Caltex vs.

Palomar
Caltex v. Palomar
GR L-19650, 29 September 1966 (18 SCRA 247)
Facts:
In 1960, Caltex (Phils) Inc. conceived a promotional scheme Caltex Hooded Pump
Contest calculated to drum up patronage for its products, calling for participants
therein to estimate the actual number of liters a hooded gas pump at each Caltex
station will dispense during a specified period. For the privilege to participate, no
fee or consideration is required to be paid. Neither a purchase of Caltex products is
required. Entry forms were available upon request at each Caltex station where a
sealed can was provided for the deposit of accomplished entry stubs. Foreseeing
the extensive use of the mails, not only as amongst the mediator 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, in view of sections 1954(a), 1982 and 1983 of the
Revised Administrative Code. Such overtures were formalized in a letter to the
Postmaster General, dated 31 October 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 Enrico Palomar opined that the scheme falls
within the purview of the provisions aforesaid and declined to grant the requested
clearance.
Caltex thereupon invoked judicial intervention by filing a petition for declaratory
relief against the Postmaster General, 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. The trial court ruled that the contest does not violate the
Postal Code and that the Postmaster General has no right to bar the public
distribution of the contest rules by the mails. The Postmaster General appealed to
the Supreme Court.
Issue(s):
Whether construction should be employed in the case.
Whether the contest is a lottery or a gift enterprise that violates the provisions of
the Postal Law.
Held:
Construction 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. In the present case, the
prohibitive provisions of the Postal Law inescapably require an inquiry into the
intended meaning of the words used therein. This is as much a question of
construction or interpretation as any other. The Court is tasked to look beyond the
fair exterior, to the substance, in order to unmask the real element and pernicious
tendencies that the law is seeking to prevent.

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: (1) consideration, (2)
prize, and (3) chance. Gift enterprise, on the other hand, is commonly applied to a
sporting artifice under which goods are sold for their market value but by way of
inducement each purchaser is given a chance to win a prize. Further, consonant to
the well-known principle of legal hermeneutics noscitur a sociis, the term under
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.
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. Thus, gift enterprises and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of
consideration. In the present case, there is no requirement in the rules that any fee
be paid, any merchandise be bought, any service be rendered, or any value
whatsoever be given for the privilege to participate; for the scheme to be deemed a
lottery. Neither is there is a sale of anything to which the chance offered is attached
as an inducement to the purchaser for the scheme to be deemed a gift enterprise.
The scheme is merely a gratuitous distribution of property by chance.
The Supreme Court affirmed the appealed judgment, without costs.

G.R. No. L-23487

February 11, 1925

LIM CO CHUI, petitioner,

vs. JUAN POSADAS, JR., Collector of Internal Revenue, respondent.
Feria and Law O and Ramon R. San Jose for petitioner.
Attorney-General Villa-Real for respondent.
MALCOLM, J.:
These are original proceedings in mandamus brought by the Chinese merchant Lim
Co Chui, hereafter referred to as the petitioner, against Juan Posadas, Collector of
Internal Revenue, hereafter referred to as the respondent, which have arisen out of
the riots directed against the Chinese between October 18 and October 20, 1924,
and which have for their purpose the remission of the penalties imposed on the
Chinese for failure to pay their sales taxes on time. The demurrer interposed by the
Attorney-General rests on the statutory ground that the complaint does not state
facts sufficient to constitute a cause of action.
The petitioner is a Chinese alien residing in the City of Manila, Philippines. He is the
owner of three dry goods stores located in Manila. During the quarter comprising
the months of July, August, and September, 1924, the amounted to P33,808.34. The
tax of one and one-half per cent on the business transacted during this calendar
quarter was P507.13.
On October 18, 19, and 20, 1924, there existed in the City of Manila a riot against
the Chinese. Under such conditions, they were forced to stay in their homes,
especially on October 20th when the riot was at its height. As alleged in the
complaint, "in order to end said riot it was thought proper and expedient on the part
of the Chinese citizens to close their homes and stores and in fact they did close
them as a result of a mutual agreement had thereon."
On account of the conditions above described, the petitioner was prevented from
making a return on October 20, 1924, the last day for paying the taxes due. Instead,
on that day a representative of the Chinese Chamber of Commerce acting for on
behalf of all Chinese citizens, requested the respondent to extend the time
prescribed for the payment of the taxes. This request was denied by the respondent
on the ground that he had no authority to grant it. Subsequently, the same
representative of the Chinese asked the respondent to accept payment of taxes due
on the business conducted by all Chinese citizens which they were not able to pay
on October 20, 1924, without requiring the additional increase of twenty-five per
cent as a penalty.
On October 21, 1924, the petitioner tendered payment to the respondent of the tax
due on his business, stating at the same time that his delay was due to the riot. On
November 3, 1924, the respondent refused to accept said payment saying that
according to existing law, he had neither power nor discretion to accept the tax

