Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE 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 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a
promotional scheme calculated to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it
calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will
dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and
their immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed
drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products
required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be
provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose
estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize;
the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a
thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a
screwdriver set for third. The first-prize winner in each station will then be qualified to join in the "Regional Contest" in
seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can
from which the first-prize, second-prize and third-prize winners of that region will be drawn. The regional first-prize winners
will be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective Caltex
dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be
placed inside a sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be
made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and
P650 as consolation prize for each of the remaining four participants.

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 sections 1954(a), 1982 and 1983 of the Revised
Administrative Code, the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes, whether
sealed as first-class matter or not, shall be imported into the Philippines through the mails, or to be deposited in or
carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau
of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or
purporting to convey any information concerning 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, representations, or promises.

"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, or that any person or company is conducting any scheme, device, or
enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent
pretenses, representations, or promises, 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"
plainly written or stamped upon the outside cover thereof, any mail matter of whatever class mailed by or
addressed to such person or company or the representative or agent of such person or company.

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 of any real or personal property by lot, chance, or
drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining
money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or
promise, forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said
person or company or to the agent of any such person or company, whether such agent is acting as an individual
or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the
remitters of the sums named in money orders or telegraphic transfers drawn in favor of such person or company
or its agent.
The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex,
thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate
the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme
falls within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of
December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery.
Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion
217, Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it
does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10,
1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest
was conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster
General Enrico Palomar, praying "that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be
violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the
attention of the public". After issues were joined and upon the respective memoranda of the parties, the trial court
rendered judgment as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest'
announced to be conducted by the petitioner under the rules marked as Annex B of the petitioner does not violate
the Postal Law and the respondent has no right to bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a
sufficient cause of action for declaratory relief; and second, whether the proposed "Caltex Hooded Pump Contest" violates
the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the
remedy at the time it was invoked, 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
thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established
jurisprudence on the matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination
(Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of
the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The
gravamen of the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief,
our duty is to assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out
in bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned
right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased
patronage for its products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law,
admittedly has the power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud orders,
under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-mailable schemes. Obviously
pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall
possible difficulties in the dissemination of information thereon thru the mails, amongst other media, it was found
expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed
scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the
applicable statute was thus reached. Communications in which the parties expounded on their respective theories were
exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with
which the appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the appellee that
if the proposed contest was "conducted, a fraud order will have to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim
to the use of the mails for its proposed contest, and the challenge thereto and consequent denial by the appellant of the
privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is
an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a
mere theoretical — question or issue. The contenders are as real as their interests are substantial. To the appellee, the
uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to
enhance its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law
he has sworn to uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the
appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of
an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo
y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the
appellant, the time is long past when it can rightly be said that merely the appellee's "desires are thwarted by its own
doubts, or by the fears of others" — which admittedly does not confer a cause of action. Doubt, if any there was, has
ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West
Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said
appellant "simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest",
hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption
that, if the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. 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). This is precisely the case here. Whether or not the scheme proposed by the
appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as
any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing
more than an advisory opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach
of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous
or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate
resolution. With the battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which
looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded.
Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am.
Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it
to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-
lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the
contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain
imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated;
if it abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect a virtual fiat of
previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the
spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1,
Revised Rules of Court) — which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with
respect to, rights and duties under a law — we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he
believes that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the
very least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial
decisions applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In
effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily
become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon
to abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings
that our resolution of this case will terminate the controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent.
In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising
was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that
if such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its
sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs.
Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a),
1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue
fraud orders against, or otherwise deny the use of the facilities of the postal service to, 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". Upon these words hinges the resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil.,
278, 283-284, which significantly dwelt on the power of the postal authorities under the abovementioned provisions of the
Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the
United States Supreme Court, in analogous cases having to do with the power of the United States Postmaster
General, viz.: 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. (Horner vs. States [1892], 147
U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80;
U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction
Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed
scheme to be the subject of contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed
down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened
inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms —

In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by
chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn
as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to
draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to
participate therein is couched. Thus —
 No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply
estimate the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense
from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered,
or any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex
station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of
the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which
would brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance,
in order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs.
Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a
gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a
prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable
if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not. A
contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the
sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products "if only to get the
chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit
derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App.
(Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting
the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the
standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum,
should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way
of patronage or otherwise, as a result of the drawing; does not supply the element of consideration.Griffith
Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is
not a lottery that may be administratively and adversely dealt with under the Postal Law.

