Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-19650 September 29, 1966
CALTEX P!"L"PP"NES#, "NC., petitioner-appellee,
vs.
ENR"CO PALOMAR, $% &$' ()p)($t* )' T!E POSTMASTER GENERAL, respondent-appellant.
Office of the Solicitor General for respondent and appellant.
Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:
In the year !"# the Calte$ %Philippines& Inc. %hereinafter referred to as Calte$& conceived and
laid the 'round(or) for a pro*otional sche*e calculated to dru* up patrona'e for its oil products.
+eno*inated ,Calte$ -ooded Pu*p Contest,, it calls for participants therein to esti*ate the actual
nu*ber of liters a hooded 'as pu*p at each Calte$ station (ill dispense durin' a specified period.
E*ployees of the Calte$ %Philippines& Inc., its dealers and its advertisin' a'ency, and their
i**ediate fa*ilies e$cepted, participation is to be open indiscri*inately to all ,*otor vehicle o(ners
and.or licensed drivers,. /or the privile'e to participate, no fee or consideration is re0uired to be
paid, no purchase of Calte$ products re0uired to be *ade. Entry for*s are to be *ade available
upon re0uest at each Calte$ station (here a sealed can (ill be provided for the deposit of
acco*plished entry stubs.
A three-sta'ed (inner selection syste* is envisioned. At the station level, called ,+ealer
Contest,, the contestant (hose esti*ate is closest to the actual nu*ber of liters dispensed by the
hooded pu*p thereat is to be a(arded the first pri1e2 the ne$t closest, the second2 and the ne$t, the
third. Pri1es at this level consist of a 3-burner )erosene stove for first2 a ther*os bottle and a Ray-4-
5ac hunter lantern for second2 and an Everready Ma'net-lite flashli'ht (ith batteries and a
scre(driver set for third. 6he first-pri1e (inner in each station (ill then be 0ualified to 7oin in the
,Re'ional Contest, in seven different re'ions. 6he (innin' stubs of the 0ualified contestants in each
re'ion (ill be deposited in a sealed can fro* (hich the first-pri1e, second-pri1e and third-pri1e
(inners of that re'ion (ill be dra(n. 6he re'ional first-pri1e (inners (ill be entitled to *a)e a three-
day all-e$penses-paid round trip to Manila, acco*panied by their respective Calte$ dealers, in order
to ta)e part in the ,National Contest,. 6he re'ional second-pri1e and third-pri1e (inners (ill receive
cash pri1es of P8## and P3##, respectively. At the national level, the stubs of the seven re'ional
first-pri1e (inners (ill be placed inside a sealed can fro* (hich the dra(in' for the final first-pri1e,
second-pri1e and third-pri1e (inners (ill be *ade. Cash pri1es in store for (inners at this final sta'e
are9 P3,### for first2 P:,### for second2 Pl,8## for third2 and P"8# as consolation pri1e for each of
the re*ainin' four participants.
/oreseein' the e$tensive use of the *ails not only as a*on'st the *edia for publici1in' the
contest but also for the trans*ission of co**unications relative thereto, representations (ere *ade
by Calte$ (ith the postal authorities for the contest to be cleared in advance for *ailin', havin' in
vie( sections !8;%a&, !<: and !<3 of the Revised Ad*inistrative Code, the pertinent provisions
of (hich read as follo(s9
=EC6I4N !8;. Absolutely non-mailable matter. > No *atter belon'in' to any of the
follo(in' classes, (hether sealed as first-class *atter or not, shall be i*ported into the
Philippines throu'h the *ails, or to be deposited in or carried by the *ails of the Philippines,
or be delivered to its addressee by any officer or e*ployee of the Bureau of Posts9
?ritten or printed *atter in any for* advertisin', describin', or in any *anner
pertainin' to, or conveyin' or purportin' to convey any infor*ation concernin' any lottery,
'ift enterprise, or si*ilar sche*e dependin' in (hole or in part upon lot or chance, or any
sche*e, device, or enterprise for obtainin' any *oney or property of any )ind by *eans of
false or fraudulent pretenses, representations, or pro*ises.
