STATUTORY CONSTRUCTION INTERPRETATION

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.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a promotional scheme calculated
to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual number of
liters a hooded gas pump at each Caltex station will dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its
advertising agency, and their immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed
drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products required to be made. Entry forms
are to be made available upon request at each Caltex station where a sealed can will be provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose estimate is closest to the actual
number of liters dispensed by the hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third. Prizes at
this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite
flashlight with batteries and a screwdriver set for third. The first-prize winner in each station will then be qualified to join in the "Regional Contest" in
seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can from which the first-prize, second-
prize and third-prize winners of that region will be drawn. The regional first-prize winners will be entitled to make a three-day all-expenses-paid round trip
to Manila, accompanied by their respective Caltex dealers, in order to take part in the "National Contest". The regional second-prize and third-prize
winners will receive cash prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed
inside a sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash prizes in store for winners at
this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of communications
relative thereto, 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, the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes, whether sealed as first-class matter or not, shall
be imported into the Philippines through the mails, or to be deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any
officer or employee of the Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or purporting to convey any information
concerning any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for
obtaining any money or property of any kind by means of false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in conducting 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, or that any person or company is
conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses,
representations, or promises, the Director of Posts may instruct any postmaster or other officer or employee of the Bureau to return to the person,
depositing the same in the mails, with the word "fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of whatever class
mailed by or addressed to such person or company or the representative or agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director of Posts may, upon evidence satisfactory to
him that any person or company is engaged in conducting 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, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or
property of any kind through the mails by means of false or fraudulent pretenses, representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such person or company, whether such
agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the remitters of
the sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of
the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the
then Acting Postmaster General opined that the scheme falls within the purview of the provisions aforesaid and declined to grant the requested
clearance. In its counsel's letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery. Relying, however, on an opinion
rendered by the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General maintained his
view that the contest involves consideration, or that, if it does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in
his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest was
conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster General Enrico Palomar, praying
"that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to allow petitioner
the use of the mails to bring the contest to the attention of the public". After issues were joined and upon the respective memoranda of the parties, the
trial court rendered judgment as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest' announced to be conducted by the petitioner
under the rules marked as Annex B of the petitioner does not violate the Postal Law and the respondent has no right to bar the public distribution of said
rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a sufficient cause of action for
declaratory relief; and second, whether the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy at the time it was invoked,
declaratory relief is available to any person "whose rights are affected by a statute . . . to determine any question of construction or validity arising under
the . . . statute and for a declaration of his rights thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably
to established jurisprudence on the matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable controversy; (2) the
controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy;
and (4) the issue involved must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951;
Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The
gravamen of the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to assay the factual
bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in bold relief. The appellee
(Caltex), as a business enterprise of some consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail of all
appropriate media to advertise and stimulate increased patronage for its products. In contrast, the appellant, as the authority charged with the
enforcement of the Postal Law, admittedly has the power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud
orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-mailable schemes. Obviously pursuing its right aforesaid,
the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of information
thereon thru the mails, amongst other media, it was found expedient to request the appellant for an advance clearance therefor. However, likewise by
virtue of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed
scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the applicable statute was thus reached.
Communications in which the parties expounded on their respective theories were exchanged. The confidence with which the appellee insisted upon its
position was matched only by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by the appellant's open warning
to the appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim to the use of the mails for its
proposed contest, and the challenge thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live
controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic assertion of a legal right on one side and a denial thereof
on the other, concerning a real — not a mere theoretical — question or issue. The contenders are as real as their interests are substantial. To the
appellee, the uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to enhance its business.
To the appellant, the suppression of the appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an unavoidable
duty. With the appellee's bent to hold the contest and the appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by
the ominous shadow of an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y
Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is long past when it
can rightly be said that merely the appellee's "desires are thwarted by its own doubts, or by the fears of others" — which admittedly does not confer a
cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of
right which is actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36
Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said appellant "simply applied the
clear provisions of the law to a given set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The infirmity of
this pose lies in the fact that it proceeds from the assumption that, if the circumstances here presented, the construction of the legal provisions can be
divorced from the matter of their application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of discovering and
expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention is rendered doubtful,
amongst others, by reason of the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely the
case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably
requires an inquiry into the intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as any
other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing more than an advisory opinion
the handing down of which is anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the
disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal
issues susceptible of immediate resolution. With the battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which looms ahead (III Moran,
Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it
has been cast, would be to force it to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the
anti-lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the contest and uses the mails
for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with its concomitant stigma
which may attach even if the appellee will eventually be vindicated; if it abandons the contest, it becomes a self-appointed censor, or permits the
appellant to put into effect a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation
and in the spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court)
— which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights and duties under a law — we can see in
the present case any imposition upon our jurisdiction or any futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes that it will not have the final
and pacifying function that a declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this, he
obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code
of the Philippines). In effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become,
to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to abide thereby but also of those in
duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will terminate the controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In Liberty Calendar Co. vs. Cohen,
19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising was advised by the county prosecutor that its proposed sales
promotion plan had the characteristics of a lottery, and that if such sales promotion were conducted, the corporation would be subject to criminal
prosecution, it was held that the corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of
its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo,
Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.
In fine, we hold that the appellee has made out a case for declaratory relief.

