1. Caltex v. Palomar G.R. No.

L-19650 (1966)

Facts. In its promotional scheme entitled “Caltex Hooded Pump Contest”,

contenders would guess the amount of liters contained in a covered pump. To join,
participants need not purchase any Caltex products but only to request entry forms
from their local Caltex stations. Choosing winners would be of three-levels:
Dealer, Regional, and National Contest. At the first level, whoever has the closest
determinations of the hooded pump contents wins along with other two runner-ups
with corresponding prizes. First prize for Dealer Contest elevates to Regional and
the same mechanics of first, second, third prizes come into play. First prize from
the Regional goes to National Contest.

Foreseeing the imminent bulk use of mail for the scheme, Caltex asked postal
authorities to be cleared of some pertinent provisions in the Postal Law. The Postal
Law enumerates non-mailable matters, authorizes issuance of fraud order, and
identifies effect of violating said law. Some items under non-mailable matters are
advertising on lottery, gift enterprise, or other similar schemes. In response to
Caltex’s request, Postmaster Palomar denied Caltex’s plea saying that its scheme
falls under advertising for lottery, which constitute non-mailable matter. Caltex
asked for reconsideration; Postmaster reiterated his stance and added that if scheme
pushes through, fraud order would be served. Caltex sought judicial intervention.
And trial court ruled in their favor. Postmaster now appealed.

Issue. Does “Caltex Hooded Pump Contest” violate Postal Law?

Ruling: No. What is prohibited by the Postal Law is lottery, inter alia. Lottery
necessarily includes consideration, prize, and chance. Caltex’s contest does include
the elements of prize and chance but not consideration as no purchase is required
of participants. Is it a gift enterprise? Still no because no purchase. Lottery is
prohibited if there is consideration; thereby gift enterprise is also prohibited if there
is consideration, following noscitur a sociis. But as demonstrated, neither is
Caltex’s game a lottery nor a gift enterprise. Hence it should be allowed to
proceed.