,=EC6I4N !<:. Fraud orders.>@pon satisfactory evidence that any person or
co*pany is en'a'ed in conductin' any lottery, 'ift enterprise, or sche*e for the distribution
of *oney, or of any real or personal property by lot, chance, or dra(in' of any )ind, or that
any person or co*pany is conductin' any sche*e, device, or enterprise for obtainin' *oney
or property of any )ind throu'h the *ails by *eans of false or fraudulent pretenses,
representations, or pro*ises, the +irector of Posts *ay instruct any post*aster or other
officer or e*ployee of the Bureau to return to the person, depositin' the sa*e in the *ails,
(ith the (ord ,fraudulent, plainly (ritten or sta*ped upon the outside cover thereof, any *ail
*atter of (hatever class *ailed by or addressed to such person or co*pany or the
representative or a'ent of such person or co*pany.
=EC6I4N !<3. Deprivation of use of money order system and teleraphic transfer
service.>6he +irector of Posts *ay, upon evidence satisfactory to hi* that any person or
co*pany is en'a'ed in conductin' any lottery, 'ift enterprise or sche*e for the distribution of
*oney, or of any real or personal property by lot, chance, or dra(in' of any )ind, or that any
person or co*pany is conductin' any sche*e, device, or enterprise for obtainin' *oney or
property of any )ind throu'h the *ails by *eans of false or fraudulent pretenses,
representations, or pro*ise, forbid the issue or pay*ent by any post*aster of any postal
*oney order or tele'raphic transfer to said person or co*pany or to the a'ent of any such
person or co*pany, (hether such a'ent is actin' as an individual or as a fir*, ban),
corporation, or association of any )ind, and *ay provide by re'ulation for the return to the
re*itters of the su*s na*ed in *oney orders or tele'raphic transfers dra(n in favor of such
person or co*pany or its a'ent.
6he overtures (ere later for*ali1ed in a letter to the Post*aster Aeneral, dated 4ctober 3,
!"#, in (hich the Calte$, thru counsel, enclosed a copy of the contest rules and endeavored to
7ustify its position that the contest does not violate the anti-lottery provisions of the Postal Ba(.
@ni*pressed, the then Actin' Post*aster Aeneral opined that the sche*e falls (ithin the purvie( of
the provisions aforesaid and declined to 'rant the re0uested clearance. In its counselCs letter of
+ece*ber D, !"#, Calte$ sou'ht a reconsideration of the fore'oin' stand, stressin' that there
bein' involved no consideration in the part of any contestant, the contest (as not, under controllin'
authorities, conde*nable as a lottery. Relyin', ho(ever, on an opinion rendered by the =ecretary of
Eustice on an unrelated case seven years before %4pinion :D, =eries of !83&, the Post*aster
Aeneral *aintained his vie( that the contest involves consideration, or that, if it does not, it is
nevertheless a ,'ift enterprise, (hich is e0ually banned by the Postal Ba(, and in his letter of
+ece*ber #, !"# not only denied the use of the *ails for purposes of the proposed contest but as
(ell threatened that if the contest (as conducted, ,a fraud order (ill have to be issued a'ainst it
%Calte$& and all its representatives,.
Calte$ thereupon invo)ed 7udicial intervention by filin' the present petition for declaratory relief
a'ainst Post*aster Aeneral Enrico Palo*ar, prayin' ,that 7ud'*ent be rendered declarin' its
CCalte$ -ooded Pu*p ContestC not to be violative of the Postal Ba(, and orderin' respondent to
allo( petitioner the use of the *ails to brin' the contest to the attention of the public,. After issues
(ere 7oined and upon the respective *e*oranda of the parties, the trial court rendered 7ud'*ent as
follo(s9
In vie( of the fore'oin' considerations, the Court holds that the proposed CCalte$
-ooded Pu*p ContestC announced to be conducted by the petitioner under the rules *ar)ed
as Anne$ B of the petitioner does not violate the Postal Ba( and the respondent has no ri'ht
to bar the public distribution of said rules by the *ails.
6he respondent appealed.
