Unciano Paramedical College, Inc. vs. Court of Appeals

When a doctrine of the Supreme Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted on the faith thereof. Accordingly, the Non vs. Dames ruling, which abandoned the Alcuaz "termination of contract" theory, could not invalidate the legal effects of the school's valid termination of enrollment that occurred while Alcuaz was still controlling.

Unciano Paramedical College, Inc. (now Unciano Colleges & General Hospital, Inc.) operated a College of Nursing in Manila. Private respondents Elena Villegas and Ted Magallanes, through their mothers Victoria Villegas and Jacinta Magallanes, were students enrolled therein. The legal backdrop involves two competing Supreme Court doctrines on the duration of the school-student enrollment contract: Alcuaz vs. Philippine School of Business Administration (May 2, 1988), which recognized a "termination of contract" theory permitting schools to refuse re-enrollment after a semester ends, and Non vs. Dames (May 20, 1990), which abandoned Alcuaz and recognized the student's right to continue enrollment up to graduation except for academic deficiency or violation of disciplinary regulations, pursuant to Section 9 of Batas Pambansa Blg. 232 (the Education Act of 1982) and Paragraph 107 of the Manual of Regulations for Private Schools.

Unciano Paramedical College, Inc. operated a College of Nursing in Manila. Elena Villegas and Ted Magallanes were students enrolled therein. Around the latter part of July 1989, the two students initiated a petition proposing the organization of a student council in the school and solicited endorsements from the studentry, gathering at least 180 signatures. On August 18, 1989, Villegas and another student, Solomon Barroa, were summoned to the office of Dr. Evelyn Moral, the Dean of Discipline, and were admonished not to proceed with the proposal because the school did not allow and had never allowed such an organization.

When news leaked in September 1989 that the students would be barred from enrollment, they sought confirmation with Dr. Moral, who told them it was not true unless they violated school rules and regulations and if they still insisted on their student council. On October 28, 1989, the students met with Dean Laureana Vitug and Dr. Moral, who informed them they would be barred from enrollment for the second semester because they supposedly harassed a female student, invited an outsider to speak before the students, and because the school had an arrangement with the Department of Education, Culture and Sports not to allow students to put up a student council. Dr. Moral advised them to get their Honorable Dismissal and warned that if she herself were to give it, it would be marked "expelled." On November 6, 1989, Dr. Moral informed the students they were no longer allowed to enroll because they were allegedly members of the National Union of Students of the Philippines and the League of Filipino Students, officers of the student organization they organized, and moreover "drug addicts." The students asked for proof of these accusations but were given none; Dr. Moral stated that the school had people investigating them but did not disclose identities or provide evidence.

The students retained the Free Legal Assistance Group (FLAG) as counsel, which sent a letter on November 13, 1989 to Mirando Unciano, President of the College, demanding compliance with constitutional due process requirements before unilaterally dismissing the students and requesting a conference before November 17, 1989, as the enrollment deadline was approaching. A meeting was held on November 17, 1989, attended by Dr. Moral, Dean Vitug, Mr. Rustico Lopez, the students, and their counsel, but was reset to November 22, 1989, and then to November 27, 1989, due to the absence of the College President and the school's legal counsel. On November 27, 1989, another meeting was held but again reset to November 29, 1989, at the school officials' request that the students bring their parents or guardians. A verbal altercation occurred due to the school officials' delaying tactics and refusal to discuss the merits of the accusations. On November 29, 1989, the students were informed that the President had unilaterally refused to allow them to enroll and that it was up to their parents to request or appeal to the school officials. The mothers wrote to the school officials requesting that their children be allowed to enroll, but on December 11, 1989, the students were informed that the Board of Trustees had refused to grant the parents' request.

