ORBIT TRANSPORTATION COMPANY, PETITIONER, VS. WORKMEN’S COMPENSATION COMMISSION AND MELECIO CRESPO IN BEHALF OF MINOR ROSALINE CRESPO, RESPONDENTS.

Orbit Transportation versus Workmen's Compensation Commission

The Case

This is a petition filed with the Supreme Court by Orbit Transportation Company against the Workmen's Compensation Commission and against Melecio Crespo, acting on behalf of the minor Rosaline Crespo. The company sought review of the Commission's decision and resolution ordering it to pay compensation and burial expenses to the claimant, who was the dependent grandchild of a deceased driver. The case matters far less for the compensation award itself than for what the Court did about the petition: it found that counsel had suppressed material facts and used the occasion to remind the entire bar of the lawyer's duty of candor to the courts. It is, in other words, a case about the ethics of appellate advocacy as much as about the Workmen's Compensation Law.

Procedural History

The Workmen's Compensation Commission rendered a decision directing the petitioner to pay the claimant the principal sum of 4,360 pesos as compensation and burial expenses, and it later issued a resolution on the same matter. From that decision and resolution, the company filed a petition for review with the Supreme Court within the original ten-day reglementary period. In its petition, counsel presented a summary statement of the matters involved and of the questions of law, framing the whole controversy as one of law: whether the payment of 5,000 pesos in cash, evidenced by a settlement and release of claim, constituted full and complete compensation for the death of Ramon Crespo. Upon examining the petition and verifying the ratio decidendi of the Commission's decision, the Court found that material facts bearing on the petition's lack of merit had been suppressed. It denied the petition for lack of merit in its resolution of June 28, 1974, and at the same time required counsel to show cause why they should not be disciplinarily dealt with. Counsel filed an explanation and apology on July 11, 1974, pleading haste and time pressure and begging forgiveness. The Court then resolved the matter of discipline.

Facts

Ramon Crespo was a driver employed by Orbit Transportation Company. He died, and a claim for compensation was filed on behalf of his minor grandchild, Rosaline Crespo, through Melecio Crespo. The claim proceeded before the Workmen's Compensation Commission and was not controverted by the employer.

What the company later relied upon was a settlement and release of claim, marked as Exhibit 1, showing that it had paid 5,000 pesos in cash. Its counsel insisted before the Supreme Court that this voluntary payment was full and complete compensation for the death of Ramon Crespo, and that the entire case hinged on that question of law.

But the Commission's decision, which the petition sought to appeal, contained findings that told a different story. The 5,000 pesos was not compensation at all; it was the proceeds of insurance procured by the deceased himself, with premiums paid out of his daily income. And the claim, the Commission found, was uncontroverted. These findings were never disclosed in the petition's statement of the case and of the questions of law. Instead, the petition was silent about them, and a copy of the Commission's decision was simply attached as an annex.

Issues

• Whether or not counsel for the petitioner suppressed material facts from their statement of the case and of the questions of law involved in the petition, with the apparent intent of misleading the Court as to the merits of the petition.
• Whether or not the attachment of the Commission's decision as an annex to the petition excused counsel from pleading the material facts found in that decision.
• Whether or not counsel should be disciplinarily dealt with for the suppression.

Applicable Provisions

Rule 7, section 5 of the Rules of Court, on the signature of an attorney, provides:

The signature of an attorney constitutes a certificate by him that he has read the pleading and that to the best of his knowledge, information and belief, there is good ground to support it; and that it is not interposed for delay.

This is the source of the lawyer's certification of good ground, which the Court invoked as the standard counsel violated by presenting a misleading statement of the case.

Rule 43, section 2, on the contents of a petition for review, provides:

The petition shall contain a concise statement of the issues involved and the grounds relied on for the petition.

The Court cited this to show that the questions raised must be distinctly set forth in the petition itself, not left to be inferred from an annex.

Rule 8, section 1, the fundamental rule on pleadings, provides:

Every pleading shall contain in a methodical and logical form, a plain, concise and direct statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be, omitting the statement of mere evidentiary facts.

This fixes the pleader's duty to state the ultimate facts, which counsel failed to do.

Ruling

On the first issue, the Court found that material facts had indeed been suppressed. The Commission's decision expressly found that the 5,000 pesos claimed as compensation was the proceeds of insurance procured by the deceased with premiums paid from his daily income, and that the claim was uncontroverted. The petition was silent on both points, and the Court concluded that this was done with the apparent intent of misleading it as to the merits. The petition was accordingly denied for lack of merit.

On the second issue, the Court rejected the excuse that a copy of the decision was attached to the petition. It invoked the longstanding doctrine of Cañete versus Wislizenus: exhibits or annexes attached to a complaint or petition do not take the place of allegations of the ultimate facts constituting the cause of action, which the pleader must state concisely and specifically as if his pleading had no annexes, under pain of peremptory dismissal. The Court explained the rationale in the words of Justice Moreland:

A court is not obliged, in order to know what the plaintiff's cause of action is, to search through a list of exhibits, more or less lengthy, and select what the court presumes the pleader intended to allege.

By the same token, the Court held that material facts established in annexes which disprove or are contrary to the pleader's own allegations must not be suppressed, but must be specifically averred so that the Court may have a full and complete picture of the questions raised.

On the third issue, the Court was disposed, under the circumstances, to be lenient. It reminded counsel that time pressure provides no justification for the suppression of material and vital facts bearing on the merit or lack of merit of a petition, and that members of the bar owe fidelity to the courts as well as to their clients. It also stressed that attorneys play a major role in advising clients to refrain from seeking further appellate review in plainly untenable cases, so that court dockets are not needlessly clogged with unmeritorious cases.

Doctrine

First, a lawyer's signature on a pleading is a certificate that, to the best of his knowledge, information and belief, there is good ground to support it, and a willful violation exposes him to disciplinary action. Second, the pleader must state the ultimate facts in the pleading itself; annexes do not take the place of allegations, and the court is not obliged to search through exhibits to discover the cause of action. Third, and by the same token, material facts found in the annexes which contradict the pleader's allegations must be specifically averred, not suppressed, so that the court sees the full picture. Fourth, time pressure is no excuse for suppressing material and vital facts, because counsel owe fidelity to the courts as well as to their clients.

Disposition

The Court denied the petition for lack of merit and administered a reprimand to Attorneys Sergio D. Vendero and Renerio R. Bartonico, with a warning that a repetition of the same or other violations of their attorney's oath would be severely dealt with, ordering copies of the resolution entered in their personal records and furnished to the Integrated Bar of the Philippines.

Remember This

Memorize the line that annexes never substitute for allegations: a pleader must state the ultimate facts in the pleading itself, and must never suppress facts in his own annexes that defeat his case. Examiners use this case in remedial law and legal ethics, on the contents of pleadings and petitions for review, and on the disciplinary consequences of a lawyer's signature and of suppression of material facts.