6he parties are no( before us, arrayed a'ainst each other upon t(o basic issues9 first,
(hether the petition states a sufficient cause of action for declaratory relief2 and second, (hether the
proposed ,Calte$ -ooded Pu*p Contest, violates the Postal Ba(. ?e shall ta)e these up in
seriatim.
. By e$press *andate of section of Rule "" of the old Rules of Court, (hich (as the
applicable le'al basis for the re*edy at the ti*e it (as invo)ed, declaratory relief is available to any
person ,(hose ri'hts are affected by a statute . . . to deter*ine any 0uestion of construction or
validity arisin' under the . . . statute and for a declaration of his ri'hts thereunder, %no( section ,
Rule ";, Revised Rules of Court&. In a*plification, this Court, confor*ably to established
7urisprudence on the *atter, laid do(n certain conditions sine !ua non therefor, to (it9 %& there *ust
be a 7usticiable controversy2 %:& the controversy *ust be bet(een persons (hose interests are
adverse2 %3& the party see)in' declaratory relief *ust have a le'al interest in the controversy2 and %;&
the issue involved *ust be ripe for 7udicial deter*ination %6olentino vs. 6he Board of Accountancy, et
al., A.R. No. B-3#":, =epte*ber :<, !82 +elu*en, et al. vs. Republic of the Philippines, 8# 4.A.,
No. :, pp. 8D", 8D<-8D!2 Edades vs. Edades, et al., A.R. No. B-<!";, Euly 3, !8"&. 6he 'rava*en
of the appellantCs stand bein' that the petition herein states no sufficient cause of action for
declaratory relief, our duty is to assay the factual bases thereof upon the fore'oin' crucible.
As (e loo) in retrospect at the incidents that 'enerated the present controversy, a nu*ber of
si'nificant points stand out in bold relief. 6he appellee %Calte$&, as a business enterprise of so*e
conse0uence, concededly has the un0uestioned ri'ht to e$ploit every le'iti*ate *eans, and to avail
of all appropriate *edia to advertise and sti*ulate increased patrona'e for its products. In contrast,
the appellant, as the authority char'ed (ith the enforce*ent of the Postal Ba(, ad*ittedly has the
po(er and the duty to suppress trans'ressions thereof > particularly thru the issuance of fraud
orders, under =ections !<: and !<3 of the Revised Ad*inistrative Code, a'ainst le'ally non-
*ailable sche*es. 4bviously pursuin' its ri'ht aforesaid, the appellee laid out plans for the sales
pro*otion sche*e hereinbefore detailed. 6o forestall possible difficulties in the disse*ination of
infor*ation thereon thru the *ails, a*on'st other *edia, it (as found e$pedient to re0uest the
appellant for an advance clearance therefor. -o(ever, li)e(ise by virtue of his 7urisdiction in the
pre*ises and construin' the pertinent provisions of the Postal Ba(, the appellant sa( a violation
thereof in the proposed sche*e and accordin'ly declined the re0uest. A point of difference as to the
correct construction to be 'iven to the applicable statute (as thus reached. Co**unications in
(hich the parties e$pounded on their respective theories (ere e$chan'ed. 6he confidence (ith
(hich the appellee insisted upon its position (as *atched only by the obstinacy (ith (hich the
appellant stood his 'round. And this i*passe (as cli*a$ed by the appellantCs open (arnin' to the
appellee that if the proposed contest (as ,conducted, a fraud order (ill have to be issued a'ainst it
and all its representatives.,
A'ainst this bac)drop, the sta'e (as indeed set for the re*edy prayed for. 6he appelleeCs
insistent assertion of its clai* to the use of the *ails for its proposed contest, and the challen'e
thereto and conse0uent denial by the appellant of the privile'e de*anded, undoubtedly spa(ned a
live controversy. 6he 7usticiability of the dispute cannot be 'ainsaid. 6here is an active anta'onistic
assertion of a le'al ri'ht on one side and a denial thereof on the other, concernin' a real > not a
*ere theoretical > 0uestion or issue. 6he contenders are as real as their interests are substantial.