2. 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". Upon these words hinges the resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly
dwelt on the power of the postal authorities under the abovementioned provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the United States Supreme Court, in
analogous cases having to do with the power of the United States Postmaster General, viz.: The term "lottery" extends to all schemes for the distribution
of prizes by chance, such as policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential
elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs.
Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39
Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed scheme to be the subject of
contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed down to the existence of the element of consideration
therein. Respecting this matter, our task is considerably lightened inasmuch as in the same case just cited, this Court has laid down a definitive yard-
stick in the following terms —

In respect to the last element of consideration, 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.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to participate therein is couched. Thus
—

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply estimate the actual number of liter the
Caltex gas pump with the hood at your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be
given for the privilege to participate. A prospective contestant has but to go to a Caltex station, request for the entry form which is available on demand,
and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any
discernible consideration which would brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance,
in order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra, p. 291), we find
none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a prize would actually be indirectly
paying a consideration for the privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of any Caltex
service were a pre-requisite to participation. But it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of
value.1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the sponsor in the way of increased
patronage by those who will be encouraged to prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The required
element of consideration does not consist of the benefit derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P.
2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting the
enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the standpoint of the contestant is all that
matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of patronage or otherwise, as a result
of the drawing; does not supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is not a lottery that may be
administratively and adversely dealt with under the Postal Law.

But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or
drawing of any kind", which is equally prescribed? Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration,
this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing effect as an instrument of both curative and
preventive justice. Recalling that the appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of
Justice, which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in which that element
is not essential, the determination of whether or not the proposed contest — wanting in consideration as we have found it to be — is a prohibited gift
enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a consensus among
lexicographers and standard authorities that the term is commonly applied to a sporting artifice of under which goods are sold for their market value but
by way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817;
Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128
Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly
cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep that the term "gift enterprise" is
capable of being extended, we think that the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are indeed
holding that a gift enterprise involving an award by chance, even in default of the element of consideration necessary to constitute a lottery, is prohibited
(E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive authorities declare that, like
a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs.
People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and
County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E.,
605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the fact that the specific
statutory provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used
interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration or chance has been specifically eliminated by statute.
(54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we derive from
this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the applicable statutory
provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the meaning of lottery settled,
and consonant to the well-known principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar
as the element of chance is concerned — it is only logical that the term under a construction should be accorded no other meaning than that which is
consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the
"gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof being an accepted extrinsic aid
in statutory construction. Mail fraud orders, it is axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed matters
which on grounds of public policy are declared non-mailable. As applied to lotteries, gift enterprises and similar schemes, justification lies in the
recognized necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa.
Super. 208). Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that where
no consideration is paid by the contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been held —

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a device to evade the law and no consideration
is derived, directly or indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones,
67 P. 2d., 286, 41 N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the prohibitive provisions of the
Postal Law which we have heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding none in the contest here in question, we rule that the appellee may not be denied the use of the mails for
purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex Hooded Pump Contest" as
described in the rules submitted by the appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

CASE DIGEST

Facts:
In the year 1960, Caltex conceived a promotional scheme and called it "Caltex Hooded Pump Contest". It calls for participants to estimate the actual
number of liters a hooded gas pump at each Caltex Station will dispense during a specified period. For the priviledge to participate, no fees or
consideration, nor purchase of Caltex products were required.

Forseeing the extensive use of mails relative to the contest, representations were made by Caltex with the postal authorities for the contest to be
cleared in advanced for mailing. The acting Postmaster General opined that the scheme falls within the purview of sections 1954, 1982 and 1983 of the
Revised Administrative Code and declined to grant the requested clearance.

