Lapitan vs.

Philippine Charity Sweepstakes Office

Manuel Uy filed a complaint with the Court of First Instance of Manila (Civil Case No. 55678) against the
Postmaster General, praying for an injunction to restrain said Postmaster General and his subordinates,
agents or representatives from enforcing Fraud Order No. 3, dated November 22, 1963, declaring Manuel
Uy Sweepstakes Agency as conducting a lottery or gift enterprise and directing all postmasters and other
employees of the Bureau of Posts concerned to return to the sender any mail matter addressed to Manuel
Uy Sweepstakes Agency or to any of its agents or representatives with the notation "Fraudulent" stamped
upon the cover of such mail matter, and prohibiting the issuance or payment of any money order or
telegraphic transfer to the said agency or to any of its agents and representatives.

As prayed for in the complaint, a writ of preliminary injunction was issued ex parte by the lower court. The
Postmaster General moved for the dissolution of the writ of preliminary injunction, but the motion was
denied.

The Postmaster General filed an answer to the complaint, setting up the defense that Manuel Uy was
conducting a lottery or gift enterprise that is prohibited by law; that as Postmaster General he has the
authority to issue the fraud order in question and he did not abuse his discretion in doing so; and that
Manuel Uy had not exhausted all the administrative remedies before invoking judicial intervention.

The lower court, on the basis of the stipulation of facts submitted by the parties declared Fraud Order No. 3
contrary to law and violative of the rights of the plaintiff and made permanent the preliminary injunction
previously issued.

The Postmaster General appealed to this Court.

The salient facts gathered from the stipulation of facts and culled from the briefs of the parties are as follows:

Manuel Uy (appellee, for short) is a duly authorized agent of the Philippine Charity Sweepstakes Office
(PCSO for short), a government entity created and empowered by law to hold sweepstakes draws and
lotteries for charitable and public purposes. As such agent of the PCSO appellee is engaged in the sale and
distribution of sweepstakes and lottery tickets which the PCSO prints and issues for each and every one of
the not less than twenty draws that said office annually holds. To carry out its business of selling
sweepstakes and lottery tickets issued by the PCSO appellee, upon authority of the said office, employs
sub-agents throughout the Philippines, through which sub-agents not less than 70% of appellee's total sales
for each draw are made; and, with the consent of the PCSO appellee agrees to give 50% of the agent's
prize to the sub-agent selling the prize-winning ticket. The agent's prize is 10% of the prize won by the ticket
sold.

For the Grand Christmas Sweepstakes Draw which would be held on December 15, 1963, the PCSO fixed
the first, second and third prizes at P700,000.00, P350,000.00, and P175,000.00, respectively, and set a
sale goal, of P6,000,000.00 worth of tickets. The PCSO directed its duly authorized agents to undertake
every means possible to help achieve the six-million-peso sales goal. In compliance with said directive,
appellee devised and, through his representatives, offered to the public, the "Grand Christmas Bonus
Award" plan. The plan was designed to boost the sales of tickets for the PCSO Grand Christmas
Sweepstakes Draw. According to said plan, the appellee's sub-agents and purchasers
of whole sweepstakes tickets sold by appellee and his sub-agents may, in addition to the regular prize
money of the December 15, 1963 draw, win bonuses and awards as follows: for the sub-agent and buyer of
the ticket winning the first prize, one 1963 Volkswagen sedan each; for the sub-agent and buyer of the ticket
winning the second prize, one Radiowealth 23-inch television set each; for the sub-agent and buyer of the
ticket winning the third prize, one Radiowealth refrigerator each; for the sub-agents and buyers of the tickets
winning any of the six fourth prizes, one Radiowealth sewing machine each; and for the sub-agent and
buyer of the ticket winning the charity prize, one Radiowealth Fiesta "hi-fi" radio set each. Except for the
amount paid for the authorized prize of the sweepstakes tickets, those entitled to benefit from the plan did
not have to pay any other amount in consideration of the right to benefit from the plan. The awards may be
claimed by presenting to the appellee the sales invoice of the winning tickets, in the case of the sellers, and
the eight shares of the winning tickets, in the case of the buyers.

The aforementioned plan is a modification (or alternative plan, as the appellee calls it) of the original scheme
presented by the appellee, thru counsel, to the Assistant Postmaster General in a letter dated October 15,
1963, and which the latter, in his answer dated October 18, 1963, considered as violative of the Postal Law.

