Caltex (Phils.), Inc. v.

Palomar

FACTS:

In 1960, Caltex launched their "Caltex Hooded Pump Contest", which called for participants to
estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a
specified period. Participants were not required consideration nor pay a fee. No purchase of Caltex
products was also required to be made. Entry forms were to be made available upon request at each
Caltex station where a sealed can would be provided for the deposit of accomplished entry stubs.
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
the Anti-lottery provisions of the Revised Administrative Code. Postmaster General Enrico Palomar
denied the request, arguing that the said contest violated the provisions
of the law on subject. CALTEX sought judicial intervention wherein the trial court ruled in its favor.
Respondent Palomar appealed, posing the same argument that the said contest violated the
prohibitive provisions of the Postal Law.

Issue:

Whether or not the "Caltex Hooded Pump Contest" fell on the purview of the prohibitive provisions of
the Postal Law.

HELD:

The Postal Law does not allow “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".
The Court held that the "Caltex Hooded Pump Contest" by CALTEX is not a “lottery” nor a “gift
enterprise” but rather a gratuitous distribution of property by chance, which the law does not prohibit.
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. The contest
in question, lacking the element of “consideration”, cannot be deemed al lottery. The rules of the
contest made no mention of a valuable consideration of some kind being paid directly or indirectly for
the chance to draw a prize. The term “gift enterprise” also could not 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.

By virtue of 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