Definition of Statutory Construction

G.R. No. L-19650

Caltex v Palomar
CASTRO, J.

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

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). T
RECIT-READY / SUMMARY
In 1960, Caltex Philippines had a Caltex Hooded Pump Contest. To join and to have a chance
to win, participant shall claim a stub from a Caltex gasoline station. Expecting heavy use of
mail for promotions and communication, cleared with the Postal Service in advance for mailing
The Postmaster General, Enrico Palomar declined Caltex Philippines request for clearance,
invoking Section 1954(a), Section 1982 and Section 1983 of the Revised Administrative Code.
The scheme was considered by the Postal Service as a lottery or gift enterprise. The Court
ruled that Caltex didnt violate the Mailing law, stating that the contest doesnt satisfy the
three elements (consideration, price chance) of lottery or gift enterprise. Consideration is not
present because Caltex doesnt require direct or indirect payment to join the contest.
FACTS
In 1960, Caltex Philippines, in an effort to market its products, had a Caltex Hooded
Pump Contest. To join and to have a chance to win, participant shall claim a stub from a
Caltex gasoline station; he shall guess or estimate the number of liters dispensed

hooded pump. The number closest to the dispensed gas will win.
Caltex, expecting heavy use of mail for promotions and communication, cleared with the
Postal Service in advance for mailing. They sent a letter claiming that the contest does

not violate the Anti-Lottery Provisions of the Mailing Law.

The Postmaster General, Enrico Palomar declined Caltex Philippines request for
clearance, invoking Section 1954(a), Section 1982 and Section 1983 of the Revised
Administrative Code.

SECTION 1954. Absolutely non-mailable matter. No matter belonging to any of the following classes shall
be imported into the Philippines Written or printed matter in any form advertising, describing, or in any
manner pertaining to, 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
"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, 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"
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 enterprise for obtaining money or
property by means of false or fraudulent pretenses, representations, or promise, forbid the issue or
payment by any postmaster of any postal money ...

According to Enrico Palomar, Caltex violates these Sections of the Revised

Administrative Code. According to him, the company is engaged in lottery or gift

enterprise
On October 31, 1960, Caltex sent a copy of its contest rules justifying its non-violation of

Anti-Lottery Provisions.
Caltex filed a declaratory relief. Hence, this case.

ISSUES / RATIO
WON Caltex Philippines Hooded Pump

Contest is against the mailing law

ARTICLES/LAWS INVOLVED
Section 1954(a), Section 1982 and
Section 1983 of the Revised
Administrative Code

HELD
The Court ruled that there is NO violation of said contest. Lottery is defined by the Court as all
schemes of distribution of prizes by chance. Gift enterprise, on the other hand, is usually in
sporting artifice wherein products are sold in market price, and purchase gives one a chance to
win a prize. Both of these have three elements, namely consideration price andchance.
Price and chance are obviously present in the Caltex Hooded Pump Contest. Consideration,
however, is absent because Caltex doesnt require any direct or indirect payment to get a
prize. Contestants simply have to get stubs.
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. 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.
OPINION (CONCURRING)

OPINION (DISSENTING)