G.R. No.

L-19650 September 29, 1966

CALTEX (PHILIPPINES, INC !". ENRIC# PAL#$AR, %& '%" ()p)(%t* )" THE P#ST$ASTER
GENERAL
+ACTS,
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
periodParticipants were not re!uired consideration nor pa" a fee #o purchase of Caltex products were also
re!uired to be made $ntr" forms were to be made a%ailable upon re!uest at each Caltex station where a
sealed can would be pro%ided for the deposit of accomplished entr" stubs
&oreseeing the extensi%e use of the mails not onl" as amongst the media for publici'ing the contest but also
for the transmission of communications relati%e thereto, representations were made b" Caltex with the
postal authorities for the contest to be cleared in ad%ance for mailing, ha%ing in %iew the (nti)lotter"
pro%isions of the *e%ised (dministrati%e Code Postmaster +eneral $nrico Palomar denied the re!uest,
arguing that the said contest %iolated the pro%isions of the law on sub,ect C(-.$/ sought ,udicial
inter%ention wherein the trial court ruled in its fa%or *espondent Palomar appealed, posing the same
argument that the said contest %iolated the prohibiti%e pro%isions of the Postal -aw
I""-e,
0hether or not the "Caltex Hooded Pump Contest" fell on the pur%iew of the prohibiti%e pro%isions of the
Postal -aw
H$-12
.he Postal -aw does not allow 3an" lotter", gift enterprise, or scheme for the distribution of mone", or of an"
real or personal propert" b" lot, chance, or drawing of an" 4ind"
.he Court held that the "Caltex Hooded Pump Contest" b" C(-.$/ is not a 3lotter"5 nor a 3gift enterprise5
but rather a gratuitous distribution of propert" b" chance, which the law does not prohibit .he term "lotter""
extends to all schemes for the distribution of pri'es b" chance, such as polic" pla"ing, gift exhibitions, pri'e
concerts, raffles at fairs, etc, and %arious forms of gambling .he three essential elements of a lotter" are2
&irst, consideration6 second, pri'e6 and third, chance .he contest in !uestion, lac4ing the element of
3consideration5, cannot be deemed al lotter" .he rules of the contest made no mention of a %aluable
consideration of some 4ind being paid directl" or indirectl" for the chance to draw a pri'e .he term 3gift
enterprise5 also could not embrace the scheme at bar (s alread" noted, there is no sale of an"thing to
which the chance offered is attached as an inducement to the purchaser .he contest is open to all !ualified
contestants irrespecti%e of whether or not the" bu" the appellee7s products
8" %irtue of noscitur a sociis which 9pinion :1; aforesaid also relied upon although onl" insofar as the
element of chance is concerned < it is onl" 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
lotter" is prohibited onl" if it in%ol%es a consideration, so also must the term "gift enterprise" be so construed
=ignificantl", there is not in the law the slightest indication of an" intent to eliminate that element of
consideration from the "gift enterprise" therein included
Caltex vs. Palomar
Corpus Juris Secundum

In 1960, Caltex announced its Caltex Hooded Pump Contest. The aim thereof is to let
participants estimate the actual numer of liters a hooded !as pump at each Caltex station
dispense durin! a specified period. In order to "oin, no fee or consideration is re#uired to
e paid, no purchase of Caltex products re#uired to e made. $ntr% forms are to e made
a&ailale upon re#uest at each Caltex station 'here a sealed can 'ill e pro&ided for the
deposit of accomplished entr% stus. (oreseein! the extensi&e use of the mails not onl% as
amon!st the media for pulici)in! the contest ut also for the transmission of
communications relati&e thereto, representations 'ere made % Caltex 'ith the postal
authorities for the contest to e cleared in ad&ance for mailin! and to ma*e sure that the
contest does not &iolate the anti+lotter% pro&ision of the ,e&ised -dministrati&e Code.
Palomar ho'e&er denied the mailin! of such contest rules accordin! to him &iolates the
said pro&ision. He contends that the contest can e su"ect to fraud order if pursued
ecause it falls under an% lotter%, !ift enterprise, or scheme for the distriution of
mone%, or of an% real or personal propert% % lot, chance, or dra'in! of an% *ind 'hich
is not allo'ed % the Postal .a'. Caltex referred the case to the trial court and the trial
court ruled in fa&or of Caltex. Palomar appealed ar!uin! that Caltex has no sufficient
cause of action to see* declarator% relief /and decisions can onl% e ad&isor% in nature0
and that the proposed contest does &iolate the Postal .a'.
ISSUE: 1hether or not the contest &iolates the Postal .a' /Chap 23 of the ,e&ised
-dministrati&e Code0.
HELD: The issue at ar cannot e passed upon. 4ud!ment has to e made other'ise
Caltex 'ill ha&e no definite recourse. Hence, Caltex has sufficient cause of action for
declarator% relief.
The term 5lotter%6 extends to all schemes for the distriution of pri)es % chance, such as
polic% pla%in!, !ift exhiitions, pri)e concerts, raffles at fairs,+etc., and &arious forms of
!amlin!. The three essential elements of a lotter% are7 (irst, consideration8 second,
pri)e8 and third, chance. The elements of pri)e and chance are too o&ious in the disputed
scheme to e the su"ect of contention. In respect to the last element of consideration, the
la' does not condemn the !ratuitous distriution of propert% % chance, if no
consideration is deri&ed directl% or indirectl% from the part% recei&in! the chance, ut
does condemn as criminal schemes in 'hich a &aluale consideration of some *ind is
paid directl% or indirectl% for the chance to dra' a pri)e. 9o'here in the said rules is an%
re#uirement that an% fee e paid, an% merchandise e ou!ht, an% ser&ice e rendered, or
an% &alue 'hatsoe&er e !i&en for the pri&ile!e to participate. The scheme does not onl%
appear to e, ut actuall% is, a !ratuitous distriution of propert% % chance. -nd that the
purchase of an% Caltex product is not a pre+re#uisite in "oinin! the said contest. (urther,
the re#uired element of consideration does not consist of the enefit deri&ed % the
proponent of the contest. The true test is 'hether the participant pa%s a &aluale
consideration for the chance, and not 'hether those conductin! the enterprise recei&e
somethin! of &alue in return for the distriution of the pri)e. Perspecti&e properl%
oriented, the standpoint of the contestant is all that matters, not that of the sponsor. The
follo'in!, culled from Corpus Juris Secundum, should set the matter at rest7 The fact
that the holder of the dra'in! expects there% to recei&e, or in fact does recei&e, some
enefit in the 'a% of patrona!e or other'ise, as a result of the dra'in!, does not suppl%
the element of consideration. :ratuitous distriution of propert% % lot or chance does not
constitute 5lotter%6, if it is not resorted to as a de&ice to e&ade the la' and no
consideration is deri&ed, directl% or indirectl%, from the part% recei&in! the chance,
!amlin! spirit not ein! culti&ated or stimulated there%. .otter% and !ift enterprise
must e construed as the same.