STATCON CHAPTER II case digests (all from the internet)

1. Nature and Purpose

a. Definition. Nature and Purpose of Constrution

CALTEX V POLOMAR

G.R. No. L-19650

Caltex Philippines, Inc., petitioner-appellee

Vs.

Enrico Palomar, in his capacity as The Postmaster General, respondent-appellant

Click Here for the Full Text of the case

FACTS:

In the year 1960, Caltex Philippines conceived and laid the ground work for a promotional scheme
calculated to drum up patronage for its oil products. The contest was entitled Caltex Hooded Pump
Contest, which calls for participants to estimate the actual number of liters as hooded gas pump at
each Caltex station will dispense during a specific period.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the
contest but also for the transmission of communications, representations were made by Caltex with the
postal authorities for the contest to be cleared in advance for mailing. This was formalized in a letter
sent by Caltex to the Post master General, dated October 31, 1960, in which Caltex, thru its counsel,
enclosed a copy of the contest rules and endeavored to justify its position that the contest does not
violate the The Anti-Lottery Provisions of the Postal Law.

Unfortunately, the Palomar, the acting Postmaster General denied Caltexs request stating that
the contest scheme falls within the purview of the Anti-lottery Provision and ultimately, declined
Clatexs request for clearance.

Caltex sought reconsideration, stressing that there being no consideration involved in part of the
contestant, the contest was not commendable as a lottery. However, the Postmaster General
maintained his view that the contest involves consideration, or even it does not involve any
consideration it still falls as Gift Enterprise, which was equally banned by the Postal Law.

ISSUE:

Whether the petition states a sufficient cause of action for declaratory relief?

Whether or not the scheme proposed by Caltex the appellee is within the coverage of the prohibitive
provisions of the Postal Law?

HELD:

I.
By express mandate of Section 1 of Rule 66 of the old Rules of Court which deals with the applicability to
invoke declaratory relief which states: Declaratory relief is available to person whose rights are affected
by a statute, to determine any question of construction or validity arising under the statute and for a
declaration of rights thereunder.

In amplification, conformably established jurisprudence on the matter, laid down certain conditions:

There must be a justiciable controversy.

The controversy must be between persons whose interests are adverse.

The party seeking declaratory relief must have a legal interest in the controversy.

The issue involved must be ripe for judicial determination.

With the appellees bent to hold the contest and the appellants threat to issue a fraud order if carried
out, the contenders are confronted by an ominous shadow of imminent and inevitable litigation unless
their differences are settled and stabilized by a declaration. And, contrary to the insinuation of the
appellant, the time is long past when it can rightly be said that merely the appellees desires are
thwarted by its own doubts, or by the fears of others which admittedly does not confer a cause of
action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar, it
was translated into a positive claim of right which is actually contested.

Construction

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.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation
engaged in promotional advertising was advised by the county prosecutor that its proposed sales
promotion plan had the characteristics of a lottery, and that if such sales promotion were conducted,
the corporation would be subject to criminal prosecution, it was held that the corporation was entitled
to maintain a declaratory relief action against the county prosecutor to determine the legality of its sales
promotion plan.

II.

Is the Contest Scheme a Lottery?

Lottery

Extends to all schemes for the distribution of prizes by chance

e.g. policy playing, gift exhibitions, prize concerts, raffles and fairs as well as various forms of gambling.

Three Essential Elements:

Consideration

Prize
3. Chance

No, according to the Supreme Court, the contest scheme is not a lottery but it appears to be more
of a gratuitous distribution since nowhere in the rules is any requirements that any fee be paid, any
merchandise be bought, any services be rendered, or any value whatsoever be given for the privilege to
participate. Since, a prospective contestant has to do is 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.
Because of this, the contest fails to exhibit any discernible consideration which would brand it as a
lottery.

Moreover, the law does not condemn the gratuitous distribution of property by chance, if no
consideration is derived directly or indirectly from the party receiving the chance, but it does condemn
as criminal scheme in which a valuable consideration of some kind is paid directly or indirectly for the
chance to draw a prize.