Issues:
W/N construction should be employed in this case and W/N the contest violates the provisions of the Postal Law

Held:
Yes. Construction of a law is in order if what is in issue is an inquiry into the intended meaning of the words used in a certain law. As defined in
Black's Law Dictionary: Construction is the art or process of discovering and expounding the meaning and intention of the author's of the law with
respect to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for
in the law. In the present case, the prohibitive provisions of the Postal Law inescapably require an inquiry into the intended meaning of the words therein.
This is as much as question of construction or interpretation as any other. The Court is tasked to look beyond the fair exterior, to the substance, in order
to unmask the real element and pernicious tendencies that the law is seeking to prevent.

Lottery extends to all schemes for the distribution of prize by chance. The three essential elements of a lottery are: (1) consideration, (2) prize, and
(3) chance. Gift enterprise is commonly applied to a sporting artifice under which goods are sold for their market value but by way of inducement, each
purchaser is given a chance to win a prize. Gratuitous distribution of property by lot or chance does not constitute lottery. In the present case, the
element of consideration is not observed. No payment or purchase of a merchandise was required for the priviledge to participate
WHEN DO YOU APPLY THE PRINCIPLES OF STAT CON?

G.R. No. L-34568 March 28, 1988

RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO DAOANG, petitioners,
vs.
THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY and AMANDA RAMOS-AGONOY, respondents.

PADILLA, J.:

This is a petition for review on certiorari of the decision, dated 30 June 1971, rendered by the respondent judge * in Spec. Proc. No. 37 of Municipal
Court of San Nicolas, Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos; Antero Agonoy and Amanda R. Agonoy,
petitioners", the dispositive part of which reads, as follows:

Wherefore, Court renders judgment declaring that henceforth Quirino Bonilla and Wilson Marcos be, to all legitimate intents and purposes, the children
by adoption of the joint petitioners Antero Agonoy and Amanda R. Agonoy and that the former be freed from legal obedience and maintenance by their
respective parents, Miguel Bonilla and Laureana Agonoy for Quirino Bonilla and Modesto Marcos and Benjamina Gonzales for Wilson Marcos and their
family names 'Bonilla' and 'Marcos' be changed with "Agonoy", which is the family name of the petitioners.

Successional rights of the children and that of their adopting parents shall be governed by the pertinent provisions of the New Civil Code.

Let copy of this decision be furnished and entered into the records of the Local Civil Registry of San Nicolas, Ilocos Norte, for its legal effects at the
expense of the petitioners. 1

The undisputed facts of the case are as follows:

On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a petition with the Municipal Court of San Nicolas, Ilocos Norte, seeking
the adoption of the minors Quirino Bonilla and Wilson Marcos. The case, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos,
Antero Agonoy and Amanda Ramos-Agonoy, petitioners", was docketed therein as Spec. Proc. No. 37. 2

The petition was set for hearing on 24 April 1971 and notices thereof were caused to be served upon the office of the Solicitor General and ordered
published in the ILOCOS TIMES, a weekly newspaper of general circulation in the province of Ilocos Norte, with editorial offices in Laoag City. 3

On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father and guardian ad litem, the petitioners herein, filed an opposition to
the aforementioned petition for adoption, claiming that the spouses Antero and Amanda Agonoy had a legitimate daughter named Estrella Agonoy,
oppositors' mother, who died on 1 March 1971, and therefore, said spouses were disqualified to adopt under Art. 335 of the Civil Code. 4

After the required publication of notice had been accomplished, evidence was presented. Thereafter, the Municipal Court of San Nicolas, Ilocos Norte
rendred its decision, granting the petition for adoption. 5

Hence, the present recourse by the petitioners (oppositors in the lower court).

The sole issue for consideration is one of law and it is whether or not the respondent spouses Antero Agonoy and Amanda Ramos-Agonoy are
disqualified to adopt under paragraph (1), Art. 335 of the Civil Code.

The pertinent provision of law reads, as follows:

Art. 335. The following cannot adopt:

(1) Those who have legitimate, legitimated, acknowledged natural children, or children by legal fiction;

xxx xxx xxx

In overruling the opposition of the herein petitioners, the respondents judge held that "to add grandchildren in this article where no grandchil is included
would violate to (sic) the legal maxim that what is expressly included would naturally exclude what is not included".

But, it is contended by the petitioners, citing the case of In re Adoption of Millendez,6 that the adoption of Quirino Bonilla and Wilson Marcos would not
only introduce a foreign element into the family unit, but would result in the reduction of their legititimes. It would also produce an indirect, permanent and
irrevocable disinheritance which is contrary to the policy of the law that a subsequent reconciliation between the offender and the offended person
deprives the latter of the right to disinherit and renders ineffectual any disinheritance that may have been made.

