STATCON BATCH 4
A. DEFINITION
1. CALTEX (PHILS) VS PALOMAR; G.R. No. 19650, 29 September 1996
FACTS: In 1960, Caltex launched their "Caltex Hooded Pump Contest", which called for participants to
estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a
specified period.Participants were neither required consideration nor to pay a fee. No purchase of Caltex
products were also required to be made. Entry forms were to be made available upon request at each
Caltex station where a sealed can would be provided for the deposit of accomplished entry stubs.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but
also for the transmission of communications relative thereto, representations were made by Caltex with
the postal authorities for the contest to be cleared in advance for mailing, having in view the Anti-lottery
provisions of the Revised Administrative Code. Postmaster General Enrico Palomar denied the request,
arguing that the said contest violated the provisions of the law on subject. CALTEX sought judicial
intervention wherein the trial court ruled in its favor. Respondent Palomar appealed, posing the same
argument that the said contest violated the prohibitive provisions of the Postal Law.
ISSUE:
1. Whether or not the "Caltex Hooded Pump Contest" fell on the purview of the prohibitive provisions of
the Postal Law.
2. 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?
3. Is the Contest Scheme a Gift Enterprise?
HELD:
1. NO. The Postal Law does not allow “any lottery, gift enterprise, or scheme for the distribution of money,
or of any real or personal property by lot, chance, or drawing of any kind".The Court held that the "Caltex
Hooded Pump Contest" by CALTEX is not a “lottery” nor a “gift enterprise” but rather a gratuitous
distribution of property by chance, which the law does not prohibit. 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. The contest in question, lacking the element of
“consideration”, cannot be deemed a lottery. The rules of the contest made no mention of a valuable
consideration of some kind being paid directly or indirectly for the chance to draw a prize. The term “gift
enterprise” also could not 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 products.
By virtue of 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 indication of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.
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.
2. 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.
3. NO. 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 appellee’s products.