Is the scheme, as sales promotion which would benefit the sponsor in the way of increased patronage
be considered as a consideration and thus violates the Postal Law?

No, the required element of consideration does not consist of the benefit derived by the sponsors
of the contest. The true test lies on whether or not the participant pays a valuable consideration for the
chance of winning and not whether or not those conducting the enterprise receiver something of value
for the distribution of the prize.

Is the Contest Scheme a Gift Enterprise?

Even if the term Gift Enterprise is not yet defined explicitly, there appears to be a consensus
among lexicographers and standard authorities that the term is common applied to a sporting artifice of
under which goods are sold for their market value but by way of inducement to purchase the product,
the purchaser is given a chance to win a prize.

And thus, the term of gift enterprise cannot be established in the case at bar since there is not
sale of anything to which the chance offered is attached as an inducement to the purchaser. The contest
is open to all qualified contestant irrespective of whether or not they buy the appellees products.

The lesson that we derive from this state of the pertinent jurisprudence is that every case must be
resolved upon the particular phraseology of the applicable statutory provision. 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.

In the end, the Supreme Court ruled out that under the prohibitive provision of the Postal Law, gift
enterprise and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding non in the contest, it was ruled out that the appellee may
not be denied the use of the mails for the purpose thereof.

MACONDRAY V URBANO EUSTAQUIO (WALEY DIGEST )

b. Legislative Intent, Legislative Purpose & Legislative Meaning

GENERAL V. BARRAMEDA
January 30, 1976

Rodolfo General and Carmen Gontang- PetitionersLeoncio Barrameda- RepsondentPetition for certiorari
to review the decision of the CAI.

Facts:1. Plaintiff seeks to redeem the land formerlyembraced by Transfer Certificate Title (TCT) No.
1418,containing an area of 59 hectares in MinabalacCamarines Sur, and to annul all contracts affecting
theproperty between the Development Bank of thePhilippines and Rodolfo General.2. The land
in dispute was mortgaged by plaintiff (General) to DBP for P22,000. For failure to pay, themortgagee
(DBP) foreclosed the property.3. On April 23, 1962, provincial sheriff conductedauction sale in which the
highest bidder, the saidmortgagee, bought the mortgaged property for P7,271.224. On September 2,
1963, the registration of the saleand affidavit wherein TCT No. 1418 in the name of plaintiff was
canceled and TCT No. 5003 was issued tothe DBP.5. On Sept 3, 1963 defendants General and
Gontangpurchased land from DBP. Their sale was annotated in TCT 5003 on Nov. 26. 1963 only.6. On
Nov. 20 -1963 plaintiff offered to redeem theland. When DBP refused, then planitiff filed suit.
Theoriginal complaint was filed on Nov. 20, 1963 while onAugust 12, 1964, plaintiff deposited with the
clerk of court the sum of P7,271.22 representing the purchaseprice of the land.7. In the trial court, the
judge asserted that the one-year period of redemption began to run on april 23,1962, when the sale at
public auction was held, andended on April 24, 1963 and the deposit of redemptionprice on August 12,
1964 were made beyond theredemption period and that defendants RodolfoGeneral and Carmen
Gontang were legitimatepurchasers.8. In the appellate court, the appealed judgment wasreversed and
the other one entered declaring 1. Nulland void the sale executed on September 3, 1963, bydefendant
DBP to Gontang and General 2. TCT 5003cancelled and 3. Mortaged property redeemed andordering the
clerk of court to deliver to General andGontang and the Register of Deeds to issue a newtransfer
certificate of title in the name of plaintiff inlieu of TCT 5003 upon payment of fees.

(sorry walang issue and held )

LATEX EMPLOYEES ASSOC V EDUVALA (WALEY DIGEST )

c. Matters Inquired in Construing a State

MANILA JOCKEY CLUB V. GAMES AND AMUSEMENT BOARD

Facts:

The authorized racing days specifically designated and distributed in Section 4 of RA 309 the basic law
on horse racing in the Philippines amended by RA 983 are as follows: (1) Philippine Anti-TB Society for
12 Sundays, (2) PCSO - 6 Sundays (3) White Cross - 4 Sundays (4) Grand Derby Race of PATS - 1 Sunday
(5) Private Individuals and entities - 29 Sundays.

