Caltex v.

PalomarGR L-19650, 29 September 1966 (18 SCRA 247)En Banc, Castro (p): 9 concurring 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):

W 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 I 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. Chartered Bank Employees Association v. OpleGR L-44717, 28 August 1985 (138 SCRA 273)En Banc, Gutierrez, Jr. (p): 10 concur, 1 concur in result, 1 took no part, 1 on leave Facts: On 20 May 1975, the Chartered Bank Employees Association, in representation of its monthly paid employees/members, instituted a complaint with the Regional Office IV, Department of Labor, now Ministry of Labor and Employment (MOLE) against Chartered Bank, for the payment of 10 unworked legal holidays, as well as for premium and overtime differentials for worked legal holidays from 1 November 1974. Both the arbitrator and the National Labor Relations Commission (NLRC) ruled in favor of the petitioners ordering the bank to pay its monthly paid employees the holiday pay and the premium or overtime pay differentials to all employees who rendered work during said legal holidays. On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed the petitioners claim for lack of merit basing its decision on Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction 9, claiming the rule that If the monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid the 10 paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the 10 paid legal holidays.

Issue: Whether the Ministry of Labor is correct in maintaining that monthly paid employees are not entitled to the holiday pay nor all employees who rendered work during said legal holidays are entitled to the premium or overtime pay differentials. Held: When the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. An administrative interpretation, which diminishes the benefits of labor more than what the statute delimits or withholds, is obviously ultra vires. In the present case, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit, it provides for both the coverage of and exclusion from the benefit. In Policy Instruction 9, the Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay. While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts, still if such construction is so erroneous, the same must be declared as null and void. It is the role of the Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government, almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power. Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy Instruction was declared null and void in IBAAEU v. Inciong, and thus applies in the case at bar. Since the private respondent premises its action on the invalidated rule and policy instruction, it is clear that the employees belonging to the petitioner association are entitled to the payment of 10 legal holidays under Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not among those excluded by law from the benefits of such holiday pay The Supreme Court reversed and set aside the Labor Ministers 7 September 1976 order, and reinstated with modification (deleting the interest payments) the 24 March 1976 decision of the NLRC affirming

the 30 October 1975 resolution of the Labor Arbiter.