G.R. No. L-19650 September 29, 1966
CALTEX (PHILIPPINES), INC., petitioner-appellee, vs. ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

FACTS

In 1960, Caltex (Philippines), Inc. conceived the “Caltex Hooded Pump Contest” to promote its oil products. Participants, excluding Caltex employees, dealers, advertising agency personnel, and their immediate families, were to estimate the actual number of liters a hooded gas pump would dispense during a specified period. Participation was open to all motor vehicle owners and/or licensed drivers, with no entry fee or requirement to purchase Caltex products. Prizes were awarded at dealer, regional, and national levels, consisting of merchandise and cash. Caltex sought advance clearance from the Postmaster General to use the mails to publicize the contest, citing relevant provisions of the Revised Administrative Code (Sections 1954(a), 1982, and 1983) that prohibit mailing materials related to lotteries or gift enterprises. The Acting Postmaster General denied the request, opining the scheme violated the Postal Law, and threatened to issue a fraud order if the contest was conducted. Caltex filed a petition for declaratory relief, which the trial court granted, declaring the contest not violative of the Postal Law. The Postmaster General appealed.

ISSUE

1. Whether the petition states a sufficient cause of action for declaratory relief.
2. Whether the proposed “Caltex Hooded Pump Contest” violates the Postal Law.

RULING

1. Yes, the petition states a sufficient cause of action for declaratory relief. The conditions for declaratory relief are present: a justiciable controversy exists between parties with adverse interests; Caltex has a legal interest in the controversy; and the issue is ripe for judicial determination due to the Postmaster General’s threat to issue a fraud order, which created an active antagonistic assertion of legal rights.
2. No, the contest does not violate the Postal Law. The Court held that the contest is not a lottery or a prohibited gift enterprise because it lacks the essential element of “consideration.” Participation requires no fee, purchase, or valuable consideration from the contestant. The rules of chance involved do not, by themselves, constitute a lottery absent consideration. The term “gift enterprise” in the Postal Law must be construed in association with “lottery” (noscitur a sociis) and thus similarly requires consideration to be prohibitable. Since the contest is gratuitous and no consideration is derived from participants, it does not cultivate the gambling spirit sought to be suppressed by the law. The judgment of the trial court is affirmed.