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.