However, RA 1502 increased the sweepstakes draw and races of the PCSO from 6 to 12 Sundays, but
without specifying the days on which they are to be run. To accommodate these additional races, GAB
resolved to reduce the number of Sundays assigned to private individuals and entities by six.

Appellants protested that the said increase should be taken from the 12 Saturdays reserved to the
President, for charitable relief OR should be assigned to any day of the week besides Sunday, Saturday
and Legal Holiday.
 Issues:

(1) Whether or not the petitioner has a vested right to the unreserved Sundays.

(2) Whether or not the additional sweepstakes races must be inserted in club races as debated in the
House of Representatives in the voting of HB 5732/RA1502.

Held:

(1) No, the appellant has no vested right to the unreserved Sundays, or even to the 24 Saturdays (except
holidays) because their holding on races for these days are merely permissive, subject to the licensing
and determination by the GAB. When, therefore, RA 1502 was enacted increasing by 6 the sweepstakes
draw and races but without specifying the days for holding them, the GAB had no alternative except to
make room for the additional races, as it did, form among the only available racing days unreserved by
any law - the Sundays on which the private individuals and entities have been permitted to hold their
races, subject to licensing and determination by GAB.

(2) No. There is nothing in Republic Act No. 1502, as it was finally enacted, which would indicate that
such an understanding on the part of these two members of the Lower House of Congress were received
the sanction or conformity of their colleagues, for the law is absolutely devoid of any such indication.

In the interpretation of a legal document, especially a statute, unlike in the interpretation of an ordinary
written document, it is not enough to obtain information to the intention or meaning of the author or
authors, but also to see whether the intention or meaning has been expressed in such a way as to give it
legal effect and validity. In short, the purpose of the inquiry, is not only to know what the author meant
by the language he used, but also to see that the language used sufficiently expresses that meaning.

The language of Republic Act No. 1502 in authorizing the increase, clearly speaks of regular sweepstakes
draws and races. If the intention of Congress were to authorize additional sweepstakes draws only
which could, admittedly, be inserted in the club races, the law would not have included regular races;
and since regular sweepstakes races were specifically authorized, and it would be confusing,
inconvenient, if not impossible to mix these sweepstakes races with the regular club races all on the
same day (and it has never been done before), the conclusion seems inevitable that the additional
sweepstakes draws and races were intended to be held on a whole day, separate and apart from the
club races.

d. Where Legislative Intent is Ascertained

MANILA LODGE V COURT OF APPEALS

FACTS:

The Philippine Commission enacted Act No. 1306 which authorized the City of Manila to reclaim a portion of
Manila Bay. The reclaimed area was to form part of the Luneta extension. The act provided that the
reclaimed area shall be the property of the City of Manila, and the city is authorized to set aside a tract
of the reclaimed land for a hotel site and to lease or to sell the same. Later, the City of Manila conveyed
a portion of the reclaimed area to Petitioner. Then Petitioner sold the land, together with all the
improvements, to the Tarlac Development Corporation (TDC).
ISSUE:

W/N the subject property was patrimonial property of the City of Manila.

HELD:
The petitions were denied for lack of merit. The court found it necessary to analyze all the provisions of Act No.
1360, as amended, in order to unravel the legislative intent. The grant made by Act No. 1360 of the
reclaimed land to the City of Manila is a grant of a public nature. Such grants have always been strictly
construed against the grantee because it is a gratuitous donation of public money or resources, which
resulted in an unfair advantage to the grantee. In the case at bar, the area reclaimed would be filled at
the expense of the Insular Government and without cost to the City of Manila. Hence, the letter of the
statute should be narrowed to exclude matters which, if included, would defeat the policy of legislation.

MCC INDUSTRIAL SALES CORPORATION, petitioner, vs. SSANGYONG CORPORATION, respondents.

