Monthly Archives: June 2016

CALTEX (Philippines) Inc. v. Enrico Palomar as The Postmaster General, G.R. No. L-19650, 29 September 1966



Caltex launched its promo “Caltex Hooded Pump Contest”.

“No puzzles, no rhymes? You don’t need wrappers, labels or boxtops? You don’t have to buy anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . .”

In order to secure advance clearance for anticipated extensive use of mails, Caltex provided the Postmaster General a copy of the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law.

SECTION 1954. Absolutely non-mailable matter. — x x x.

Written or printed matter x x x concerning any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind by means of false or fraudulent pretenses, representations, or promises.

“SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, x x x the Director of Posts may x x x return to the person, depositing the same in the mails, with the word “fraudulent” plainly written or stamped upon the outside cover thereof, x x x.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director of Posts may, upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift enterprise or scheme for the distribution of money, x x x forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer xxx.

The Postmaster General declined to grant the requested clearance, relying on Opinion 217 issued by the Secretary of Justice. Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster General Enrico Palomar, praying “that judgment be rendered declaring its ‘Caltex Hooded Pump Contest’ not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of the public”. The Postmaster General argued that there is no question of construction because he “simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest”, hence, there is no room for declaratory relief.



(1) Do we need to apply rules of construction to determine if “Caltex Hooded Pump Contest” promo violates the Postal Law?

(2) What is the correct construction of the terms “lottery” and “gift enterprise” in relation to the Postal Law?

(3) Whether “consideration” as an element of “lottery” also applies to “gift enterprise”.



(1) YES.

Construction, verily, is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the law . This is precisely the case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as any other.

(2) The term “lottery” extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: First, consideration; second, prize; and third, chance.Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery. Indeed, even as we head the stern injunction, “look beyond the fair exterior, to the substance, in order to unmask the real element and pernicious tendencies which the law is seeking to prevent”, we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance.

While an all-embracing concept of the term “gift enterprise” is yet to be spelled out in explicit words, there appears to be a consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a prize. As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee’s (Caltex) products.

(3) YES.

[I]n the Postal Law, the term in question is used in association with the word “lottery”. With the meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned — it is only logical that the term under a construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term “gift enterprise” be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the “gift enterprise” therein included.

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Posted by on June 29, 2016 in Case Digests, Statutory Construction


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