6o the appellee, the uncertainty occasioned by the diver'ence of vie(s on the issue of construction
ha*pers or disturbs its freedo* to enhance its business. 6o the appellant, the suppression of the
appelleeCs proposed contest believed to trans'ress a la( he has s(orn to uphold and enforce is an
unavoidable duty. ?ith the appelleeCs bent to hold the contest and the appellantCs threat to issue a
fraud order therefor if carried out, the contenders are confronted by the o*inous shado( of an
i**inent and inevitable liti'ation unless their differences are settled and stabili1ed by a tran0uili1in'
declaration %Pablo y =en, et al. vs. Republic of the Philippines, A.R. No. B-"<"<, April 3#, !88&.
And, contrary to the insinuation of the appellant, the ti*e is lon' past (hen it can ri'htly be said that
*erely the appelleeCs ,desires are th(arted by its o(n doubts, or by the fears of others, > (hich
ad*ittedly does not confer a cause of action. +oubt, if any there (as, has ripened into a 7usticiable
controversy (hen, as in the case at bar, it (as translated into a positive clai* of ri'ht (hich is
actually contested %III Moran, Co**ents on the Rules of Court, !"3 ed., pp. 3:-33, citin'9
?ood(ard vs. /o$ ?est Coast 6heaters, 3" Ari1., :8, :<; Pac. 38#&.
?e cannot hospitably entertain the appellantCs pretense that there is here no 0uestion of
construction because the said appellant ,si*ply applied the clear provisions of the la( to a 'iven set
of facts as e*bodied in the rules of the contest,, hence, there is no roo* for declaratory relief. 6he
infir*ity of this pose lies in the fact that it proceeds fro* the assu*ption that, if the circu*stances
here presented, the construction of the le'al provisions can be divorced fro* the *atter of their
application to the appelleeCs contest. 6his is not feasible. Construction, verily, is the art or process of
discoverin' and e$poundin' the *eanin' and intention of the authors of the la( "ith respect to its
application to a iven case, (here that intention is rendered doubtful, a*on'st others, by reason of
the fact that the iven case is not e#plicitly provided for in the la" %Blac), Interpretation of Ba(s, p.
&. 6his is precisely the case here. ?hether or not the sche*e proposed by the appellee is (ithin the
covera'e of the prohibitive provisions of the Postal Ba( inescapably re0uires an in0uiry into the
intended *eanin' of the (ords used therein. 6o our *ind, this is as *uch a 0uestion of construction
or interpretation as any other.
Nor is it accurate to say, as the appellant inti*ates, that a pronounce*ent on the *atter at
hand can a*ount to nothin' *ore than an advisory opinion the handin' do(n of (hich is anathe*a
to a declaratory relief action. 4f course, no breach of the Postal Ba( has as yet been co**itted.
Fet, the disa'ree*ent over the construction thereof is no lon'er nebulous or contin'ent. It has ta)en
a fi$ed and final shape, presentin' clearly defined le'al issues susceptible of i**ediate resolution.
?ith the battle lines dra(n, in a *anner of spea)in', the propriety > nay, the necessity > of settin'
the dispute at rest before it accu*ulates the asperity diste*per, ani*osity, passion and violence of a
full-blo(n battle (hich loo*s ahead %III Moran, Co**ents on the Rules of Court, !"3 ed., p. 3:
and cases cited&, cannot but be conceded. Paraphrasin' the lan'ua'e in $eitlin vs. Arneberh 8!
Cal., :d., !#, 3 Cal. Rptr., <##, 3<3 P. :d., 8:, cited in :: A*. Eur., :d., p. <"!, to deny
declaratory relief to the appellee in the situation into (hich it has been cast, (ould be to force it to
choose bet(een undesirable alternatives. If it cannot obtain a final and definitive pronounce*ent as
to (hether the anti-lottery provisions of the Postal Ba( apply to its proposed contest, it (ould be
faced (ith these choices9 If it launches the contest and uses the *ails for purposes thereof, it not
only incurs the ris), but is also actually threatened (ith the certain i*position, of a fraud order (ith
its conco*itant sti'*a (hich *ay attach even if the appellee (ill eventually be vindicated2 if it
abandons the contest, it beco*es a self-appointed censor, or per*its the appellant to put into effect
a virtual fiat of previous censorship (hich is constitutionally un(arranted. As (e (ei'h these
considerations in one e0uation and in the spirit of liberality (ith (hich the Rules of Court are to be
interpreted in order to pro*ote their ob7ect %section , Rule , Revised Rules of Court& > (hich, in
the instant case, is to settle, and afford relief fro* uncertainty and insecurity (ith respect to, ri'hts
and duties under a la( > (e can see in the present case any i*position upon our 7urisdiction or any
futility or pre*aturity in our intervention.