On April 16, 1990, the students, through their mothers, filed before the Regional Trial Court, National Capital Judicial Region, Branch 21, a petition for injunction and damages with prayer for a writ of preliminary mandatory injunction. The trial court issued a temporary restraining order on May 16, 1990, and on June 4, 1990, granted the petition for preliminary mandatory injunction, ordering the school to allow the students to enroll for the first semester of school year 1990-1991 upon filing a bond of ₱2,000.00 each. The writ was issued on June 11, 1990, and the school's motion for reconsideration was denied on June 13, 1990. The school elevated the matter to the Court of Appeals via petition for certiorari and prohibition, which dismissed the petition on February 7, 1991, relying on the Non vs. Dames doctrine that had abandoned the Alcuaz "termination of contract" theory. The motion for reconsideration was denied on June 3, 1991.

• Retroactive Application of the Non Doctrine: Petitioners argued that under the then-prevailing Alcuaz doctrine promulgated on May 2, 1988, the contract between the school and the students was validly terminated upon the end of the first semester of school year 1989-1990. Although Alcuaz was later abandoned in Non vs. Dames promulgated on May 20, 1990, that ruling came after the termination of the contract had long become fait accompli. Petitioners maintained that the settled rule is that when a doctrine of the Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted on the faith thereof, conformably with People vs. Jabinal. Thus, the writ of preliminary mandatory injunction was issued by the trial court with grave abuse of discretion.

• Retroactive Application of Overruled Doctrine: Whether or not the Non doctrine should be applied retroactively to govern and invalidate the legal effects of incidents that took place prior to its adoption and which incidents were proper and valid under the Alcuaz doctrine prevailing at the time said incidents took place.

• Retroactive Application of Overruled Doctrine: No. The Non vs. Dames ruling should not be given retroactive effect to cases that arose before its promulgation on May 20, 1990. The contract between the school and the students was validly terminated at the end of the first semester of school year 1989-1990 under the then-prevailing Alcuaz doctrine, and the writ of preliminary mandatory injunction was issued with grave abuse of discretion.

• Retroactive Application of Overruled Doctrine: The Court agreed with petitioners that applying the Non vs. Dames doctrine retroactively to this case, which was filed on April 16, 1990 — before Non was promulgated on May 20, 1990 — would result in oppression to petitioners and other schools similarly situated who relied on the Alcuaz ruling of May 2, 1988, which recognized the termination of contract theory. The Court relied on its earlier pronouncement in People vs. Jabinal that when a doctrine is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. The Court found a parallel in National Service Corporation vs. NLRC, where it had similarly declined to give retroactive effect to National Housing Corporation vs. Juco, holding that doing otherwise would be oppressive to parties who had acted under a prior recognized rule. Turning to the propriety of the writ, the Court applied Capitol Medical Center vs. Court of Appeals, which discussed that the sole object of a preliminary injunction is to preserve the status quo — the last actual peaceable uncontested status which preceded the controversy — and that a mandatory injunction, which tends to do more than maintain the status quo, should issue only in cases of extreme urgency where the right is very clear. Because the contract between the parties was validly terminated in October 1989 under Alcuaz, that termination constituted the status quo. The writ ordering the school to allow the students to enroll for the first semester of school year 1990-1991 would not restore the status quo but would go a step backward, restoring the condition preceding it. The students possessed no clear legal right to re-enroll, and the school was not legally obliged to re-admit them.

• Prospective Application of Overruled Doctrines — When a doctrine of the Supreme Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted on the faith thereof. The Court applied this doctrine to hold that the Non vs. Dames ruling, which abandoned the Alcuaz "termination of contract" theory, could not retroactively invalidate the school's valid termination of the students' enrollment, which occurred while Alcuaz was still controlling.

• Status Quo in Preliminary Injunction — The sole object of a preliminary injunction, whether prohibitory or mandatory, is to preserve the status quo until the merits of the case can be heard. The status quo is the last actual peaceable uncontested status which preceded the controversy. A mandatory injunction, which tends to do more than maintain the status quo, is generally improper prior to final hearing, but may issue in cases of extreme urgency where the right is very clear, where there is a willful and unlawful invasion of the plaintiff's right, and where the effect of the injunction is to re-establish and maintain a pre-existing continuing relation recently and arbitrarily interrupted. The Court applied this doctrine to find that the writ ordering re-enrollment would not restore the status quo (the valid termination of enrollment) but would go backward to a prior condition, and that the students had no clear legal right to re-enroll.