without the additional penalty of twenty-five per cent. On request for

reconsideration, the respondent again declared that he lacked power to grant the
request, although admitting that the additional tax of twenty-five per cent "seems
unjust and excessive."
On the above facts taken from the allegations of the complaint as admitted by the
respondent, we are asked to declare that the Collector of Internal Revenue has
discretionary power to remit additional percentage taxes and are asked to require
the said Collector to exercise his discretion. Two provisions of law, sections 1458
and 1582 of the Administrative Code as amended, are cited in support of the
petition.
Section 1458 of the Administrative Code, as last amended by Act No. 3074, provides
the following: "The percentage taxes on business shall be payable at the end of
each calendar quarter in the amount lawfully due on the business transacted during
each quarter ... . If the percentage tax on any business is not paid within the time
prescribed above the amount of the tax shall be increased by twenty-five per
centum, the increment to be a part of the tax." This provision is mandatory. It
provides a plan which works out automatically. It confers no discretion on the
Collector of Internal Revenue. That official may not disregard the law and substitute
therefor his own personal judgment.
Section 1582 of the Administrative Code, as amended by Act No. 2835, provides the
following: "The Collector of Internal Revenue ... may remit before payment any tax
that appears to be unjustly assessed or excessive." This provision confers discretion
on the Collector of Internal Revenue in certain cases but not in the instant case. The
twenty-five per cent penalty for non-payment is not "unjustly assessed" because it
is assessed at all, and is not "excessive" because it is merely the amount
specifically fixed by the law. The Collector of Internal Revenue simply collects that
which the law has said that he must collect. He is not authorized to refund taxes as
a matter of gratuity.
It may possibly be, as intimated by Judge Cooley in his standard treatise on
Taxation, volume 2, page 901, that "there might be excuses for non-payment which
would justify the interference of the courts." The maxim is: Impossibilium nulla
obligatio est. There is no obligation to do impossible things. But here, there is no
allegation in the complaint that the inability of the Chinese to pay their taxes on
time was due to any order by the Government or to any action taken by the
Government, and no allegation that the delay in payment was caused by the fault of
him to whom it was to be paid. On the contrary, the averment in the complaint is
that the Chinese closed their homes and stores and stayed therein "as a result of a
mutual agreement had thereon."
The demurrer is sustained, and unless the petitioner shall within a period of five
days so amend his complaint as to state a cause of action, it shall be dismissed with
costs against him. So ordered.
Villamor, Ostrand, Johns, and Romualdez, JJ., concur.

Separate Opinions
JOHNSON, Acting Chief Justice, concurring:
I agree that the writ of mandamus should not issue in the present case. I am of the
opinion, however, in the interest of justice, that the discretion conferred upon the
respondent should have been exercised in favor of the petitioner. It is clear to my
mind that, by reason of the existence of a riot in the City of Manila at the time the
taxes became due and payable, it was impossible for the petitioner to have left his
house or place of business. It was not his fault. He did all he could to pay his taxes
when due, and should not have been penalized for things which he could not
prevent. The respondent had a discretion to grant relief to the petitioner and should
have done so as a matter of simple justice.

Manila Jockey Club v. Games and Amusement Board

Facts:
The authorized racing days specifically designated and distributed in Section 4 of RA
309 the basic law on horse racing in the Philippines amended by RA 983 are as
follows: (1) Philippine Anti-TB Society for 12 Sundays, (2) PCSO - 6 Sundays (3)
White Cross - 4 Sundays (4) Grand Derby Race of PATS - 1 Sunday (5) Private
Individuals and entities - 29 Sundays.
However, RA 1502 increased the sweepstakes draw and races of the PCSO from 6 to
12 Sundays, but without specifying the days on which they are to be run.
To accommodate these additional races, GAB resolved to reduce the number of
Sundays assigned to private individuals and entities by six.
Appellants protested that the said increase should be taken from the 12 Saturdays
reserved to the President, for charitable relief OR should be assigned to any day of
the week besides Sunday, Saturday and Legal Holiday.
Issues:
(1) Whether or not the petitioner has a vested right to the unreserved Sundays.
(2) Whether or not the additional sweepstakes races must be inserted in club races
as debated in the House of Representatives in the voting of HB 5732/RA1502.
Held:
(1) No, the appellant has no vested right to the unreserved Sundays, or even to the
24 Saturdays (except holidays) because their holding on races for these days are
merely permissive, subject to the licensing and determination by the GAB. When,
therefore, RA 1502 was enacted increasing by 6 the sweepstakes draw and races
but without specifying the days for holding them, the GAB had no alternative except
to make room for the additional races, as it did, form among the only available
racing days unreserved by any law - the Sundays on which the private individuals
and entities have been permitted to hold their races, subject to licensing and
determination by GAB.
(2) No. There is nothing in Republic Act No. 1502, as it was finally enacted, which
would indicate that such an understanding on the part of these two members of the
Lower House of Congress were received the sanction or conformity of their
colleagues, for the law is absolutely devoid of any such indication.
In the interpretation of a legal document, especially a statute, unlike in the
interpretation of an ordinary written document, it is not enough to obtain
information to the intention or meaning of the author or authors, but also to see
whether the intention or meaning has been expressed in such a way as to give it
legal effect and validity. In short, the purpose of the inquiry, is not only to know
what the author meant by the language he used, but also to see that the language
used sufficiently expresses that meaning.