6he appellant, (e apprehend, underrates the force and bindin' effect of the rulin' (e hand
do(n in this case if he believes that it (ill not have the final and pacifyin' function that a declaratory
7ud'*ent is calculated to subserve. At the very least, the appellant (ill be bound. But *ore than this,
he obviously overloo)s that in this 7urisdiction, ,Eudicial decisions applyin' or interpretin' the la(
shall for* a part of the le'al syste*, %Article <, Civil Code of the Philippines&. In effect, 7udicial
decisions assu*e the sa*e authority as the statute itself and, until authoritatively abandoned,
necessarily beco*e, to the e$tent that they are applicable, the criteria (hich *ust control the
actuations not only of those called upon to abide thereby but also of those in duty bound to enforce
obedience thereto. Accordin'ly, (e entertain no *is'ivin's that our resolution of this case (ill
ter*inate the controversy at hand.
It is not a*iss to point out at this 7uncture that the conclusion (e have herein 7ust reached is
not (ithout precedent. In %iberty Calendar Co. vs. Cohen, ! N.E., 3!!, D A. :d., ;<D, (here a
corporation en'a'ed in pro*otional advertisin' (as advised by the county prosecutor that its
proposed sales pro*otion plan had the characteristics of a lottery, and that if such sales pro*otion
(ere conducted, the corporation (ould be sub7ect to cri*inal prosecution, it (as held that the
corporation (as entitled to *aintain a declaratory relief action a'ainst the county prosecutor to
deter*ine the le'ality of its sales pro*otion plan. &n pari materia, see also9 'unis vs. Con"ay, D
App. +iv. :d., :#D, :3; N.F.=. :d., ;382 $eitlin vs. Arneberh, supra2 (hrillo, &nc. vs. Scott, 8 N.E.
=uper. :;, <: A. :d., !#3.
In fine, (e hold that the appellee has *ade out a case for declaratory relief.
:. 6he Postal Ba(, chapter 8: of the Revised Ad*inistrative Code, usin' al*ost identical
ter*inolo'y in sections !8;%a&, !<: and !<3 thereof, supra, conde*ns as absolutely non-
*ailable, and e*po(ers the Post*aster Aeneral to issue fraud orders a'ainst, or other(ise deny
the use of the facilities of the postal service to, any infor*ation concernin' ,any lottery, 'ift
enterprise, or sche*e for the distribution of *oney, or of any real or personal property by lot,
chance, or dra(in' of any )ind,. @pon these (ords hin'es the resolution of the second issue posed
in this appeal.
-appily, this is not an alto'ether untrodden 7udicial path. As early as in !::, in )*l Debate),
&nc. vs. (opacio, ;; Phil., :D<, :<3-:<;, (hich si'nificantly d(elt on the po(er of the postal
authorities under the above*entioned provisions of the Postal Ba(, this Court declared that >
?hile countless definitions of lottery have been atte*pted, the authoritative one for
this 7urisdiction is that of the @nited =tates =upre*e Court, in analo'ous cases havin' to do
(ith the po(er of the @nited =tates Post*aster Aeneral, vi+.9 6he ter* ,lottery, e$tends to
all sche*es for the distribution of pri1es by chance, such as policy playin', 'ift e$hibitions,
pri1e concerts, raffles at fairs, etc., and various for*s of 'a*blin'. 6he three essential
ele*ents of a lottery are9 /irst, consideration2 second, pri1e2 and third, chance. %-orner vs.
=tates G<!:H, ;D @.=. ;;!2 Public Clearin' -ouse vs. Coyne G!#3H, !; @.=., ;!D2 @.=.
vs. /ilart and =in'son G!8H, 3# Phil., <#2 @.=. vs. 4lsen and Mar)er G!DH, 3" Phil., 3!82
@.=. vs. Ba'uio G!!H, 3! Phil., !":2 5alhalla -otel Construction Co*pany vs. Car*ona, p.