We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code, in enumerating the persons who cannot adopt, are clear and
unambiguous. The children mentioned therein have a clearly defined meaning in law and, as pointed out by the respondent judge, do not include
grandchildren.

Well known is the rule of statutory construction to the effect that a statute clear and unambiguous on its face need not be interpreted; stated otherwise,
the rule is that only statutes with an ambiguous or doubtful meaning may be the subject of statutory construction. 7

Besides, it appears that the legislator, in enacting the Civil Code of the Philippines, obviously intended that only those persons who have certain classes
of children, are disqualified to adopt. The Civil Code of Spain, which was once in force in the Philippines, and which served as the pattern for the Civil
Code of the Philippines, in its Article 174, disqualified persons who have legitimate or legitimated descendants from adopting. Under this article, the
spouses Antero and Amanda Agonoy would have been disqualified to adopt as they have legitimate grandchildren, the petitioners herein. But, when the
Civil Code of the Philippines was adopted, the word "descendants" was changed to "children", in paragraph (1) of Article 335.

Adoption used to be for the benefit of the adoptor. It was intended to afford to persons who have no child of their own the consolation of having one, by
creating through legal fiction, the relation of paternity and filiation where none exists by blood relationship. 8 The present tendency, however, is geared
more towards the promotion of the welfare of the child and the enhancement of his opportunities for a useful and happy life, and every intendment is
sustained to promote that objective.9 Under the law now in force, having legitimate, legitimated, acknowledged natural children, or children by legal
fiction, is no longer a ground for disqualification to adopt. 10

WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San Nicolas, Ilocos Norte in Spec. Proc. No. 37 is AFFIRMED. Without
pronouncement as to costs in this instance.

SO ORDERED.

CASE DIGEST

Facts:
Petitioners are grandchildren of private respondents Agonoy. Private respondents filed a petition before the MTC of San Nicolas seeking adoption of
two minors. Petitioners filed an opposition to the adoption invoking the provisions of the Civil Code. That the respondents have a legitimate child, the
mother of the petitioners, now deceased, as such they are not qualified to adopt as per Article 335 of the aforesaid Code. The petition for adoption was
granted. Hence, this petition.

Issue:
Whether or not private respondents are disqualified to adopt under paragraph 1 of Art. 335.

Held:
No. The provision invoked by the petitioners is clear and unambiguous. Therefore, no construction or interpretation should be made. To add
“grandchildren” in this article where no such word is included would be in violation to the legal maxim that what is expressly included would naturally
exclude what is not included.
WHEN DO YOU APPLY THE PRINCIPLES OF STAT CON?

G.R. No. 189600 June 29, 2010

MILAGROS E. AMORES, Petitioner,

vs.
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and EMMANUEL JOEL J. VILLANUEVA, Respondents.

DECISION

CARPIO MORALES, J.:

Via this petition for certiorari, Milagros E. Amores (petitioner) challenges the Decision of May 14, 2009 and Resolution No. 09-130 of August 6, 2009 of
the House of Representatives Electoral Tribunal (public respondent), which respectively dismissed petitioner’s Petition for Quo Warranto questioning the
legality of the assumption of office of Emmanuel Joel J. Villanueva (private respondent) as representative of the party-list organization Citizens’ Battle
Against Corruption (CIBAC) in the House of Representatives, and denied petitioner’s Motion for Reconsideration.

In her Petition for Quo Warranto1 seeking the ouster of private respondent, petitioner alleged that, among other things, private respondent assumed
office without a formal proclamation issued by the Commission on Elections (COMELEC); he was disqualified to be a nominee of the youth sector of
CIBAC since, at the time of the filing of his certificates of nomination and acceptance, he was already 31 years old or beyond the age limit of 30 pursuant
to Section 9 of Republic Act (RA) No. 7941, otherwise known as the Party-List System Act; and his change of affiliation from CIBAC’s youth sector to its
overseas Filipino workers and their families sector was not effected at least six months prior to the May 14, 2007 elections so as to be qualified to
represent the new sector under Section 15 of RA No. 7941.

Not having filed his Answer despite due notice, private respondent was deemed to have entered a general denial pursuant to public respondent’s
Rules.2

As earlier reflected, public respondent, by Decision of May 14, 2009,3 dismissed petitioner’s Petition for Quo Warranto, finding that CIBAC was among
the party-list organizations which the COMELEC had partially proclaimed as entitled to at least one seat in the House of Representatives through
National Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 2007. It also found the petition which was filed on October 17, 2007 to be out of
time, the reglementary period being 10 days from private respondent’s proclamation.