The language of Republic Act No. 1502 in authorizing the increase, clearly speaks of
regular sweepstakes draws and races. If the intention of Congress were to authorize
additional sweepstakes draws only which could, admittedly, be inserted in the club
races, the law would not have included regular races; and since regular
sweepstakes races were specifically authorized, and it would be confusing,
inconvenient, if not impossible to mix these sweepstakes races with the regular club
races all on the same day (and it has never been done before), the conclusion
seems inevitable that the additional sweepstakes draws and races were intended to
be held on a whole day, separate and apart from the club races.

GR No. L-30061 (February 27, 1974)

People vs. Jabinal
FACTS:
Jabinal was found guilty of the crime of Illegal Possession of Firearm and
Ammunition.
The accused admitted that on September 5, 1964, he was in possession of the
revolver and the ammunition described in the complaint, without the requisite
license or permit. He, however, claimed to be entitled to exoneration because,
although he had no license or permit, he had an appointment as Secret Agent from
the Provincial Governor of Batangas and an appointment as Confidential Agent from
the PC Provincial Commander, and the said appointments expressly carried with
them the authority to possess and carry the firearm in question.
The accused contended before the court a quo that in view of his above-mentioned
appointments as Secret Agent and Confidential Agent, with authority to possess the
firearm subject matter of the prosecution, he was entitled to acquittal on the basis
of the Supreme Courts decision in People vs. Macarandang(1959) and People vs.
Lucero(1958) and not on the basis of the latest reversal and abandonment in People
vs. Mapa (1967).
ISSUE:
Whether or not appellant should be acquitted on the basis of the courts rulings in
Macarandang and Lucero, or should his conviction stand in view of the complete
reversal of the MAcarandang and Lucero doctrine in Mapa.
RULING:
Decisions of this Court, under Article 8 of the New Civil Code states that Judicial
decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system . The settled rule supported by numerous authorities is a
restatement of legal maxim legis interpretatio legis vim obtinet the
interpretation placed upon the written law by a competent court has the force of
law.
Appellant was appointed as Secret Agent and Confidential Agent and authorized to
possess a firearm pursuant to the prevailing doctrine enunciated in Macarandang
and Lucero under which no criminal liability would attach to his possession of said
firearm in spite of the absence of a license and permit therefor, appellant must be
absolved. Certainly, appellant may not be punished for an act which at the time it
was done was held not to be punishable.

The appellant was acquitted.

People of the Philippines vs. M. Mapa

G.R. No. L-22301
August 30, 1967
En Banc
Facts:
The accused was convicted in violation of Sec. 878 in connection to Sec. 2692 of the
Revised Administrative Code as amended by Commonwealth Act No. 56 and further
amended by R.A. 4. On August 13, 1962, the accused was discovered to have in its
possession and control a home-made revolver cal. 22 with no license permit. In the
court proceeding, the accused admitted that he owns the gun and affirmed that it
has no license. The accused further stated that he is a secret agent appointed by
Gov. Leviste of Batangas and showed evidences of appointment. In his defense, the
accused presented the case of People vs. Macarandang, stating that he must
acquitted because he is a secret agent and which may qualify into peace officers
equivalent to municipal police which is covered by Art. 879.
Issue:
Whether or not holding a position of secret agent of the Governor is a proper
defense to illegal possession of firearms.
Ruling:
The Supreme Court in its decision affirmed the lower courts decision. It stated that
the law is explicit that except as thereafter specifically allowed, "it shall be unlawful
for any person to . . . possess any firearm, detached parts of firearms or ammunition
therefor, or any instrument or implement used or intended to be used in the
manufacture of firearms, parts of firearms, or ammunition." The next section
provides that "firearms and ammunition regularly and lawfully issued to officers,
soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police,
provincial governors, lieutenant governors, provincial treasurers, municipal
treasurers, municipal mayors, and guards of provincial prisoners and jails," are not
covered "when such firearms are in possession of such officials and public servants
for use in the performance of their official duties.
The Court construed that there is no provision for the secret agent; including it in
the list therefore the accused is not exempted.