:33, ante.&
@nani*ity there is in all 0uarters, and (e a'ree, that the ele*ents of pri1e and chance are too
obvious in the disputed sche*e to be the sub7ect of contention. Conse0uently as the appellant
hi*self concedes, the field of in0uiry is narro(ed do(n to the e$istence of the ele*ent of
consideration therein. Respectin' this *atter, our tas) is considerably li'htened inas*uch as in the
sa*e case 7ust cited, this Court has laid do(n a definitive yard-stic) in the follo(in' ter*s >
In respect to the last ele*ent of consideration, the la( does not conde*n the
'ratuitous distribution of property by chance, if no consideration is derived directly or
indirectly fro* the party receivin' the chance, but does conde*n as cri*inal sche*es in
(hich a valuable consideration of so*e )ind is paid directly or indirectly for the chance to
dra( a pri1e.
Revertin' to the rules of the proposed contest, (e are struc) by the clarity of the lan'ua'e in
(hich the invitation to participate therein is couched. 6hus >
No pu11les, no rhy*esI Fou donCt need (rappers, labels or bo$topsI Fou donCt have
to buy anythin'I =i*ply esti*ate the actual nu*ber of liter the Calte$ 'as pu*p (ith the
hood at your favorite Calte$ dealer (ill dispense fro* > to >, and (in valuable
pri1es . . . ., .
No(here in the said rules is any re0uire*ent that any fee be paid, any *erchandise be
bou'ht, any service be rendered, or any value (hatsoever be 'iven for the privile'e to participate. A
prospective contestant has but to 'o to a Calte$ station, re0uest for the entry for* (hich is available
on de*and, and acco*plish and sub*it the sa*e for the dra(in' of the (inner. 5ie(ed fro* all
an'les or turned inside out, the contest fails to e$hibit any discernible consideration (hich (ould
brand it as a lottery. Indeed, even as (e head the stern in7unction, ,loo) beyond the fair e$terior, to
the substance, in order to un*as) the real ele*ent and pernicious tendencies (hich the la( is
see)in' to prevent, %,El +ebate,, Inc. vs. 6opacio, supra, p. :!&, (e find none. In our appraisal, the
sche*e does not only appear to be, but actually is, a 'ratuitous distribution of property by chance.
6here is no point to the appellantCs insistence that non-Calte$ custo*ers (ho *ay buy Calte$
products si*ply to (in a pri1e (ould actually be indirectly payin' a consideration for the privile'e to
7oin the contest. Perhaps this (ould be tenable if the purchase of any Calte$ product or the use of
any Calte$ service (ere a pre-re0uisite to participation. But it is not. A contestant, it hardly needs
reiteratin', does not have to buy anythin' or to 'ive anythin' of value.,a"ph-l .n.t
4ff-tan'ent, too, is the su''estion that the sche*e, bein' ad*ittedly for sales pro*otion,
(ould naturally benefit the sponsor in the (ay of increased patrona'e by those (ho (ill be
encoura'ed to prefer Calte$ products ,if only to 'et the chance to dra( a pri1e by securin' entry
blan)s,. 6he re0uired ele*ent of consideration does not consist of the benefit derived by the
proponent of the contest. 6he true test, as laid do(n in /eople vs. Cardas, :< P. :d., !!, 3D Cal.
App. %=upp.& D<<, is (hether the participant pays a valuable consideration for the chance, and not
(hether those conductin' the enterprise receive so*ethin' of value in return for the distribution of
the pri1e. Perspective properly oriented, the standpoint of the contestant is all that *atters, not that
of the sponsor. 6he follo(in', culled fro* Corpus Euris =ecundu*, should set the *atter at rest9
6he fact that the holder of the dra(in' e$pects thereby to receive, or in fact does
receive, so*e benefit in the (ay of patrona'e or other(ise, as a result of the dra(in'2 does
not supply the ele*ent of consideration. Griffith Amusement Co. vs. 0oran, (e#. Civ. App.,
!< =.?., :d., <;;, %8; C.E.=., p. <;!&.
