Caltex V.

Palomar

Digest

Facts:

 In 1960 Caltex Philippines Inc. created a promotional scheme called “Caltex Hooded Pump
Contest”
 It is open to every motorcycle owners and/or licensed drivers except for the Caltex dealers,
employees and their immediate families.
 For the privilege to participate, no fee or consideration is required to be paid.
 Caltex viewed the sections 1954 (a) (absolutely non-mailable matter), 1982 (Fraud orders), and
1983 (deprivation of use of money order system and telegraphic system and telegraphic
transfer service) of the Revised Administrative Code.
 The overtures were formalized in a letter to the Post master general on October 31, 1960
where they enclosed a copy of the contest rules and the justification that it does not violate the
anti-lottery provision of the Postal Law.
 The Acting Postmaster General denied the requested clearance, because he opined that the
scheme falls on the purview of the provisions of the Postal Code.
 In December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that
there is no consideration involved, so it cannot be considered as lottery.
 Palomar relied on the opinion rendered by the Secretary of Justice on an unrelated case 7
years before (Opinion 217, series of 1953)
 The PM General maintained his view that the contest involves consideration, or if not, it is
nevertheless a “gift enterprise”, which is as well condemned by the Postal Code.
 He denied it in his letter of December 10, 1960 and threatened Caltex that he will issue them
fraud order.
 Caltex then invoked judicial intervention by filing for declaratory relief against the PM General,
and ordering the respondent to allow the petitioner to use the mails to inform the public of
their contest.

Decision of the Trial Court:

 The Petitioner does not violate the Postal Law and the respondent has no right to bar the public
distribution of said rules by mail.
 Respondent appealed

Issue:

 Whether or not the petition states a sufficient cause of action for declaratory relief
 Whether or not the proposed Caltex Hooded Pump contest violates Postal Law.

HELD: The judgement appealed from is AFFIRMED. No costs.

1. There’s need for declaratory relief as there’s a justiciable controversy, the interest of both
parties are adverse, the petitioner has a legal interest in the controversy, and the issue is ripe
for judicial determination.
2. The case is not an untrodden judicial path. In 1922, “El Debate Inc. Vs. Topacio, the court
declared that :
a. There are 3 essential elements of lottery, 1st is consideration, 2nd price, 3rd is chance.
b. Consideration: if there’s a payment for the chance, directly or indirectly. (people vs.
Cardas)
3. Gift enterprise: the Caltex did not as well ask for the requisite of buying their product prior to
the be given the chance to join.
4. Nowhere in the said rules that any fee be paid, any merchandise be bought, any service be
rendered.
5. The Court agreed that the contest is not a lottery.
6. And as well not a gift enterprise (though not yet spelled in explicit words), as there’s a
consensus among lexicographers that it is called a gift enterprise if a product is needed to be
bought in order to have the chance to win a price.