The appellee advertised his "Grand Christmas Bonus Award" plan, as described above, in the metropolitan
newspapers of nationwide circulation, the first of such advertisements appearing in seven such newspapers
in their issues of November 18, 1963. The newspaper advertisements were repeated almost every week
after November 18, 1963, with the last of them published in the issue of the "Daily Mirror" of December 7,
1963.

As already stated, the fraud order in question was issued by the Postmaster-General (appellant, for short)
under date of November 22, 1963. However, it was only on December 10, 1963 that the appellee came to
know of the issuance and context thereof when he sought clarification from the Manila Post Office why his
parcels containing sweepstakes tickets for his sub-agents, as well as his other mail matters of purely
personal nature, were refused acceptance for mailing the day previous.

In the afternoon of December 10, 1963, appellee filed the complaint, mentioned at the beginning of this
opinion, alleging among others, that in issuing Fraud Order No. 3 the appellant "has acted arbitrarily or
gravely exceeded his authority, and/or committed an error of law".  1

Disclaiming that in issuing the fraud order he acted arbitrarily, or gravely exceeded his authority and/or
committed an error of law, appellant, in his answer to the complaint, cites as basis of his action, the
provisions of Sections 1954(a), 1982, and 1983 of the Postal Law (Chapter 52 of the Revised Administrative
Code), pertinent portions of which read:

SEC. 1954. Absolutely nonmailable 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 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:

(a) 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 money or property of any kind by means of false or fraudulent pretenses, representations,
or promises.

xxx     xxx     xxx

SEC. 1982. Fraud orders. — Upon satisfactory evidence that any person or company is engaged in
conducting any lottery, gift enterprise, or scheme or 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 of Posts to return to
the person depositing 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....

SEC. 1983. Deprivation of use of money order system and telegraphic transfer service. — 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.... (Emphasis supplied).

Invoking the phrase "upon evidence satisfactory to him the appellant contends that the fraud order in
question was legally issued because he had been satisfied with the evidence presented to him that appellee
was conducting a lottery or gift enterprise. 2 We note that the appellee does not question the authority of the
appellant, under Sections 1954(a), 1982 and 1983 aforequoted, to prohibit the use of the mails, the money
order system and the telegraphic transfer service for the promotion of lotteries, gift enterprises or fraudulent
schemes. 3 Indeed, appellant would be remiss in the performance of his duties should he fail to exercise his
authority under the Postal Law if and when the mails, the money order system, and the telegraphic transfer
service are utilized for the promotion of lotteries, gift enterprises and similar schemes prohibited by law.
Appellant's authority, however, is not absolute. Neither does the law give him unlimited discretion. The
appellant may only exercise his authority if there is a clear showing that the mails, the money order system
and the telegraphic transfer service are used to promote a scheme or enterprise prohibited by law.

In the present case, therefore, the question that must be resolved is whether appellee's "Grand Christmas
Bonus Award" plan constitutes a lottery, gift enterprise, or similar scheme proscribed by the Postal Law,
aforequoted, as would authorize the appellant to issue the fraud order in question.

Before we resolve the question, however, we wish to advert to the claim of the appellant that he had made
his decision based upon satisfactory evidence that the "Grand Christmas Bonus Award" plan of appellee is a
lottery or gift enterprise for the distribution of gifts by chance, and his decision in this regard cannot be
reviewed by the court. 4 Thus, the appellant, in his brief, 5 says:

It is respectfully submitted that corollary to the rule that courts cannot interfere in the performance of
ordinary duties of the executive department is the equally compelling rule that decisions of the
defendant on questions of fact are final and conclusive and generally cannot be reviewed by the
courts. For it cannot be denied that the Postmaster General is charged with quasi-judicial functions
and vested with discretion in determining what is mailable matter and in withholding from the plaintiff
the privilege of using the mail, the money order system and the telegraphic transfer service... As the
disputed, Fraud Order No. 3 was issued pursuant to the powers vested in the defendant by the
Postal Law and in accordance with satisfactory evidence presented to him, it cannot be said that the
defendant was palpably wrong or that his decision had no reasonable basis whatever. Neither can it
be said that he exceeded his authority nor that he abused his discretion.

