Caltex vs. Palomar (G.R.

L-19650, 09/29/1966)

FACTS:

Caltex conceived a promotional scheme which will increase its patronage for oil products called
“Caltex Hooded Pump Contest.” The contest calls for participants to estimate the number of liters a
hooded gas pump at each Caltex station will dispense during a specified period. To participate, entry
forms are only needed which can be made available upon request at each Caltex station. No fee is
required to be paid nor purchase has to be made prior to participating. Foreseeing the extensive use
of mails to publicize the promotional scheme, Caltex made representations with the postal
authorities to secure advanced clearance for mailing. Caltex, through its counsel, posited that the
contest does not violate anti-lottery provisions of the Postal Law. The Postmaster General Palomar
declined the grant of the requested clearance. Caltex sought a reconsideration. Palomar maintained
that if the contest was pursued, a fraud order will be issued against Caltex. Thus, this case at bar.

ISSUES:

1. Whether or not the petition states a sufficient cause of action for declaratory relief
2. Whether or not the proposed contest violates the Postal Law

RULINGS:

The Court held that the petition states a sufficient cause of action for declaratory relief since it
qualifies for the 4 requisites on invoking declaratory relief available to any person whose rights are
affected by a statute to determine any question of construction or validity. To the petitioner, the
construction hampers or disturbs its freedom to enhance its business while to the respondent,
suppression of the petitioner’s proposed contest believed to transgress the law he has sworn to
uphold and enforce is an unavoidable duty.

Likewise, using the rules of Statutory Construction in discovering the meaning and intention of the
authors in a case clouded with doubt as to its application, it was held that the promotional scheme
does not violate the Postal Law in that it does not entail lottery or gift enterprise. Using the principle
“noscitur a sociis’, the term under construction shall be understood by the words preceding and
following it. Thus, using the definitions of lottery and gift enterprise which both has the requisites of
prize, chance and consideration, the promo contest does not clearly violate the Postal Law because
of lack of consideration.