Case Summary (G.R. No. L-19650)
Petitioner
Caltex (Philippines) Inc., seeking a declaratory judgment that its “Caltex Hooded Pump Contest” does not violate postal prohibitions and that it may use the mails to publicize the contest.
Respondent
Enrico Palomar, Postmaster General, prohibiting postal dissemination under sections 1954(a), 1982, and 1983 of the Revised Administrative Code.
Key Dates
– Contest conceived and rules submitted: 1960
– Postal clearance denied: December 10, 1960
– Trial court decision favorable to Caltex: Date unspecified (prior to appeal)
– Supreme Court decision: 1966
Applicable Law
– Sections 1954(a), 1982, 1983, Revised Administrative Code (anti-lottery, mail fraud, and denial of postal services for prohibited schemes)
– Declaratory relief under Rule 66, Rules of Court (now Rule 64)
Background of the Contest
Caltex’s promotional scheme invited all motor‐vehicle owners or licensed drivers (excluding employees’ immediate families) to estimate total liters dispensed by a hooded pump during a specified period. Participation required no purchase or fee; entry forms were freely available, and winners at station, regional, and national levels received appliances, cash prizes, and an all-expenses-paid trip.
Postal Law Provisions
– Section 1954(a): Non-mailable matter includes written or printed advertising pertaining to lotteries, gift enterprises, or similar schemes involving chance.
– Section 1982: Director of Posts may issue “fraudulent” stamp orders to return suspect mail matter.
– Section 1983: Authority to deny postal money orders and telegraphic transfers to entities conducting prohibited schemes.
Procedural History
Caltex requested advance postal clearance (Oct. 31, 1960); the Acting Postmaster General denied. Caltex’s counsel sought reconsideration (Dec. 7, 1960); the Postmaster General reaffirmed denial and threatened fraud orders (Dec. 10, 1960). Caltex then filed for declaratory relief. The trial court ruled the contest lawful and ordered postal distribution permitted. The respondent filed an appeal.
Issue 1: Suitability of Declaratory Relief
Whether Caltex stated a justiciable cause of action to obtain a declaratory judgment construing the Postal Law.
Analysis on Declaratory Relief
The Court identified four requisites: (1) justiciable controversy; (2) adverse interests; (3) petitioner’s legal interest; (4) ripeness. All elements existed: Caltex’s right to use the mails was actively contested by the Postmaster General; actual letters and threats created a concrete dispute; judicial resolution was necessary to avoid either risking a fraud order or self-censorship. Precedents affirmed that entities facing threatened enforcement action may obtain declaratory relief.
Issue 2: Violation of the Postal Law
Whether the contest constitutes (a) a lottery or (b) a prohibited gift enterprise under the Revised Administrative Code.
Interpretation of “Lottery”
Citing El Debate, Inc. v. Topacio, the Court adopted the U.S. Supreme Court definition: a lottery requires (1) prize, (2) chance, and (3) consideration. The contest clearly involved prizes and chance; the sole question was consideration.
Absence of Consideration
Contest rules explicitly required no purchase, fee, or any value given to participate. Participants merely requested and submitted free entry forms. No direct or indirect consideration passed from contestants, distinguishing the scheme from a lottery.
Analysis of “Gift Enterprise”
Although some authorit
Case Syllabus (G.R. No. L-19650)
Facts of the Promotional Scheme
- In 1960, Caltex (Philippines) Inc. devised the “Caltex Hooded Pump Contest” to boost sales of its oil products.
- Open to all motor vehicle owners and licensed drivers, except Caltex employees, dealers, advertising-agency staff and their immediate families.
- Participation is free: no purchase of Caltex products, no fee or other consideration required.
- Entry forms are available on request at Caltex stations; sealed cans are provided for deposit of accomplished stubs.
- Three stages of competition:
- Dealer (station) Contest – closest estimates win kerosene stove (1st prize), thermos & hunter lantern (2nd), flashlight & screwdriver set (3rd).
- Regional Contest – first-prize dealers’ winners enter sealed-can drawing in seven regions; prizes are an all-expenses-paid Manila trip (1st), ₱500 (2nd), ₱300 (3rd).
- National Contest – seven regional first-prize winners’ stubs go into final drawing for ₱3,000 (1st), ₱2,000 (2nd), ₱1,500 (3rd) and ₱650 consolations.
Relevant Postal Law Provisions
- Section 1954(a) (Revised Administrative Code): absolutely non-mailable matter includes printed material “advertising, describing or in any manner pertaining to . . . any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance.”
- Section 1982: Director of Posts may issue “fraud orders” against any mail matter of a person or company engaging in lotteries or gift enterprises or conducting fraudulent schemes through the mails.
- Section 1983: Director of Posts may forbid issuance or payment of postal money orders or telegraphic transfers to persons or companies engaged in prohibited lotteries or gift enterprises.
Administrative Correspondence
- October 31, 1960: Caltex, through counsel, requested advance postal clearance with enclosed contest rules, arguing no violation of anti-lottery provisions.
- Acting Postmaster General denied clearance, deeming the contest a prohibited lottery or gift enterprise under the Pos