Facts:

The case involves the petitioners Eloisa, Carlos Jr., Archimedes, Caroline, and Ma. Carlota Arambulo against the respondents Court of Appeals and Engr. Danilo G. Ferreras, arising from a contractual dispute regarding the construction of a dormitory building. The private respondent, Ferreras, as the contractor, filed a suit against the petitioners, who were the spouses Carlos S. Arambulo and Eloisa I. Arambulo, in the Regional Trial Court of Angeles City, seeking payment for the balance of the contract price and additional costs due to an increase in construction materials. This suit was filed on October 30, 1988, and was assigned Civil Case No. 5301. The defendants initially engaged Atty. Romeo P. Pineda, who filed an Answer with a counterclaim. Over time, Atty. Jose Jimenez Jr. replaced Atty. Pineda under a special power of attorney executed by the Arambulos and represented them fully during pre-trials and hearings.

On January 30, 1991, the trial court issued a decision in fav

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Facts:

Parties and Contractual Relationship

• Petitioners – Spouses Carlos S. Arambulo and Eloisa I. Arambulo – and a private respondent (Engr. Danilo G. Ferreras) were parties to a contract for the construction of a four‐storey dormitory building.
• The contract involved the petitioners engaging the services of the private respondent (the contractor) for the construction project, with corresponding obligations regarding payment and performance.

Trial Court Proceedings and Judgment

• The private respondent filed an action in Branch LXI of the Regional Trial Court at Angeles City (Civil Case No. 5301) seeking payment of the balance of the contract price, additional costs due to expanded scope, and increased expenses on materials.
• Defendants (the petitioners) filed an Answer with a counterclaim through their counsel, initially represented by Atty. Romeo P. Pineda.
• During pre-trial and trial hearings, Atty. Jose Jimenez, Jr. actively represented the petitioners by signing pleadings, handling the case, and conducting examinations.
• On 30 January 1991, the trial court issued a judgment in favor of the private respondent, ordering the petitioners to pay the balance of the contract price, an additional portion for increased material costs, and the court costs, while dismissing the petitioners’ counterclaim.

Notice of Appeal and Counsel Change

• On 7 February 1991, the petitioners, through Atty. Jimenez, filed their notice of appeal against the trial court’s decision.
• On 12 February 1991, Atty. Jimenez filed a Withdrawal of Appearance with the express consent of the petitioners, after which Atty. Romeo P. Pineda formally appeared as their new counsel by filing the appropriate documents with the court.
• Although both the withdrawal and the new appearance were recorded in the official records, subsequent communications about the appeal were not duly served to the newly designated counsel, Atty. Pineda.

Docket Fee Notice and Error in Service

• On 19 June 1991, the Court of Appeals required payment of the docket fee (P400.00 plus an additional P20.00) by sending a notice to Atty. Jimenez.
• Atty. Jimenez, having already been withdrawn as counsel, received the notice on 9 July 1991, while no such notice was ever sent to Atty. Pineda, the actual and current counsel of record.
• As a result of non-compliance with the notice (since it was erroneously sent to the wrong counsel), the court considered the appeal “abandoned and dismissed” in its Resolution of 11 November 1991, pursuant to Section 1(d), Rule 50 of the Rules of Court.

Post-Judgment Developments and Motion for Reconsideration

• Following the dismissal, respondents (the private party) filed a motion urging the entry of final judgment and remand of the case for execution.
• An entry of judgment was made on 22 January 1992 declaring the Resolution of dismissal final and executory, and the records were remanded back to the trial court on 12 February 1992.
• The petitioners, through Atty. Pineda, later filed a Motion for Reconsideration, Reinstatement of Appeal, and Acceptance of Docket Fee on 12 March 1992, along with the corresponding payment; however, the Court of Appeals denied their motion in its Resolution of 8 June 1992.

Allegations and Legal Contentions by the Petitioners

• The petitioners contended that the dismissal was tainted by a grave abuse of discretion because the notice to pay the docket fee was improperly served to Atty. Jimenez—who had already withdrawn with their consent—instead of to their new counsel, Atty. Pineda.
• They argued that the defective service of notices deprived them of due process.
• The petitioners also claimed that there was no fair opportunity to comply with the procedural requirements, given that the critical notice was not received by the appropriate counsel.

Contentions by the Private Respondent

• The private respondent argued that Atty. Pineda had never formally withdrawn from the case and that the actions of both counsels indicated a collaborative effort that continued to represent the petitioners.
• It was further contended that the withdrawal of Atty. Jimenez did not diminish the validity of his prior appearance and that the re-entry of Atty. Pineda did not absolve the petitioners from their obligation, thus justifying the dismissal on the basis of procedural default.

Contextual and Factual Considerations

• The case occurred during a period of disarray partly due to the eruption of Mt. Pinatubo, which the petitioners referenced as a mitigating factor for delayed communication.
• The detailed records, including the Summary Index and original pleadings, reaffirmed the sequence of appearance, withdrawals, and subsequent misdirected notices which are central to the dispute.

Issue:

• Whether the dismissal of the petitioners’ appeal by the Court of Appeals constituted a grave abuse of discretion due to the defective service of the notice to pay the docket fee—sent to a withdrawn counsel, Atty. Jimenez, instead of to the new counsel, Atty. Pineda.
• Whether the erroneous service of notice deprived the petitioners of due process in their appeal.
• Whether counsel’s negligence (failure of Atty. Pineda to verify the status of the notice) binds the petitioners and justifies the dismissal of the appeal.
• To what extent the withdrawal of Atty. Jimenez and the subsequent appearance of Atty. Pineda affected the proper transmission of notices and obligations to pay the docket fee.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)