This petition for review assails the decision1 [Rollo, pp. 19-24.] of the Court of Appeals promulgated on November 29, 1994, which dismissed the petition for annulment of the judgment rendered on April 5, 1989, by the Regional Trial Court, Branch 58, of Makati in Civil Case No. 5262.2 [CA Rollo, p. 9.] The motion to reconsider the decision of the Court of Appeals was denied by said Court in a Resolution promulgated on January 11, 1995.3 [Supra, note 1 at 25.] Jjä sc

The antecedent facts of this case as found by the Court of Appeals are as follows:

Petitioners, thus, filed with the Court of Appeals a Petition for Annulment of Judgment, Writ of Execution, and/or Levy on Execution with Preliminary Injunction and Restraining Order to annul or enjoin enforcement of the judgment dated April 5, 1989 of the Makati Court in Civil Case No. 5262. In its decision promulgated on November 29, 1994, the Court of Appeals resolved to deny the petition, hence petitioners’ present recourse to this Court. They assign the following errors:

"I

II

III

In our view, the main issue for resolution now is whether the respondent appellate court erred and gravely abused its discretion in denying petitioners’ action for annulment of judgment of the RTC of Makati, Branch 58, concerning the deceased defendant Elias Lorilla. Pertinently, we have to consider whether Section 21 of Rule 3 and Sections 5 and 7of Rule 86 of the Revised Rules of Court are applicable in the present case. Similarly, we have to inquire whether petitioners, heirs of Elias Lorilla, were deprived of their right to due process of law.

Petitioners argue that the cause of action of private respondent Commercial Credit Corp. (now known as Pentacapital Finance Corp. and hereinafter referred to as PENTACAPITAL) did not survive for being in violation of Section 21 of Rule 3 of the Revised Rules of Court. They claim that under this rule, the trial court lost jurisdiction over the person of Elias Lorilla when he died, and consequently the action against him should have been dismissed.

Section 21 of Rule 3 states:

Section 21 of Rule 3 provides that upon the defendant’s death, the action "shall be dismissed to be presented in the manner especially provided in these rules." Petitioners argue that this manner is provided for in Sections 5 and 7 of Rule 86 of the Revised Rules of Court.6 [Id. at 14-15 (Emphasis ours.)] As contemplated in Section 21 of Rule 3, the action has to be dismissed without prejudice to the plaintiff thereafter presenting his claim as a money claim in the settlement of the estate of the deceased defendant.7 [F. Regalado, REMEDIAL LAW COMPENDIUM, Vol. I, pp. 66-67 (5th ed. 1988)] The claim becomes a mere incident in the testamentary or intestate proceedings of the deceased where the whole matter may be fully terminated jointly with the settlement and distribution of the estate.8 [R. Martin, RULES OF COURT OF THE PHILIPPINES WITH NOTES AND COMMENTS, Vol. I, pp. 232-233 (1989 ed.), citing Pabido vs. Jaranilla and Hidalgo Cuyugan & Co., 60 Phil. 247 (1934)] Supremeä

In the present case, however, the records do not show if any notice of death was filed by Atty. Alfredo Concepcion, counsel of record of Elias Lorilla in Civil Case No. 5262 before the Makati Court. Thus, neither the Makati Court nor PENTACAPITAL were made aware of the death of Elias Lorilla. The trial court could not be expected to know or take judicial notice of the death of Lorilla, absent such notice. Neither could the petitioners have been made aware of the trial court’s judgment adverse to their father, for all notices and orders of the court were sent to Lorilla’s counsel of record, who did not bother to inform the parties concerned of Elias Lorilla’s death. Apparently, Lorilla’s counsel failed in his duty to promptly inform the court of the death of his client, as the Rules require.9 [Section 16, Rule 3, Revised Rules of Court provides: "Duty of attorney upon death, incapacity, or incompetency of party. – Whenever a party to a pending case dies, becomes incapacitated or incompetent, it shall be the duty of his attorney to inform the court promptly of such death, incapacity or incompetency, and to give the name and residence of his executor, administrator, guardian or other legal representative"; Cordova vs. Tornilla, 246 SCRA 430, 432 (1995)]

As far as the Makati Court was concerned, until the Writ of Execution was issued and the levy thereof on August 5, 1993, Lorilla continued to be represented by counsel of record, Atty. Concepcion; and that upon service of a copy of the decision on said counsel at the latter’s address, Lorilla was deemed to have been validly served notice of the judgment.10 [Section 2, Rule 13, Revised Rules of Court provides: "Papers to be filed and served. - … If any of such parties has appeared by an attorney or attorneys, service upon him shall be made upon his attorneys or one of them, unless service upon the party himself is ordered by the court…"] The failure of Atty. Concepcion to serve notice on the court and the adverse parties regarding his client’s death binds herein petitioners as much as the client himself could be so bound. Jurisprudence teems with pronouncements that a client is bound by the conduct, negligence and mistakes of his counsel.11 [Bernardo vs. Court of Appeals, 275 SCRA 413, 428 (1997); Casolita, Sr. vs. Court of Appeals, 275 SCRA 257, 264-265 (1997); Salonga vs. Court of Appeals, 269 SCRA 534, 545 (1997); People vs. