Diokno v.

Rehabilitation Finance Corporation

G.R. No. L-4712 (July 11, 1952)

FACTS:

Petitioner, the holder of a back pay certificate of indebtedness issued under RA 304, sought to compel Respondent company to accept his back
pay certificate as payment of his loan from the latter. His basis was Sec. 2 of RA 304, which provides that investment funds or banks or other
financial institutions owned or controlled by the government shall subject to availability of loanable funds accept or
discount at not more than two per centum per annum for ten years such certificate for certain specified
purposes. Respondent company contended however that the word shall used in this particular section of the law is merely directory. The
lower court sustained Respondent company.

ISSUE:

W/N Petitioner can use his back pay certificate to pay for his loan to Respondent company.

HELD:

No. It is true that in its ordinary signification, the word shall is imperative. However, the rule is not absolute; it may be construed as may
when required by the context or by the intention of the statute. The modifier, at not more than two per centum per annum for ten
years., the interest to be charged, that the verb phrase is mandatory because not only the law uses at not more but the legislative purpose
and intent, to conserve the value of the back pay certificate for the benefit of the holders, for whose benefit the same have been issued, can be
carried out by fixing a maximum limit for discounts. But as to when the discounting or acceptance shall be made, the context and the sense
demand a contrary interpretation. If the acceptance or discount of the certificate is to be subject to the condition of the
availability of loanable funds, it is evident the legislature intended that the acceptance shall be allowed on the condition that there are
available loanable funds. In other words, acceptance or discount is to be permitted only if there are loanable funds.
Caltex Philippines, Inc., petitioner-appellee

Vs.

Enrico Palomar, in his capacity as The Postmaster General, respondent-appellant

FACTS:

In the year 1960, Caltex Philippines conceived and laid the ground work for a promotional scheme calculated to drum up patronage for its
oil products. The contest was entitled Caltex Hooded Pump Contest, which calls for participants to estimate the actual number of liters as
hooded gas pump at each Caltex station will dispense during a specific period.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of
communications, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing. This was
formalized in a letter sent by Caltex to the Post master General, dated October 31, 1960, in which Caltex, thru its counsel, enclosed a copy of the
contest rules and endeavored to justify its position that the contest does not violate the The Anti-Lottery Provisions of the Postal Law.

Unfortunately, the Palomar, the acting Postmaster General denied Caltexs request stating that the contest scheme falls within the
purview of the Anti-lottery Provision and ultimately, declined Clatexs request for clearance.

Caltex sought reconsideration, stressing that there being no consideration involved in part of the contestant, the contest was not
commendable as a lottery. However, the Postmaster General maintained his view that the contest involves consideration, or even it does not
involve any consideration it still falls as Gift Enterprise, which was equally banned by the Postal Law.

ISSUE:

1. Whether the petition states a sufficient cause of action for declaratory relief?

2. Whether or not the scheme proposed by Caltex the appellee is within the coverage of the prohibitive provisions of the Postal Law?

HELD:

I. By express mandate of Section 1 of Rule 66 of the old Rules of Court which deals with the applicability to invoke declaratory relief which
states: Declaratory relief is available to 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 rights thereunder.

In amplification, conformably established jurisprudence on the matter, laid down certain conditions:
 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.

4. The issue involved must be ripe for judicial determination.

With the appellees bent to hold the contest and the appellants threat to issue a fraud order if carried out, the contenders are confronted by an
ominous shadow of imminent and inevitable litigation unless their differences are settled and stabilized by a declaration. And, contrary to the
insinuation of the appellant, the time is long past when it can rightly be said that merely the appellees 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.

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.

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.

II. Is the Contest Scheme a Lottery?

Lottery

Extends to all schemes for the distribution of prizes by chance

e.g. policy playing, gift exhibitions, prize concerts, raffles and fairs as well as various forms of gambling.

Three Essential Elements:

1. Consideration
 2. Prize

3. 3. Chance

No, according to the Supreme Court, the contest scheme is not a lottery but it appears to be more of a gratuitous distribution since
nowhere in the rules is any requirements that any fee be paid, any merchandise be bought, any services be rendered, or any value whatsoever
be given for the privilege to participate. Since, a prospective contestant has to do is 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. Because of this, the contest fails to exhibit any
discernible consideration which would brand it as a lottery.

Moreover, 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 it does condemn as criminal scheme in which a valuable consideration of some kind is paid directly or
indirectly for the chance to draw a prize.

Is the scheme, as sales promotion which would benefit the sponsor in the way of increased patronage be considered as a consideration and
thus violates the Postal Law?

No, the required element of consideration does not consist of the benefit derived by the sponsors of the contest. The true test lies on
whether or not the participant pays a valuable consideration for the chance of winning and not whether or not those conducting the enterprise
receiver something of value for the distribution of the prize.

Is the Contest Scheme a Gift Enterprise?

Even if the term Gift Enterprise is not yet defined explicitly, there appears to be a consensus among lexicographers and standard
authorities that the term is common applied to a sporting artifice of under which goods are sold for their market value but by way of
inducement to purchase the product, the purchaser is given a chance to win a prize.

And thus, the term of gift enterprise cannot be established in the case at bar since there is not sale of anything to which the chance
offered is attached as an inducement to the purchaser. The contest is open to all qualified contestant irrespective of whether or not they buy the
appellees products.

The lesson that we derive from this state of the pertinent jurisprudence is that every case must be resolved upon the particular phraseology of
the applicable statutory provision. 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.
In the end, the Supreme Court ruled out that under the prohibitive provision of the Postal Law, gift enterprise and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding non in the contest, it was ruled out
that the appellee may not be denied the use of the mails for the purpose thereof.

SAN MIGUEL CORPORATION vs NATIONAL LABOR RELATIONS COMMISSION and RUSTICO VEGA G.R. No. 80774, May 31, 1988

FACTS:

San Miguel Corporation sponsored an Innovation Program and under which, the management undertook to grant cash awards to all SMC
employees except higher-ranked personnel who submit to the Corporation ideas and suggestions found to be beneficial to the Corporation.
Rustico Vega then submitted a proposal but was not accepted. Vega filed a complaint against the company with the Regional Arbitration Branch
No. VII, contending that he should be paid 60,000 since his idea was implemented. The petitioner in his answer stated that they turned down
the proposal for lack of originality. The labor Arbiter dismissed the complaint on the ground that the money claim is not a necessary incident of
his employment. Upon appeal of Vega to the NLRC, it ordered the petitioner to pay the 60,0000. Petitioner then seek to annul the judgment on
the ground that the Labor Arbiter and NLRC have no jurisdiction over the case.

ISSUE:

Whether or not the fact that the money claim of an employee arose out of or in connection with employment relation with his company, is
enough to bring such money claim within the original and exclusive jurisdiction of Labor Arbiter.

HELD:
No, just because the claim arises from employer-employee relationship, it does not follow that it is automatically within the jurisdiction of the
Labor Arbiter.

The companys undertaking, though unilateral in origin, could nonetheless ripen into an enforceable contractual (facio ut des) obligation on the
part of petitioner Corporation under certain circumstances. Thus, whether or not an enforceable contract, albeit implied arid innominate, had
arisen between petitioner Corporation and private respondent Vega in the circumstances of this case, and if so, whether or not it had been
breached, are preeminently legal questions, questions not to be resolved by referring to labor legislation and having nothing to do with wages or
other terms and conditions of employment, but rather having recourse to our law on contracts.

If the relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but
by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the Labor Arbiter and the NLRC. In
such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil law.the appellee may not be denied the use of the mails for the
purpose thereof.