. L-15127, May 30, 1961

Principle:

Article 6. Right may be waived, unless the waiver is not contrary to law, public order, public
policy, moral, good customs, or prejudicial to a third person with a right recognized by law.

Facts:

Emeterio Cui, before the school year 1948-1949 tool up preparatory law course in the
Defendant University. After finishing his preparatory law course plaintiff enrolled in the college of
law. Plaintiff finished his studies in the defendant university up to and including the first
semester of the fourth year. Emeterio Cui was granted scholarship by the defendant university
on scholarship merit as a student of the College of Law. Stipulated in the contract for the
scholarship grant is the following: “In consideration of the scholarship granted to me by the
University, I hereby waive my right to transfer to another school without having refunded to the
University (defendant) the equivalent of my scholarship cash.” On his last semester on the
University, Cui transferred to Abad Santos University where his uncle, the previous dean and
legal adviser of Arellano University, was now the dean of the College of Law of Abad Santos
University. Before taking the bar, Cui petitioned the defendant university for the release of his
TOR. The university refused until Cui refunded the scholarship granted to him totaling the
amount of P1, 033.87, which he did under protest. Thereafter, he filed for recovery plus
damages. The Court of First Instance of Manila ruled in favor or Arellano University. Hence, this
petition for review.

Issue:

Whether or not the stipulation on waiver of right to transfer without having refunded the
scholarship is void.

Ruling:

Yes. The stipulation contravenes with both moral and public policy. The practice of
awarding scholarships to attract students and keep them in school is not good customs nor it
has received some kind of social and practical confirmation except in some private institutions
as in Arellano University. The decision appealed from is hereby reversed and another one shall
be entered sentencing the defendant to pay to the plaintiff the sum of P1,033.87 with interest
thereon at the legal rate from September 1, 1954, date of the institution of this case, the cost
and dismissing defendant’s counterclaim.