• "It is a settled rule that when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof." — This passage articulates the controlling ratio decidendi: the prospective-only application of overruled doctrines, which the Court applied to shield the school from the retroactive effect of the Non vs. Dames ruling.

• "The sole object of a preliminary injunction, whether prohibitory or mandatory, is to preserve the status quo until the merits of the case can be heard. The status quo is the last actual peaceable uncontested status which preceded the controversy." — This passage, quoted from Capitol Medical Center vs. Court of Appeals, defines the controlling doctrine on preliminary injunction that the Court applied to invalidate the writ, finding that the mandatory injunction would not preserve but disturb the status quo.

• "Private respondents do not possess any clear legal right to re-enroll, corollarily, petitioners are not obliged legally to re-admit them." — This passage states the Court's conclusion on the absence of a clear legal right, which is the prerequisite for the issuance of a writ of preliminary mandatory injunction.

• Alcuaz vs. Philippine School of Business Administration, Quezon City Branch, G.R. No. L-76353, May 2, 1988, 161 SCRA 7 — The prior controlling doctrine recognizing the "termination of contract" theory, under which a student's enrollment contract was understood to last only one semester, permitting schools to refuse re-enrollment after the semester ended. The Court held that the school validly relied on this doctrine when it terminated the students' enrollment.

• Non vs. Dames, G.R. No. 89317, May 20, 1990, 185 SCRA 523 — The doctrine that abandoned and overruled Alcuaz, declaring that the school-student contract is imbued with public interest and that students have the right to continue their course up to graduation except for academic deficiency or violation of disciplinary regulations. The Court held that this doctrine should not be applied retroactively to cases that arose before its promulgation.

• People vs. Jabinal, G.R. No. L-30061, 55 SCRA 607 (1974) — The foundational precedent establishing the rule that when a doctrine is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine. The Court relied on this case as the settled rule governing retroactivity of overruled doctrines.

• National Service Corporation vs. NLRC, G.R. No. 69870, 168 SCRA 122 (1988) — A case in which the Court declined to give retroactive effect to National Housing Corporation vs. Juco, holding that doing otherwise would be oppressive to parties who had acted under a prior recognized rule. The Court cited this as a parallel instance of prospective application of an overruling doctrine.

• Capitol Medical Center, Inc. vs. Court of Appeals, G.R. No. 82499, 178 SCRA 493 (1989) — The controlling precedent on the purpose and requirements of a preliminary injunction, defining the status quo and the conditions under which a mandatory injunction may issue. The Court applied this doctrine to find that the writ was improperly issued.

• Paragraph 137, Manual of Regulations for Private Schools — Provides that when a student registers in a school, it is understood that he is enrolling for the entire semester for collegiate courses. The Court in Alcuaz had construed this as authority for schools to refuse re-enrollment after a semester ends; Non vs. Dames clarified that it merely protects schools collecting tuition on an installment basis and does not mean enrollment is limited to one semester.

• Paragraph 107, Manual of Regulations for Private Schools — States that every student has the right to enroll in any school upon meeting its specific requirements and reasonable regulations, and that except in cases of academic delinquency and violation of disciplinary regulations, the student is presumed qualified for enrollment for the entire period he is expected to complete his course. Cited in Non vs. Dames as recognizing the student's right to continued enrollment.

• Section 9, Batas Pambansa Blg. 232 (Education Act of 1982) — Enumerates the rights of students in school, including the right to freely choose their field of study and to continue their course up to graduation, except in cases of academic deficiency or violation of disciplinary regulations. Cited in Non vs. Dames as the statutory basis for the student's right to continued enrollment.

Narvasa, C.J., Padilla, Regalado, and Campos, Jr., JJ.