Respecting the age qualification for youth sectoral nominees under Section 9 of RA No. 7941, public respondent held that it applied only to those
nominated as such during the first three congressional terms after the ratification of the Constitution or until 1998, unless a sectoral party is thereafter
registered exclusively as representing the youth sector, which CIBAC, a multi-sectoral organization, is not.

In the matter of private respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their families sector, public
respondent held that Section 15 of RA No. 7941 did not apply as there was no resultant change in party-list affiliation.

Her Motion for Reconsideration having been denied by Resolution No. 09-130 dated August 6, 2009,4 petitioner filed the present Petition for Certiorari.5

Petitioner contends that, among other things, public respondent created distinctions in the application of Sections 9 and 15 of RA No. 7941 that are not
found in the subject provisions, fostering interpretations at war with equal protection of the laws; and NBC Resolution No. 07-60, which was a partial
proclamation of winning party-list organizations, was not enough basis for private respondent to assume office on July 10, 2007, especially considering
that he admitted receiving his own Certificate of Proclamation only on December 13, 2007.

In his Comment,6 private respondent avers in the main that petitioner has not substantiated her claims of grave abuse of discretion against public
respondent; and that he became a member of the overseas Filipinos and their families sector years before the 2007 elections.

It bears noting that the term of office of party-list representatives elected in the May, 2007 elections will expire on June 30, 2010. While the petition has,
thus, become moot and academic, rendering of a decision on the merits in this case would still be of practical value.7

The Court adopts the issues framed by public respondent, to wit: (1) whether petitioner’s Petition for Quo Warranto was dismissible for having been filed
unseasonably; and (2) whether Sections 9 and 15 of RA No. 7941 apply to private respondent.

On the first issue, the Court finds that public respondent committed grave abuse of discretion in considering petitioner’s Petition for Quo Warranto filed
out of time. Its counting of the 10-day reglementary period provided in its Rules8 from the issuance of NBC Resolution No. 07-60 on July 9, 2007 is
erroneous.

To be sure, while NBC Resolution No. 07-60 partially proclaimed CIBAC as a winner in the May, 2007 elections, along with other party-list
organizations,9 it was by no measure a proclamation of private respondent himself as required by Section 13 of RA No. 7941.

Section 13. How Party-List Representatives are Chosen. Party-list representatives shall be proclaimed by the COMELEC based on the list of names
submitted by the respective parties, organizations, or coalitions to the COMELEC according to their ranking in said list.

AT ALL EVENTS, this Court set aside NBC Resolution No. 07-60 in Barangay Association for National Advancement and Transparency v. COMELEC10
after revisiting the formula for allocation of additional seats to party-list organizations.

Considering, however, that the records do not disclose the exact date of private respondent’s proclamation, the Court overlooks the technicality of
timeliness and rules on the merits. Alternatively, since petitioner’s challenge goes into private respondent’s qualifications, it may be filed at anytime
during his term.

Qualifications for public office are continuing requirements and must be possessed not only at the time of appointment or election or assumption of office
but during the officer's entire tenure. Once any of the required qualifications is lost, his title may be seasonably challenged.11

On the second and more substantial issue, the Court shall first discuss the age requirement for youth sector nominees under Section 9 of RA No. 7941
reading:
Section 9. Qualifications of Party-List Nominees. No person shall be nominated as party-list representative unless he is a natural-born citizen of the
Philippines, a registered voter, a resident of the Philippines for a period of not less than one (1)year immediately preceding the day of the election, able
to read and write, a bona fide member of the party or organization which he seeks to represent for at least ninety (90) days preceding the day of the
election, and is at least twenty-five (25) years of age on the day of the election.

In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the day of the election. Any
youth sectoral representative who attains the age of thirty (30) during his term shall be allowed to continue in office until the expiration of his term.
(Emphasis and underscoring supplied.)

The Court finds no textual support for public respondent’s interpretation that Section 9 applied only to those nominated during the first three
congressional terms after the ratification of the Constitution or until 1998, unless a sectoral party is thereafter registered exclusively as representing the
youth sector.

A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for construction or
interpretation. There is only room for application.12

As the law states in unequivocal terms that a nominee of the youth sector must at least be twenty-five (25) but not more than thirty (30) years of age on
the day of the election, so it must be that a candidate who is more than 30 on election day is not qualified to be a youth sector nominee. Since this
mandate is contained in RA No. 7941, the Party-List System Act, it covers ALL youth sector nominees vying for party-list representative seats.