But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind", which is equally prescribed? Incidentally, while the appellant's brief
appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here
invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the
appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise
in which that element is not essential, the determination of whether or not the proposed contest — wanting in
consideration as we have found it to be — is a prohibited gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a
consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of
under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a
prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with
Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128
Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus
conceived, the term clearly cannot 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.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep
that the term "gift enterprise" is capable of being extended, we think that the appellant's pose will gain no added comfort.
As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance,
even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235
Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally
impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the
tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio
vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State,
193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions
is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in
54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-352,
citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). 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.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the
meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics 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 slightest indicium of any intent to eliminate that
element of consideration from the "gift enterprise" therein included.
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. Mail fraud orders, it is axiomatic, are designed to prevent the use
of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable.
As applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows
ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be
said to obtain. If, as it has been held —

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a device
to evade the law and no consideration is derived, directly or indirectly, from the party receiving the
chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41
N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the
prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the contest
here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex
Hooded Pump Contest" as described in the rules submitted by the appellee does not transgress the provisions of the
Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 112170 April 10, 1996

CESARIO URSUA, petitioner,

vs.
COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.

BELLOSILLO, J.:p

This is a petition for review of the decision of the Court of Appeals which affirmed the conviction of petitioner by the
Regional Trial Court of Davao City for violation of Sec. 1 of C.A. No. 142, as amended by R.A. No. 6085, otherwise known
as "An Act to Regulate the Use of Aliases". 1

Petitioner Cesario Ursua was a Community Environment and Natural Resources Officer assigned in Kidapawan,
Cotabato. On 9 May 1989 the Provincial Governor of Cotabato requested the Office of the Ombudsman in Manila to
conduct an investigation on a complaint for bribery, dishonesty, abuse of authority and giving of unwarranted benefits by
petitioner and other officials of the Department of Environment and Natural Resources. The complaint was initiated by the
Sangguniang Panlalawigan of Cotabato through a resolution advising the Governor to report the involvement of petitioner
and others in the illegal cutting of mahogany trees and hauling of illegally-cut logs in the area. 2

On 1 August 1989 Atty. Francis Palmones, counsel for petitioner, wrote the Office of the Ombudsman in Davao City
requesting that he be furnished copy of the complaint against petitioner. Atty. Palmones then asked his client Ursua to
take his letter-request to the Office of the Ombudsman because his law firm's messenger, Oscar Perez, had to attend to
some personal matters. Before proceeding to the Office of the Ombudsman petitioner talked to Oscar Perez and told him
that he was reluctant to personally ask for the document since he was one of the respondents before the Ombudsman.
However, Perez advised him not to worry as he could just sign his (Perez) name if ever he would be required to
acknowledge receipt of the complaint. 3

When petitioner arrived at the Office of the Ombudsman in Davao City he was instructed by the security officer to register
in the visitors' logbook. Instead of writing down his name petitioner wrote the name "Oscar Perez" after which he was told
to proceed to the Administrative Division for the copy of the complaint he needed. He handed the letter of Atty. Palmones
to the Chief of the Administrative Division, Ms. Loida Kahulugan, who then gave him a copy of the complaint, receipt of
which he acknowledged by writing the name "Oscar Perez." 4

Before petitioner could leave the premises he was greeted by an acquaintance, Josefa Amparo, who also worked in the
same office. They conversed for a while then he left. When Loida learned that the person who introduced himself as
"Oscar Perez" was actually petitioner Cesario Ursua, a customer of Josefa Amparo in her gasoline station, Loida reported
the matter to the Deputy Ombudsman who recommended that petitioner be accordingly charged.

On 18 December 1990, after the prosecution had completed the presentation of its evidence, petitioner without leave of
court filed a demurrer to evidence alleging that the failure of the prosecution to prove that his supposedalias was different
from his registered name in the local civil registry was fatal to its cause. Petitioner argued that no document from the local
civil registry was presented to show the registered name of accused which according to him was a condition sine qua
non for the validity of his conviction.

The trial court rejected his contentions and found him guilty of violating Sec. 1 of C.A. No. 142 as amended by R.A. No.
6085. He was sentenced to suffer a prison term of one (1) year and one (1) day of prision correccionalminimum as
minimum, to four (4) years of prision correccional medium as maximum, with all the accessory penalties provided for by
law, and to pay a fine of P4,000.00 plus costs.

Petitioner appealed to the Court of Appeals.

On 31 May 1993 the Court of Appeals affirmed the conviction of petitioner but modified the penalty by imposing an
indeterminate term of one (1) year as minimum to three (3) years as maximum and a fine of P5,000.00.