G.R. No. 170633; October 17, 2007

Facts:

Petitioner is engaged in the business of importing and wholesaling stainless steel products. One of its
suppliers is the responded, an international trading company with head office in Seoul, South Korea and
regional headquarters in Makati City, Philippines. The two corporations conducted business through
telephone calls and facsimile or telecopy transmissions. Respondent would send the pro forma invoices
containing the details of the steel product order to petitioner; if the latter conforms thereto, its
representative affixes his signature on the faxed copy and sends it back to the respondent, again by fax.

Respondent filed a civil action for damages due to breach of contract against petitioner before the
Regional Trial Court of Makati City. In its complaint, respondent alleged that defendants breached their
contract when they refused to open the letter of credit in the amount of US$170,000.00 for the
remaining 100MT of steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.

After respondent rested its case, petitioner filed a Demurrer to Evidence alleging that respondent failed
to present the original copies of the pro forma invoices on which the civil action was based. Petitioner
contends that the photocopies of the pro forma invoices presented by respondent Ssangyong to prove
the perfection of their supposed contract of sale are inadmissible in evidence and do not fall within the
ambit of R.A. No. 8792, because the law merely admits as the best evidence the original fax transmittal.
On the other hand, respondent posits that, from a reading of the law and the Rules on Electronic
Evidence, the original facsimile transmittal of the pro forma invoice is admissible in evidence since it is
an electronic document and, therefore, the best evidence under the law and the Rules. Respondent
further claims that the photocopies of these fax transmittals (specifically ST2-POSTS0401-1 and ST2-
POSTS0401-2) are admissible under the Rules on Evidence because the respondent sufficiently explained
the non-production of the original fax transmittals.

Issue:

Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence and
admissible as such?
Held:

Electronic document shall be regarded as the equivalent of an original document under the Best
Evidence Rule, as long as it is a printout or output readable by sight or other means, showing to reflect
the data accurately. Thus, to be admissible in evidence as an electronic data message or to be
considered as the functional equivalent of an original document under the Best Evidence Rule, the
writing must foremost be an electronic data message or an electronic document.

The Implementing Rules and Regulations (IRR) of R.A. No. 8792 defines the Electronic Data Message
refers to information generated, sent, received or stored by electronic, optical or similar means, but not
limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy.

The phrase but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or
telecopy in the IRRs definition of electronic data message is copied from the Model Law on
Electronic Commerce adopted by the United Nations Commission on International Trade Law
(UNCITRAL), from which majority of the provisions of R.A. No. 8792 were taken. While Congress deleted
this phrase in the Electronic Commerce Act of 2000, the drafters of the IRR reinstated it. The deletion by
Congress of the said phrase is significant and pivotal.

Moreover, when Congress formulated the term electronic data message, it intended the same
meaning as the term electronic record in the Canada law. This construction of the term electronic
data message, which excludes telexes or faxes, except computer-generated faxes, is in harmony with
the Electronic Commerce Laws focus on paperless communications and the functional equivalent
approach that it espouses. Facsimile transmissions are not, in this sense, paperless, but verily are
paper-based.

[I]n an ordinary facsimile transmission, there exists an original paper-based information or data that is
scanned, sent through a phone line, and re-printed at the receiving end. [I]n a virtual or paperless
environment, technically, there is no original copy to speak of, as all direct printouts of the virtual reality
are the same, in all respects, and are considered as originals. Ineluctably, the laws definition of
electronic data message, which, as aforesaid, is interchangeable with electronic document, could
not have included facsimile transmissions, which have an original paper-based copy as sent and a paper-
based facsimile copy as received. These two copies are distinct from each other, and have different legal
effects. While Congress anticipated future developments in communications and computer technology
when it drafted the law, it excluded the early forms of technology, like telegraph, telex and telecopy
(except computer-generated faxes, which is a newer development as compared to the ordinary fax
machine to fax machine transmission), when it defined the term electronic data message.

[T]he terms electronic data message and electronic document, as defined under the Electronic
Commerce Act of 2000, do not include a facsimile transmission. Accordingly, a facsimile transmission
cannot be considered as electronic evidence. It is not the functional equivalent of an original under the
Best Evidence Rule and is not admissible as electronic evidence.