In this connection it may be stated that the Postal Law contains no provision for judicial review of the
decision of the Postmaster General. This Court, however, in Reyes vs. Topacio 6 had stated that the action of
the Director of Posts (now Postmaster General) is subject to revision by the courts in case he exceeded his
authority or his act is palpably wrong. And in "El Debate" Inc. vs. Topacio 7 this Court said that the courts will
not interfere with the decision of the Director of Post (Postmaster General) as to what is, and what is not,
mailable matter unless clearly of opinion that it was wrong. In other words, the courts will interfere with the
decision of the Postmaster General if it clearly appears that the decision is wrong. This Court, by said
rulings, recognizes the availability of judicial review over the action of the Postmaster General,
notwithstanding the absence of statutory provision for judicial review of his action. It may not be amiss to
state that said rulings are in consonance with American jurisprudence to the effect that the absence of
statutory provisions for judicial review does not necessarily mean that access to the courts is barred. The
silence of the Congress is not to be construed as indicating a legislative intent to preclude judicial
review. 8 In American School of Magnetic Healing vs. McAnnulty, 9 the U.S. Supreme Court, speaking on the
power of the courts to review the action of the Postmaster General under a statute similar to our Postal
Law, 10 said:

That the conduct of the post office is a part of the administrative department of the government is
entirely true, but that does not necessarily and always oust the courts of jurisdiction to grant relief to
a party aggrieved by any action by the head, or one of the subordinate officials, of that Department,
which is unauthorized by the statute under which he assumes to act. The acts of all its officers must
be justified by some law, and in case an official violates the law to the injury of an individual the
courts generally have jurisdiction to grant relief.

Appellant also invokes the doctrine of exhaustion of administrative remedies, and asserts that the action of
the appellee in the present case was premature because he had not first appealed the fraud order to higher
administrative authorities. This assertion of appellant has no merit. The rule on exhaustion of administrative
remedies is not a hard and fast one. It admits of exceptions, amongst which are: (1) where the question
involved is purely a legal one, 11 and (2) where there are circumstances indicating the urgency of judicial
intervention. 12 The question involved in the present case is legal — whether or not the "Grand Christmas
Bonus Award" plan of appellee, based upon the facts as stipulated, is a lottery or gift enterprise. We take
note that the Grand Christmas Sweepstakes draw in conjunction with which appellee's plan was offered,
was scheduled for December 15, 1963, or barely five days from December 10, 1963, the date when
appellee learned of the issuance of the fraud order. Time was of the essence to the appellee.

We now resolve the main question in this case, namely, whether or not appellee's "Grand Christmas Bonus
Award" plan constitutes a lottery or a gift enterprise. There is no statutory definition of the terms "lottery" and
"gift enterprise". This Court, in the case of "El Debate" Inc. vs. Topacio, supra, referring to lottery, said:

... 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. United States [1902] 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.)

Thus, for lottery to exist, three elements must concur, namely: consideration, prize, and chance.

Appellant maintains that all the elements are present in the "Grand Christmas Bonus Award" plan of the
appellee, to wit: "(1) consideration, because to participate and win in the contest one must buy and resell (in
case of sub-agents) or buy (in case of ticket buyers) only 'Manuel Uy' tickets; (2) prize, because of the
goods to be awarded to the winners; and (3) chance, because the determination of the winners depends
upon the results of the sweepstakes draw which is decidedly a game of chance." 13 With particular emphasis
on the element of consideration, appellant likens this case to the "El Debate" case, supra, and paraphrasing
the ruling therein says that "By analogy there is consideration with respect to persons who will buy 'Manuel
Uy' tickets (in preference to tickets sold by other authorized agents, like Tagumpay, Pelagia Viray, Marcela
Meer Millar, etc.) merely to win prizes in addition to the regular sweepstakes prizes (and it is to such persons
that the scheme is directed); moreover, the persons patronizing the Manuel Uy Sweepstakes Agency do not
all receive same amount and some may receive more than the value paid for their tickets through chance
and the prizes awarded by the Philippine Charity Sweepstakes Office." 14

As against this contention, appellee maintains that there is absence of the element of consideration because
except for paying the authorized purchase price of the corresponding sweepstakes tickets, those entitled to
participate in and to benefit from appellee's "Grand Christmas Bonus Award" plan do not part with any other
consideration for the right to take part and benefit therefrom, which fact is admitted by the
appellant. 15 Further, appellee contends that even under the test laid down in the "El Debate" case, the
element of consideration is lacking because appellee's sub-agents would have continued to sell and the
general public would have continued to buy 'Manuel Uy' tickets regardless of appellee's "Grand Christmas
Bonus Award" plan. 16 Moreover, appellee advances the view that under another test adopted by American
courts as shown by a review of comparative case law in the United States, there can be no consideration
under the plan in question because the participants pay no money or its equivalent into a fund which pays
for the prize. 17

Speaking of the element of consideration, this Court in the aforementioned "El Debate" case, and quoted
in Caltex (Phil.) Inc. vs. Postmaster General, 18 said:

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.