Petitioner now comes to us for review of his conviction as he reasserts his innocence. He contends that he has not
violated C.A. No. 142 as amended by R.A. No. 6085 as he never used any alias name; neither is "Oscar Perez" hisalias.
An alias, according to him, is a term which connotes the habitual use of another name by which a person is also known.
He claims that he has never been known as "Oscar Perez" and that he only used such name on one occasion and it was
with the express consent of Oscar Perez himself. It is his position that an essential requirement for a conviction under
C.A. No. 142 as amended by R.A. No. 6085 has not been complied with when the prosecution failed to prove that his
supposed alias was different from his registered name in the Registry of Births. He further argues that the Court of
Appeals erred in not considering the defense theory that he was charged under the wrong law. 5

Time and again we have decreed that statutes are to be construed in the light of the purposes to be achieved and the
evils sought to be remedied. Thus in construing a statute the reason for its enactment should be kept in mind and the
statute should be construed with reference to the intended scope and purpose. 6 The court may consider the spirit and
reason of the statute, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear
purpose of the lawmakers. 7

For a clear understanding of the purpose of C.A. No. 142 as amended, which was allegedly violated by petitioner, and the
surrounding circumstances under which the law was enacted, the pertinent provisions thereof, its amendments and
related statutes are herein cited. C.A. No. 142, which was approved on 7 November 1936, and before its amendment by
R.A. No. 6085, is entitled An Act to Regulate the Use of Aliases. It provides as follows:

Sec. 1. Except as a pseudonym for literary purposes, no person shall use any name different from the
one with which he was christened or by which he has been known since his childhood, or such substitute
name as may have been authorized by a competent court. The name shall comprise the patronymic
name and one or two surnames.

Sec. 2. Any person desiring to use an alias or aliases shall apply for authority therefor in proceedings like
those legally provided to obtain judicial authority for a change of name. Separate proceedings shall be
had for each alias, and each new petition shall set forth the original name and the alias oraliases for the
use of which judicial authority has been, obtained, specifying the proceedings and the date on which such
authority was granted. Judicial authorities for the use of aliases shall be recorded in the proper civil
register . . . .

The above law was subsequently amended by R.A. No. 6085, approved on 4 August 1969. As amended, C.A. No. 142
now reads:

Sec. 1. Except as a pseudonym solely for literary, cinema, television, radio or other entertainment
purposes and in athletic events where the use of pseudonym is a normally accepted practice, no person
shall use any name different from the one with which he was registered at birth in the office of the local
civil registry or with which he was baptized for the first time, or in case of all alien, with which he was
registered in the bureau of immigration upon entry; or such substitute name as may have been authorized
by a competent court: Provided, That persons whose births have not been registered in any local civil
registry and who have not been baptized, have one year from the approval of this act within which to
register their names in the civil registry of their residence. The name shall comprise the patronymic name
and one or two surnames.

Sec. 2. Any person desiring to use an alias shall apply for authority therefor in proceedings like those
legally provided to obtain judicial authority for a change of name and no person shall be allowed to secure
such judicial authority for more than one alias. The petition for an alias shall set forth the person's
baptismal and family name and the name recorded in the civil registry, if different, his immigrant's name, if
an alien, and his pseudonym, if he has such names other than his original or real name, specifying the
reason or reasons for the desired alias. The judicial authority for the use ofalias, the Christian name and
the alien immigrant's name shall be recorded in the proper local civil registry, and no person shall use any
name or names other than his original or real name unless the same is or are duly recorded in the proper
local civil registry.

The objective and purpose of C.A. No. 142 have their origin and basis in Act No. 3883, An Act to Regulate the Use in
Business Transactions of Names other than True Names, Prescribing the Duties of the Director of the Bureau of
Commerce and Industry in its Enforcement, Providing Penalties for Violations thereof, and for other purposes, which was
approved on 14 November 1931 and amended by Act No. 4147, approved on 28 November 1934. 8 The pertinent
provisions of Act No. 3883 as amended follow —

Sec. 1. It shall be unlawful for any person to use or sign, on any written or printed receipt including receipt
for tax or business or any written or printed contract not verified by a notary public or on any written or
printed evidence of any agreement or business transactions, any name used in connection with his
business other than his true name, or keep conspicuously exhibited in plain view in or at the place where
his business is conducted, if he is engaged in a business, any sign announcing a firm name or business
name or style without first registering such other name, or such firm name, or business name or style in
the Bureau of Commerce together with his true name and that of any other person having a joint or
common interest with him in such contract, agreement, business transaction, or business . . . .

