Caltex v. PalomarGr No. L-19650

Author: Patrick V. ArcellanaPetition: For Declaratory ReliefPetitioner/appellee: Caltex (Philippines) Inc.Respondent/Appellant: Enrico Palomar (The Postmaster General)Potente: Castro, J.

Doctrine: Statutory Construction

FACTS: 1. 1960- Caltex Philippines created a promotional scheme (Caltex Hooded Pump Contest) in which contestants estimate the actual number of liters a hooded gas pump of a Caltex Station will dispense during a specified period.

2. Participation is for all motor vehicle owners and/or licensed drivers and requires no fee or consideration and no purchase of Caltex Products to be made. Entry forms are to be made available upon request at each Caltex Station in which accomplished entry stubs will be deposited in a sealed can.

3. With the use of mails as a media of publicizing of the contest and transmission of communications relative hereto, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code.

4. Caltex sent a letter with the contest rules to the Postmaster General to justify its position of the non-violation of the contest in the provisions of the Postal law.

5. Palomar opined that the scheme falls within the jurisdiction of the provisions and declined the request. Caltex sought reconsideration because there was no consideration in the part of any contestant and therefore the contest was not a lottery but Palomar contested that it is also considered a gift enterprise and also under the provisions of the Postal Law.

6. Caltex sought a declaratory relief against Palomar praying that the contest not be violative of the Postal Law and allow Caltex to use mail for publicity of the contest.

ISSUES: 1. WON the petition states a sufficient cause of action for declaratory relief.2. WON the Caltex Hooded Pump Contest violates the Postal Law.

PROVISIONS:

The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a), 1982 and 1983 thereof,supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning "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"

RULING + RATIO:

1. YES. There is sufficient cause for declaratory Relief.

-Declaratory Relief is available to any person whose right are affected by a statute to determine any question of construction under a statute and for a declaration of his right thereunder. There are 4 conditions for declaratory relief to be granted.a. There must be a justiciable controversyi. In this case, there is a justiciable controversy because Caltexs assertion of its claim to use mail for its contest and the consequent denial of Palomar to grant the privilege demanded caused the controversy.b. Controversy must be between persons whose interests are adversei. Freedom to enhance business of Caltex v. Palomars enforcement of an unavoidable duty. ii. Active antagonistic assertion of a legal right on one side (Caltex) and a denial thereof on the other (Postmaster General).c. The party seeking declaratory relief must have a legal interest in the controversyi. Caltex has a legal interest for if it is denied declaratory relief it would be forced undesirable alternatives.1. Launch the contest- will be at risk or threatened by a certain imposition of a fraud order2. Abandon the contest- becomes a self-appointed censor and allows Palomar to implement a virtual fiat of previous censorship that is constitutionally unwarranted.d. The issue involved must be ripe for judicial determination. i. The disagreement is no longer nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution. The immediate resolution of the case cannot be avoided anymore.

2. NO. There is no violation of the Postal law.

A Lottery has three essential elements and these are: Consideration, Prize and Chance. The contest presents the element of Prize and Chance. The court also states that the law does not condemn the gratuitous distribution of property by chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize. There is nowhere in the rules wherein any fee must be paid or any merchandise must be bought in order to participate. Therefore the contest fails to exhibit any consideration to label it as a lottery. It is actually a gratuitous distribution of property by chance. It is also not a gift enterprise because like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration. A gift enterprise is defined as goods that are sold for their market value but by way of inducement each purchaser is given a chance to win a prize. Since there is no consideration, it cannot also be considered a gift enterprise.

DISPOSITION: Petition granted.