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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; andsecond, whether the proposed "Caltex Hooded Pump Contest" violates
the Postal Law. We shall take these upin 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. 1aw phîl.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.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon,

J.P., Zaldivar and Sanchez, JJ., concur.

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