CASE DIGEST FACTS CALTEX v PALOMAR

FACTS:

Caltex (Philippines) Inc. conceived and laid out the groundwork for a
promotional scheme which was dubbed “Caltex Hooded Pump Contest”, aiming
to increase patronage for its oil products. The contest called for participants to
estimate the number of liters a hooded gas pump at each Caltex station will
dispense during a specified period. Participation was to open to all "motor
vehicle owners and/or licensed drivers", except for Caltex employees, dealers,
advertising agency, and their immediate families. Only entry forms, available
upon request at each Caltex station, were needed. Neither fee nor purchase
was required prior to participating.

Foreseeing the extensive use of mails to publicize the contest and

transmit information, Caltex made representations with the postal authorities
to secure advanced clearance for mailing, having in view sections 1954(a), 1982
and 1983 of the Revised Administrative Code. Caltex, through its counsel,
advanced that the contest does not violate anti-lottery provisions of the Postal
Law.

The Postmaster General Enrico Palomar declined the grant of the

requested clearance with the opinion that the scheme falls within the purview
of the mentioned provisions, which prohibit the non-mailable matter of any
information regarding “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”. Caltex sought a reconsideration stressing that the
contest was not condemnable as a lottery because there is no consideration
involved on the part of any contestant.

Palomar maintained his position based on an unrelated case, with the

addition that the contest is also a "gift enterprise" which is equally banned by
the Postal Law. He threatened that if the contest was pursued, a fraud order
will be issued against Caltex.

Caltex filed a declaratory relief, and the trial court ruled that the contest
does not violate the Postal Code, and that the Postmaster General has no right
to bar the public distribution of the contest rules by the mails. The Postmaster
General appealed to the Supreme Court, hence this case.