In the "Grand Christmas Bonus Award" plan of the appellee We do not see the presence of the element of
consideration, that is, payment of something of value, or agreement to pay, for the chance to win the bonus
or award offered. True, that to be a participant in said plan, one must have to buy a whole sweepstakes
ticket (8 shares) sold by the Manuel Uy Sweepstakes Agency or by its sub-agents. But the payment for the
price of the sweepstakes ticket is the consideration for the chance to win any of the prizes offered by the
PCSO in the sweepstakes draw of December 15, 1963. Wholly or partly, said payment cannot be deemed
as a consideration also for the chance to win the prizes offered by the appellee. For nothing is asked of, or
received from, the buyer of the ticket more than the authorized price thereof, and which price appears on the
face of the ticket. In fact, appellant admits that except for the price of the ticket, those entitled to participate
and benefit from the plan do not part with any other consideration for the right to take part and benefit
therefrom. 19 Indeed, as correctly observed by the lower court, "there is absolutely no separate consideration
for the right to win any of the offered bonuses or awards."

The analogy drawn by the appellant from the "El Debate" case is not persuasive. On the contrary, the
"reason" or "inducement" test laid down in said case in determining the presence of the element of
consideration seems to favor the appellee. Paraphrased, the test as expressed in the "El Debate" case is: if
the reason for the subscription of the "El Debate" was the desire to subscribe regardless of any prize
offered, then there was no consideration insofar as the prize plan is concerned; upon the other hand, if the
reason for the subscription was to win the prize offered, then the payment of the subscription fee constituted
a consideration for the chance to win the prize. In the instant case, there are two groups of participants, in
appellee's plan, namely: the sub-agents and the ticket buyers. It cannot be denied that the sub-agents who,
as stated in the stipulation of facts, are responsible for not less than 70% of appellee's total sales for every
draw, would have continued to be appellee's sub-agents and would have sold "Manuel Uy" tickets
regardless of the plan in question. Anyway, they stood to receive 50% of the agent's prize for any of the
prize-winning ticket they could sell. Upon the other hand, the probability is that the general public would
have purchased "Manuel Uy" tickets in their desire to win any of the prizes offered by the PCSO regardless
of the inducement offered by the appellee to win additional prizes. This conclusion finds support from the
admitted fact that the appellee has consistently sold the greatest number of tickets among the PCSO'S
authorized agents. 20 And undoubtedly, every person who purchased sweepstakes tickets from the Manuel
Uy Sweepstakes Agency for the December 15, 1963 draw must have been induced, not by the prizes
offered by the appellee but by the substantial prizes offered by the PCSO to wit: First prize, P700,000.00;
Second prize P350,000.00; and Third prize, P175,000.00.

It may not be amiss to state at this juncture that the comparative case law in the United States indicates that
there is another test for determining whether or not the element of consideration exists in a given scheme or
plan so as to constitute the same a lottery under parallel antilottery legislation. In Post Publishing Co. vs.
Murray, 21 it was held:

The advertisement or scheme in question does not seem to be like any of the kinds or types of
wrong against which the Act of Congress was directed. It did not present a lottery scheme because
a lottery involves a scheme for raising money by selling chances to share in the distribution of
prizes — a scheme for the distribution of prizes by chance among persons purchasing tickets. It was
not a gift enterprise because a gift enterprise contemplates a scheme in which publishers or sellers
give presents as inducements to members of the public to part with their money. (Emphasis
supplied.)

The more recent case of Garden City Chamber of Commerce vs. Wagnet  22 laid down the test in more
definitive terms, as follows:

The examination of authorities made in the present case induces the belief that the consideration
requisite to a lottery is a contribution in kind to the fund or property to be distributed. (Emphasis
supplied)

The test indicated in the foregoing rulings simply means that unless the participants pay money or its
equivalent into a fund which pays for the prizes, there is no lottery. Stated differently, there is consideration
or price paid if it appears that the prizes offered, by whatever name they may be called, came out of the fund
raised by the sale of chances among the participants in order to win the prizes. Conversely, if the prizes do
not come out of the fund or contributions by the participants, no consideration has been paid, and
consequently there is no lottery.

In the instant case, as stated by the lower court, the prizes offered by the appellee were to be taken from his
share in the agent's prize 23 , which was 10% of the amount of the prize won by each ticket sold. 24 Therefore,
since none of the prizes (awards and bonuses) offered in appellee's plan were to come directly from the
aggregate price of the sweepstakes tickets sold by appellee, as a part thereof, no consideration exists for
the chance to win said prizes, there being no "contribution in kind to the fund or property to be distributed."