As petitioner points out, RA No. 7941 was enacted only in March, 1995. There is thus no reason to apply Section 9 thereof only to youth sector
nominees nominated during the first three congressional terms after the ratification of the Constitution in 1987. Under this interpretation, the last
elections where Section 9 applied were held in May, 1995 or two months after the law was enacted. This is certainly not sound legislative intent, and
could not have been the objective of RA No. 7941.

There is likewise no rhyme or reason in public respondent’s ratiocination that after the third congressional term from the ratification of the Constitution,
which expired in 1998, Section 9 of RA No. 7941 would apply only to sectoral parties registered exclusively as representing the youth sector. This
distinction is nowhere found in the law. Ubi lex non distinguit nec nos distinguire debemus. When the law does not distinguish, we must not
distinguish.13

Respecting Section 15 of RA No. 7941, the Court fails to find even an iota of textual support for public respondent’s ratiocination that the provision did
not apply to private respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their families sector as there was no
resultant change in party-list affiliation. Section 15 reads:

Section 15. Change of Affiliation; Effect. Any elected party-list representative who changes his political party or sectoral affiliation during his term of office
shall forfeit his seat: Provided, That if he changes his political party or sectoral affiliation within six (6) months before an election, he shall not be eligible
for nomination as party-list representative under his new party or organization. (emphasis and underscoring supplied.)

What is clear is that the wording of Section 15 covers changes in both political party and sectoral affiliation. And the latter may occur within the same
party since multi-sectoral party-list organizations are qualified to participate in the Philippine party-list system. Hence, a nominee who changes his
sectoral affiliation within the same party will only be eligible for nomination under the new sectoral affiliation if the change has been effected at least six
months before the elections. Again, since the statute is clear and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This is the plain meaning rule or verba legis, as expressed in the maxim index animi sermo or speech is the index of intention.14

It is, therefore, beyond cavil that Sections 9 and 15 of RA No. 7941 apply to private respondent.

The Court finds that private respondent was not qualified to be a nominee of either the youth sector or the overseas Filipino workers and their families
sector in the May, 2007 elections.

The records disclose that private respondent was already more than 30 years of age in May, 2007, it being stipulated that he was born in August,
1975.15 Moreover, he did not change his sectoral affiliation at least six months before May, 2007, public respondent itself having found that he shifted to
CIBAC’s overseas Filipino workers and their families sector only on March 17, 2007.161avvphi1

That private respondent is the first nominee of CIBAC, whose victory was later upheld, is of no moment. A party-list organization’s ranking of its
nominees is a mere indication of preference, their qualifications according to law are a different matter.

It not being contested, however, that private respondent was eventually proclaimed as a party-list representative of CIBAC and rendered services as
such, he is entitled to keep the compensation and emoluments provided by law for the position until he is properly declared ineligible to hold the same.17

WHEREFORE, the petition is GRANTED. The Decision dated May 14, 2009 and Resolution No. 09-130 dated August 6, 2009 of the House of
Representatives Electoral Tribunal are SET ASIDE. Emmanuel Joel J. Villanueva is declared ineligible to hold office as a member of the House of
Representatives representing the party-list organization CIBAC.

SO ORDERED.

CASE DIGEST

SUMMARY:Petition to declare Villanueva as ineligible to hold office as representative of CIBAC for being overage to represent youth. Change of
affiliation must be made six months before elections. Youth sector is represented by 25 30.

FACTS: 5/14/2009: Petition for certiorari challenging the assumption of office of one Emmanuel Joel Villanueva as representative of CIBAC in the HoR.
Petitioner argues: Villanueva was 31 at the time of filing of nomination, beyond the age limit of 30 which was the limit imposed by RA 7941 for "youth
sector". Villanueva's change of affiliation from Youth Sector to OFW and families not affected six months prior to elections. Respondent argues: RA 7941
requirement for "age" for youth sector representative only applicable to first three elections after the party list act. There was no resultant change in
affiliation.

ISSUE: Whether the requirement for youth sector representatives apply to respondent Villanueva
RULING: Villauneva ineligible to hold office as a member of HoR representing CIBACHELD: Villanueva's arguments are invalid. The law is clear. If
representative of youth sector, should be between 25 to 30. Villanueva is ineligible to also represent OFW. Sectoral representation should be changed
SIX MONTHS prior to elections.