For a bit of history, the enactment of C.A. No. 142 as amended was made primarily to curb the common practice among
the Chinese of adopting scores of different names and aliases which created tremendous confusion in the field of trade.
Such a practice almost bordered on the crime of using fictitious names which for obvious reasons could not be
successfully maintained against the Chinese who, rightly or wrongly, claimed they possessed a thousand and one names.
C.A. No. 142 thus penalized the act of using an alias name, unless such alias was duly authorized by proper judicial
proceedings and recorded in the civil register. 9

In Yu Kheng Chiau v. Republic 10 the Court had occasion to explain the meaning, concept and ill effects of the use of
analias within the purview of C.A. No. 142 when we ruled —

There can hardly be any doubt that petitioner's use of alias "Kheng Chiau Young" in addition to his real
name "Yu Cheng Chiau" would add to more confusion. That he is known in his business, as manager of
the Robert Reid, Inc., by the former name, is not sufficient reason to allow him its use. After all, petitioner
admitted that he is known to his associates by both names. In fact, the Anselmo Trinidad, Inc., of which
he is a customer, knows him by his real name. Neither would the fact that he had encountered certain
difficulties in his transactions with government offices which required him to explain why he bore two
names, justify the grant of his petition, for petitioner could easily avoid said difficulties by simply using and
sticking only to his real name "Yu Kheng Chiau."
 The fact that petitioner intends to reside permanently in the Philippines, as shown by his having filed a
petition for naturalization in Branch V of the above-mentioned court, argues the more against the grant of
his petition, because if naturalized as a Filipino citizen, there would then be no necessity for his further
using said alias, as it would be contrary to the usual Filipino way and practice of using only one name in
ordinary as well as business transactions. And, as the lower court correctly observed, if he believes (after
he is naturalized) that it would be better for him to write his name following the Occidental method, "he
can easily file a petition for change of name, so that in lieu of the name "Yu Kheng Chian," he can,
abandoning the same, ask for authority to adopt the name Kheng Chiau Young."

All things considered, we are of the opinion and so hold, that petitioner has not shown satisfactory proper
and reasonable grounds under the aforequoted provisions of Commonwealth Act No. 142 and the Rules
of Court, to warrant the grant of his petition for the use of an alias name.

Clearly therefore an alias is a name or names used by a person or intended to be used by him publicly and habitually
usually in business transactions in addition to his real name by which he is registered at birth or baptized the first time or
substitute name authorized by a competent authority. A man's name is simply the sound or sounds by which he is
commonly designated by his fellows and by which they distinguish him but sometimes a man is known by several different
names and these are known as aliases. 11 Hence, the use of a fictitious name or a different name belonging to another
person in a single instance without any sign or indication that the user intends to be known by this name in addition to his
real name from that day forth does not fall within the prohibition contained in C.A. No. 142 as amended. This is so in the
case at bench.

It is not disputed that petitioner introduced himself in the Office of the Ombudsman as "Oscar Perez," which was the name
of the messenger of his lawyer who should have brought the letter to that office in the first place instead of petitioner. He
did so while merely serving the request of his lawyer to obtain a copy of the complaint in which petitioner was a
respondent. There is no question then that "Oscar Perez" is not an alias name of petitioner. There is no evidence showing
that he had used or was intending to use that name as his second name in addition to his real name. The use of the name
"Oscar Perez" was made by petitioner in an isolated transaction where he was not even legally required to expose his real
identity. For, even if he had identified himself properly at the Office of the Ombudsman, petitioner would still be able to get
a copy of the complaint as a matter of right, and the Office of the Ombudsman could not refuse him because the
complaint was part of public records hence open to inspection and examination by anyone under the proper
circumstances.

While the act of petitioner may be covered by other provisions of law, such does not constitute an offense within the
concept of C.A. No. 142 as amended under which he is prosecuted. The confusion and fraud in business transactions
which the anti-alias law and its related statutes seek to prevent are not present here as the circumstances are peculiar
and distinct from those contemplated by the legislature in enacting C.A. No. 142 as amended. There exists a valid
presumption that undesirable consequences were never intended by a legislative measure and that a construction of
which the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful,
evil and injurious consequences. 12 Moreover, as C.A. No. 142 is a penal statute, it should be construed strictly against
the State and in favor of the accused. 13 The reason for this principle is the tenderness of the law for the rights of
individuals and the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion of
the court limited. 14 Indeed, our mind cannot rest easy on the proposition that petitioner should be convicted on a law that
does not clearly penalize the act done by him.

WHEREFORE, the questioned decision of the Court of Appeals affirming that of the Regional Trial Court of Davao City is
REVERSED and SET ASIDE and petitioner CESARIO URSUA is ACQUITTED of the crime charged.