An educational institution has a contractual obligation to timely inform its students of their academic status and can be held liable for damages if its negligence misleads a student into believing they have completed all graduation requirements, thereby causing injury; this liability is anchored on Articles 19 and 20 of the Civil Code concerning the principle of abuse of rights and liability for negligent acts.

The case arose from the relationship between an educational institution and its student concerning the fulfillment of academic requirements for a law degree. The dispute centered on the university's responsibility to communicate a student's final grade and academic standing, especially when the student's eligibility for graduation and the bar examinations was at stake.

• Respondent Romeo A. Jader was a law student at petitioner University of the East (UE) from 1984 to 1988.
• In the first semester of his last year, he received an "incomplete" grade in Practice Court I.
• On February 1, 1988, he applied for the removal of this incomplete grade and took the examination on March 28, 1988.
• Jader's name appeared on the Tentative List of Candidates for graduation for the Bachelor of Laws degree, with an annotation about his deficiency in Practice Court I.
• His name was also included in the invitation for the 35th Investiture & Commencement Ceremonies scheduled for April 16, 1988.
• The invitation contained a footnote stating: "This is a tentative list. Degrees will be conferred upon these candidates who satisfactorily complete requirements..."
• Jader attended the graduation ceremony, went on stage with his family, had his tassel turned, and received a symbolic diploma.
• He subsequently hosted a celebration, took a leave of absence from his job, and enrolled in a pre-bar review class to prepare for the 1988 bar examinations.
• On May 30, 1988, the professor for Practice Court I submitted Jader's grade, which was a "5" (failing).
• Upon learning of his failing grade, Jader was unable to take the 1988 bar examinations and dropped his review class.

• The University of the East (UE) argued that it had no liability for the damages suffered by the respondent.
• UE contended that the proximate cause of Jader's damages was his own negligence in failing to verify the result of his removal examination with the concerned professor.
• The university asserted that it never led Jader to believe he had completed all graduation requirements, as his name was clearly included in a "tentative list" with an explicit annotation of his deficiency.

• Romeo A. Jader claimed that he suffered moral shock, mental anguish, serious anxiety, and a besmirched reputation due to the university's negligence.
• He argued that the university's actions, including his name on the graduation list and allowing his full participation in the commencement ceremony, led him to reasonably believe that he had graduated.
• Jader asserted that this negligence directly caused him to be unable to take the 1988 bar examinations, resulting in damages, including unrealized income.

• Procedural Issues:
  • N/A
• Substantive Issues:
  • Whether an educational institution may be held liable for damages for misleading a student into believing that he had satisfied all requirements for graduation.
  • Whether the University of the East was negligent in failing to promptly inform Romeo Jader of his academic standing.
  • Whether Romeo Jader was entitled to an award of moral damages in addition to actual damages.

• Procedural:
  • N/A
• Substantive:
  • Yes, the university is liable for damages. The Court held that the relationship between a school and a student is contractual, and the school has an obligation to timely inform students of their academic status. UE's failure to do so, especially when it knew Jader had a failing grade but still allowed him to participate in graduation rites, constituted negligence and a breach of its duty to act in good faith under Articles 19 and 20 of the Civil Code. The negligence of the professor in the late submission of the grade is imputable to the university as the employer. The Court found that UE's "conscious indifference" to Jader's rights caused him injury. However, the Court ruled that Jader was not entitled to moral damages. As a senior law student, he had a concurrent responsibility to be diligent in verifying his own academic records to ensure all requirements were met. His failure to do so contributed to the humiliation he experienced, thereby negating the basis for moral damages. The Supreme Court affirmed the award for actual damages (P35,470.00) and attorney's fees (P5,000.00) but deleted the award of moral damages granted by the Court of Appeals.

• Contract of Education — The relationship between a student and an educational institution is contractual. The school is obligated to provide education and timely information on academic status. In this case, the Court found that UE breached this contract by failing to promptly inform Jader of his failing grade, which was a critical component of his academic status.
• Principle of Abuse of Rights (Article 19, Civil Code) — This doctrine mandates that every person must, in the exercise of their rights and performance of their duties, act with justice, give everyone their due, and observe honesty and good faith. The Court applied this principle to find UE liable, stating that its "conscious indifference" to Jader's welfare and its failure to act seasonably did not constitute good faith.
• Quasi-Delict (Article 20, Civil Code) — This principle holds that any person who, contrary to law, willfully or negligently causes damage to another shall indemnify the latter. The Court used this in conjunction with Article 19 to establish that UE's negligence in handling and communicating Jader's academic status was an actionable wrong that caused him damage.
• Doctrine of Contributory Negligence (implied) — While not explicitly named, the Court's reasoning for removing the award of moral damages reflects this doctrine. It held that Jader, as a senior law student, should have verified his own academic standing and that his failure to do so contributed to his own injury (humiliation), thus mitigating the petitioner's liability by removing the moral damages component of the award.

• "Educational institutions are duty-bound to inform the students of their academic status and not wait for the latter to inquire from the former. The conscious indifference of a person to the rights or welfare of the person/persons who may be affected by his act or omission can support a claim for damages."

• Sea Commercial Company v. CA — Cited to support the modern legal tendency to grant indemnity for damages in cases involving an abuse of right, even if the act itself is not illicit.
• PNB v. CA — Referenced to explain that Article 19 of the Civil Code was intended to expand the concept of torts to provide a legal remedy for moral wrongs that are not specifically defined in statutes.

• Article 19, Civil Code — This article was the primary basis for the Court's ruling, establishing that UE failed to act with good faith in the performance of its duties towards its student, thereby abusing its rights.
• Article 20, Civil Code — This article was applied to hold UE liable for indemnifying Jader for the damages caused by its negligent actions.
• Rule 45, Rules of Court — This rule was mentioned as the procedural vehicle through which the petitioner elevated the case from the Court of Appeals to the Supreme Court.