G.R. No. L-19650 - Caltex , Inc. vs. Palomar

In 1960, Caltex (Philippines) Inc. launched a promotional scheme inviting motor vehicle owners and licensed drivers (excluding Caltex employees, dealers, advertising agency staff and their immediate families) to estimate the number of liters dispensed by a hooded pump at selected stations during a specified period.
No purchase or fee was required; entry forms were freely available at stations, and completed stubs were deposited in sealed cans.

Dealer Contest: At each station, prizes awarded to the closest three estimates (1st prize: 3-burner kerosene stove; 2nd: thermos bottle and lantern; 3rd: flashlight and tools). First-prize winners advanced to Regional Contest.
Regional Contest: Seven regions conducted drawings for cash prizes (P3,000/P2,000/P1,500 or P500/P300 for 1st–3rd, depending on stage). Regional first-prize winners proceeded to National Contest for final prizes and consolation awards.

Caltex, invoking sections 1954(a), 1982 and 1983 of the Revised Administrative Code, requested advance clearance to use the mails for contest publicity.
The Postmaster General, relying on Opinion 217 (1953) of the Secretary of Justice and relevant Postal Law provisions, denied clearance, classifying the scheme as a lottery or prohibited “gift enterprise,” and threatened a fraud order.

Caltex filed a petition for declaratory relief in the trial court, seeking (a) declaration that the contest did not violate the Postal Law and (b) an order permitting use of the mails for public distribution of contest rules.
The trial court upheld Caltex’s position; the respondent appealed to the Supreme Court.

Whether the petition states a sufficient cause of action for declaratory relief under Rule 66 (old) of the Rules of Court.
Whether the Caltex Hooded Pump Contest violates the Postal Law by constituting (a) a lottery or (b) a prohibited gift enterprise under sections 1954(a), 1982, and 1983 of the Revised Administrative Code.