6hus enli'htened, (e 7oin the trial court in declarin' that the ,Calte$ -ooded Pu*p Contest,
proposed by the appellee is not a lottery that *ay be ad*inistratively and adversely dealt (ith under
the Postal Ba(.
But it *ay be as)ed9 Is it not at least a ,'ift enterprise, or sche*e for the distribution of *oney,
or of any real or personal property by lot, chance, or dra(in' of any )ind,, (hich is e0ually
prescribedI Incidentally, (hile the appellantCs brief appears to have concentrated on the issue of
consideration, this aspect of the case cannot be avoided if the re*edy here invo)ed is to achieve its
tran0uili1in' effect as an instru*ent of both curative and preventive 7ustice. Recallin' that the
appellantCs action (as predicated, a*on'st other bases, upon 4pinion :D, =eries !83, of the
=ecretary of Eustice, (hich opined in effect that a sche*e, thou'h not a lottery for (ant of
consideration, *ay nevertheless be a 'ift enterprise in (hich that ele*ent is not essential, the
deter*ination of (hether or not the proposed contest > (antin' in consideration as (e have found
it to be > is a prohibited 'ift enterprise, cannot be passed over sub silencio.
?hile an all-e*bracin' concept of the ter* ,'ift enterprise, is yet to be spelled out in e$plicit
(ords, there appears to be a consensus a*on' le$ico'raphers and standard authorities that the
ter* is co**only applied to a sportin' artifice of under (hich 'oods are sold for their *ar)et value
but by (ay of induce*ent each purchaser is 'iven a chance to (in a pri1e %8; C.E.=., <8#2 3; A*.
Eur., "8;2 Blac), Ba( +ictionary, ;th ed., p. <D2 Ballantine, Ba( +ictionary (ith Pronunciations, :nd
ed., p. 882 Retail =ection of Cha*ber of Co**erce of Platts*outh vs. Jiec), :8D N.?., ;!3, :<
Neb. 32 Bar)er vs. =tate, !3 =.E., "#8, 8" Aa. App., D#82 Bell vs. =tate, 3D 6enn. 8#D, 8#!, 8
=need, 8#D, 8#!&. As thus conceived, the ter* clearly cannot e*brace the sche*e at bar. As
already noted, there is no sale of anythin' to (hich the chance offered is attached as an induce*ent
to the purchaser. 6he contest is open to all 0ualified contestants irrespective of (hether or not they
buy the appelleeCs products.
Aoin' a step farther, ho(ever, and assu*in' that the appelleeCs contest can be enco*passed
(ithin the broadest s(eep that the ter* ,'ift enterprise, is capable of bein' e$tended, (e thin) that
the appellantCs pose (ill 'ain no added co*fort. As stated in the opinion relied upon, rulin's there
are indeed holdin' that a 'ift enterprise involvin' an a(ard by chance, even in default of the ele*ent
of consideration necessary to constitute a lottery, is prohibited %E.'.9 Cri*es vs. =tates, :38 Ala !:,
D< =o. D32 Russell vs. E0uitable Boan K =ec. Co., :! Aa. 8;, 8< =.E., <<2 =tate e# rel. =tafford
vs. /o$-Areat /alls 6heater Corporation, 3: P. :d., "<!, "!;, "!<, ; Mont. 8:&. But this is only
one side of the coin. E0ually i*pressive authorities declare that, li)e a lottery, a 'ift enterprise co*es
(ithin the prohibitive statutes only if it e$hibits the tripartite ele*ents of pri1e, chance and
consideration %E.'.9 Bills vs. People, 8D P. :d., 3!, ;:, 3 Colo., 3:"2 +C4rio vs. Eacobs, :D8 P.
8"3, 8"8, 8 ?ash., :!D2 People vs. Psallis, : N.F.=., :d., D!"2 City and County of +enver vs.
/rueauff, << P., 3<!, 3!;, 3! Colo., :#, D B.R.A., N.=., 3, : Ann. Cas., 8:2 8; C.E.=., <8,
citin'9 Bar)er vs. =tate, !3 =.E., "#8, "#D, 8" Aa. App., D#82 < ?ords and Phrases, per*. ed., pp.
