1

C a l t e x v. P a l o m a r
Corpus Juris Secundum
In 1960, Caltex announced its Caltex Hooded Pump Contest. The aim thereof is to let
participants estimate the actual number of liters a hooded gas pump at each Caltex
station dispense during a specified period. In order to join, 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. 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 and to
make sure that the contest does not violate the anti-lottery provision of the Revised
Administrative Code. Palomar however denied the mailing of such contest rules
according to him violates the said provision. He contends that the contest can be
subject to fraud order if pursued because it falls under 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 which is not allowed by the Postal Law. Caltex referred the case
to the trial court and the trial court ruled in favor of Caltex. Palomar appealed arguing
that Caltex has no sufficient cause of action to seek declaratory relief (and decisions
can only be advisory in nature) and that the proposed contest does violate the Postal
Law.
ISSUE: Whether or not the contest violates the Postal Law (Chap 52 of the Revised
Administrative Code).
HELD: The issue at bar cannot be passed upon. Judgment has to be made otherwise
Caltex will have no definite recourse. Hence, Caltex has sufficient cause of action for
declaratory relief.
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 elements of prize and chance are too obvious in the
disputed scheme to be the subject of contention. 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. 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.
The scheme does not only appear to be, but actually is, a gratuitous distribution of
property by chance. And that the purchase of any Caltex product is not a pre-requisite in
joining the said contest. Further, the required element of consideration does not consist
of the benefit derived by the proponent of the contest. The true test 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. 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. Lottery
and gift enterprise must be construed as the same.

DIGEST 2
Case Title:
G.R. No. L-19650 (September 29, 1966)Caltex (Philippines), Inc. vs. Enrico Palomar in
his capacity as The Postmaster General
1) Facts
The case before us now is a petition for declaratory relief against Postmaster General
EnricoPalomar, parying that judgment be rendered declaring its Caltex Hooded
Pump Contest notto be violative of the Postal Law, and ordering respondent to allow
petitioner the use of the mailsto bring the contest to the attention of the public.In 1960,
Caltex launched a promotional scheme called Caltex Hooded Pump Contest?
which calls for participants to estimate the actual number of liters a hooded gas
pump at eachCaltex station will dispense during a specified period.? The contest is
open to all motor vehicle owners and/or licensed drivres?. There is neither a fee
or consideration required nor a purchase required to be made. The forms are available
upon request at each Caltex station andthere is also a sealed can where accomplished
entry stubs may be deposited.Caltex wishes to use mails amongst the media for
publicizing about the contest, thus, Caltex sentrepresentatives to the postal authorities
for advance clearing for the use of mails for the contest.However, the postal authorities
denied their request in view of sections 1954 (a), 1982, and 1983of the Revised
Administrative Code (Anti-lottery provisions of the Postal Law), which prohibitsthe use of
mail in conveying any information concerning non-mailable schemes, such as lottery,gift
enterprise, or similar scheme.Caltex sought for a reconsideration and stressed that
there was no consideration involved in the part of the contestant(s) but the Postmaster
General maintained their view and even threatenedCaltex that if the contest was
conducted, a fraud order will have to be issued against it(Caltex) and all its
representatives?. This leads to Caltexs filing of this petition for declaratoryrelief.The
court ruled that the petitioner does not violate the Postal Law and the respondent
has noright to bar the public distribution or said rules by the mails?. The respondent
then appealed.

2) Issue(s)
a) Whether or not the petition states a sufficient cause of action for declaratory relief? b)
Whether or not the proposed Caltex Hooded Pump Contest? violates the Postal
Law?
3) Ruling
Recapitulating, we hold that the petition herein states a sufficient cause of action for
declaratoryrelief, and that the Caltex Hooded Pump Contest as described in the rules
submitted by theappellee does not transgress the provisions of the Postal
Law.ACCORDINGLY, the judgment appealed from is affirmed. No costs.
4) Ratio
Declaratory Relief is the interpretation of several constitutional provisions. Based on
Section 1Rule 63 of the Rules of Court, an action for declaratory relief should be filed by
a personinterested under a deed, a will, a contract or other written instrument, and
whose rights areaffected by a statute, an executive order, a regulation or an ordinance.
Requisites for Declaratory Relief:
- There is justiciable controversy- The controversy is between persons whose interests
are adverse- The party seeking the relief has a legal interest in the controversy- The
issue is ripe for judicial determination* The Caltex Hooded Pump Contest? is a
mere gratuitous distribution of property bychance?. It does not qualify as a lottery
due to the lack of consideration. An act to be deemedas a lottery must constitute a (1)
prize, (2) chance, and (3) consideration. The participants are notrequired to do anything
or purchase anything from Caltex in order to participate in the contest.The true test for
having consideration is whether the participant pays a valuableconsideration for the
chance, and not whether those conducting the enterprise receive somethingof value in
return for the distribution of the prize.?