Appellant, however, urges that the patronage of "Manuel Uy" tickets constitutes a consideration because
from the increased sales, appellee would derive benefits in the form of "returns on his quite substantial
investment." This suggestion is without merit. The question of consideration is not to be determined from the
standpoint of the appellee, or the proponent of the scheme, but rather from that of the sub-agents and the
ticket buyers. Said this Court in Caltex (Phil.) case, supra, on this point:

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 received 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, 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. v. Morgan, Tex. Civ App., 98 S.W. 2d., 844. (54
C.J.S., p. 849).

Equally enlightening in this connection is the following dissertation of the court in the case of State vs.
Hundling: 25

The question is not whether the donor of the prize makes a profit in some remote and indirect way,
but, rather, whether those who have a chance at the prize pay anything of value for that chance.
Every scheme of advertising, including the giving away of premiums and prizes, naturally has for its
objects, not purely a philanthropic purpose, but increased business. Even the corner grocer who
gives candy to the children of the neighborhood may be prompted by that motive, but that does not
make the gift unlawful. And if the grocery instead of giving candy to all the children, gives it only to
some as determined by lot, that circumstance does not make the gift made unlawful by the further
circumstance that the business of the grocer in the neighborhood may be thereby increased. Profit
accruing remotely and indirectly to the person who gives the prize is not a substitute for the
requirement that he who has the chance to win the prize must pay a valuable consideration therefor,
in order to make the scheme a lottery. (Emphasis supplied.)

Based on the foregoing rulings, therefore, it is clear that there is no consideration or price for the chance to
win any of the prizes offered by the appellee in his "Grand Christmas Bonus Award" plan. There being no
consideration, there is no lottery. 26

Even in the light of the mischief or evil sought to be redressed by the Postal Law, or the ratio legis, the
appellee's scheme cannot be condemned as a lottery. It is merely a scheme set up to promote the sale of
tickets for the Grand Christmas Sweepstakes Draw held on December 15, 1963. Should any question be
raised it would be: whether or not sweepstakes draws cultivate or stimulate the gambling spirit among the
people. It should be so, because it cannot be doubted that sweepstakes tickets purchasers are induced to
buy said tickets because of the desire to win any of the substantial prizes offered by the PCSO. This
question, however, is at once rendered moot and academic because sweepstakes draws are authorized by
law.

But appellant presents as an alternative argument the contention that even if assuming that "the element of
consideration is lacking the scheme is still a gift enterprise which is also prohibited by the Postal Law." And
in support of this contention or proposition, appellant relies solely on Opinion No. 217, series of 1953 of the
Secretary of Justice, which, according to the appellant, "ruled that the elements of gift enterprise, as
distinguished from the lottery, are only chance and prize."

In the Caltex (Phil.) case, supra, this Court, rejecting a similar contention of the appellant, emphatically held:

[W]e note that in the Postal Law the term in question (gift enterprise) is used in association with the
word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal
hermeneutics noscitu a sociis — which Opinion 217 aforesaid also relied upon although only in so
far as the clement of chance is concerned — it is only logical that 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.

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)

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
enterprise and similar schemps therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration....

Considered in the light of the foregoing elucidations the conclusion is irresistible that since in the instant
case the element of consideration is lacking, the plan or scheme in question is also not a "gift enterprise" or
a "similar scheme" proscribed by the Postal Law.

Not being a lottery, gift enterprise or similar scheme, appellee's "Grand Christmas Bonus Award" plan can
be considered a scheme for the gratuitous distribution of personal property by chance which the Postal Law
does not condemn. Thus, in labelling said scheme as a lottery or gift enterprise when it is not, appellant not
only committed a palpable error of law but also exceeded his statutory authority in issuing the fraud order in
question. The power of the appellant to issue a fraud order under the Postal Law is dependent upon the
existence of a lottery, gift enterprise or similar scheme.

Accordingly, the lower court did not err in declaring the fraud order in question contrary to law and in
substituting its judgement for that of the appellant. The lower court did not also err in issuing the writ of
injunction, the remedy adequate, speedy and appropriate under the circumstances. lawphi1.nêt

... The Postmaster General's order being the result of a mistaken view of the law, could not operate
as a defense to his action on the part of the defendant, though it might justify his obedience thereto
until some action of the court. In such a case as the one before us there is no adequate remedy at
law, the injunction to prohibit the further withholding of the mail from complaint being the only
remedy at all adequate to the full relief to which the complainants are entitled.... 27

WHEREFORE, the decision appealed from should be, as it is hereby, affirmed. No pronouncement as to
costs. It is so ordered.