8!#-8!;&. 6he apparent conflict of opinions is e$plained by the fact that the specific statutory
provisions relied upon are not identical. In so*e cases, as pointed out in 8; C.E.=., <8, the ter*s
,lottery, and ,'ift enterprise, are used interchan'eably %Bills vs. People, supra&2 in others, the
necessity for the ele*ent of consideration or chance has been specifically eli*inated by statute. %8;
C.E.=., 38-38:, citin' Bar)er vs. =tate, supra2 =tate e# rel. =tafford vs. /o$-Areat /alls 6heater
Corporation, supra&. 6he lesson that (e derive fro* this state of the pertinent 7urisprudence is,
therefore, that every case *ust be resolved upon the particular phraseolo'y of the applicable
statutory provision.
6a)in' this cue, (e note that in the Postal Ba(, the ter* in 0uestion is used in association (ith
the (ord ,lottery,. ?ith the *eanin' of lottery settled, and consonant to the (ell-)no(n principle of
le'al her*eneuticsnoscitur a sociis 1 (hich 4pinion :D aforesaid also relied upon althou'h only
insofar as the ele*ent of chance is concerned > it is only lo'ical that the ter* under a construction
should be accorded no other *eanin' than that (hich is consistent (ith the nature of the (ord
associated there(ith. -ence, if lottery is prohibited only if it involves a consideration, so also *ust
the ter* ,'ift enterprise, be so construed. =i'nificantly, there is not in the la( the sli'htest indiciu*
of any intent to eli*inate that ele*ent of consideration fro* the ,'ift enterprise, therein included.
6his conclusion fir*s up in the li'ht of the *ischief sou'ht to be re*edied by the la(, resort to
the deter*ination thereof bein' an accepted e$trinsic aid in statutory construction. Mail fraud orders,
it is a$io*atic, are desi'ned to prevent the use of the *ails as a *ediu* for disse*inatin' printed
*atters (hich on 'rounds of public policy are declared non-*ailable. As applied to lotteries, 'ift
enterprises and si*ilar sche*es, 7ustification lies in the reco'ni1ed necessity to suppress their
tendency to infla*e the 'a*blin' spirit and to corrupt public *orals %Co*. vs. Bund, 8 A. :d., <3!,
;3 Pa. =uper. :#<&. =ince in 'a*blin' it is inherent that so*ethin' of value be ha1arded for a
chance to 'ain a lar'er a*ount, it follo(s ineluctably that (here no consideration is paid by the
contestant to participate, the reason behind the la( can hardly be said to obtain. If, as it has been
held >
Aratuitous distribution of property by lot or chance does not constitute ,lottery,, if it is
not resorted to as a device to evade the la( and no consideration is derived, directly or
indirectly, fro* the party receivin' the chance, amblin spirit not bein cultivated or
stimulated thereby. City of Ros(ell vs. Eones, "D P. :d., :<", ; N.M., :8<., %:8 ?ords and
Phrases, per*. ed., p. "!8, e*phasis supplied&.
(e find no obstacle in sayin' the sa*e respectin' a 'ift enterprise. In the end, (e are
persuaded to hold that, under the prohibitive provisions of the Postal Ba( (hich (e have heretofore
e$a*ined, 'ift enterprises and si*ilar sche*es therein conte*plated are conde*nable only if, li)e
lotteries, they involve the ele*ent of consideration. /indin' none in the contest here in 0uestion, (e
rule that the appellee *ay not be denied the use of the *ails for purposes thereof.
Recapitulatin', (e hold that the petition herein states a sufficient cause of action for
declaratory relief, and that the ,Calte$ -ooded Pu*p Contest, as described in the rules sub*itted by
the appellee does not trans'ress the provisions of the Postal Ba(.
ACC4R+INABF, the 7ud'*ent appealed fro* is affir*ed. No costs.
Concepcion, C.2., Reyes, 2.'.%., 'arrera, Di+on, Reala, 0a3alintal, 'en+on, 2./., $aldivar and
Sanche+, 22., concur.