STAT CON
CASE DIGEST
Definition of Construction
CALTEX(appellee) vs ENRICO
PALOMAR (appellant)
GR L-19650 | Sept. 29, 1966
Construction 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, among
others, by reason of the fact that the given case is not
explicitly provided for in the law (Black, Interpretation
of Laws, p. 1).
Facts:
 1960- Caltex promotional scheme (Caltex Hooded
Pump Contest)
 Rule of the game is to estimate actual number of
liters a hooded gas pump will dispense in a specified
period
 Participation is open indiscriminately to all motor
vehicle owners and/or licensed drivers
 There is local, regional, national level of the contests
 Extensive use of mails- representations were made
with postal authorities for contest to be cleared in
advance (pursuant to Sec 1954, 1982 and 1983 of
RAC)
 Formalized in a letter to Postmaster General in which
petitioner enclosed copy of contest rules and
endeavoured to justify its position that it does not
violate anti lottery provisions of Postal Law
 Postmaster Gen declined clearance
 Caltex sought recon stressing that it cannot be
condemned as lottery
 Postmaster Gen relying on opinion by Sec of Justice,
maintained its view that it is a gift enterprise equally
banned by Postal Law (he denied use of mails for that
purpose and threatened that if contest was conducted,
a fraud order will have to be issued against
petitioners)
 Caltex filed present petition for declaratory relief
against respondent, praying that the contest be not
declared as violative of postal law and ordering resp
to allow pet the use of mails to bring the contest to
the attention of the public
 Trial Court held judgment in favour of petitioner
 Respondent appealed
Issues:
1. WON the scheme proposed by Caltex is within
prohibitive provisions of Postal Law
Ruling:
Mandate: Sec 1, Rule 64 of old Rules of Court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 or
duties thereunder
 Appellee has right to exploit every legitimate means
to advertise products; appellant has power to suppress
transgressions thereof (issuance of fraud orders)
 Appellee laid out plans for promotion but by virtue of
jurisdiction of appellant in the constructions of the
provisions of postal law, latter saw a violation and
decline requestpositive claim of right actually
contested
 Issue at hand is a question of construction in intended
meaning of the words used
 Appellant underrated force and binding effect of
ruling of the court in a past judicial decision (Art 8,
CCP)- judicial decision assume same authority as a
statue unless authoritatively abandoned
 Past case-Liberty Calendar Co. vs Cohen (ruling:
corporation was entitled to maintain a declaratory
relief action against the county prosecutor to
determine the legality of its sales promotion plan.)
Postal Law empowers Postmaster General to issue fraud
orders, otherwise, deny use of facilities, against 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".
 Definition of LOTTERY (El Debate vs Topacio): 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. There are 3 elements
o Consideration
o Prize
o Chance
 field of inquiry is narrowed down to the existence of
the element of consideration
o law does not condemn gratuitous
distribution of property by chance
o condemns criminal schemes such as when
valuable consideration s paid for a chance to
draw a prize
 Rules of contest: only invitation to join and there is
no req to pay a fee or buy a merch or service for the
privilege to participate; what participant has to do is
just go to Caltex, guess and fill up a form and submit
for drawing. (failed to exhibit that it is a lottery)
 No point in resp’s contention that non Caltex
customers may buy products simply to win
prizenot needed to join draw
 GIFT ENTERPRISE-goods are sold for their
market value but by way of inducement each
purchaser is given a chance to win a prize
 Is it not a gift enterprise?  No, as it is open to all
qualified contestants irrespective WON they bought
appellee’s products
STAT CON
CASE DIGEST
Definition of Construction
 Noscitur a sociis-term under construction should be
accorded no other meaning than that which is
consistent with the nature of the word associated
therewith lottery is prohibited only if it involves a
consideration, so also must the term "gift enterprise"
be so construed (condemned only if they involve
consideration)

Appellee has made out a case for

declaratory relief; the contest does not
transgress provisions of Postal Law
Notes: