Caltex vs.

Palomar
GR No. No. L-19650
September 29, 1966

In 1960 Caltex launched "Caltex Hooded Pump Contest that calls for
participants to estimate the actual number of liters a hooded gas pump at each
Caltex station. No fee or consideration is required to be paid, no purchase of
Caltex products required to be made. Entry forms are to be made available upon
request at each Caltex station where a sealed can will be provided for the deposit
of accomplished entry stubs. Foreseeing the advantage of using mail to promote
the contest, representations were made by Caltex with the postal authorities for
the contest to be cleared in view of Anti-lottery provisions of the Revised
Administrative Code. Caltex sent a letter to the Postmaster General and justified
its position that the contest does not violate the postal law. The Acting Postmaster
General denied the request because it falls within the said law. Caltex sought
reconsideration but the Postmaster General maintained his view. Caltex filed a
petition for declaratory relief with the trial court, ordering respondent to allow
petitioner to use the mails to bring the contest to the attention of the public. The
RTC held in favor of Caltex. Respondent Palomar appealed, posing the same
argument that the said contest violated the prohibitive provisions of the Postal
Law.

Issue:
Whether or not the "Caltex Hooded Pump Contest" violated the Postal Law

Held:
No. 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.
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. Its elements are (1) consideration, (2) prize and (3) chance. The contest fails
to exhibit any discernible consideration which would brand it as a lottery because
no fee is being paid by contestants to join the contest. The true test required for
the element to be considered consideration is "whether the participant pays a
valuable consideration for the chance", and not whether those conducting receive
something of value in return for the distribution of the prize. The contest cannot
be considered a gift enterprise as well because of the principle of noscitur a sociis
(company of words) which means that 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 the term "gift enterprise"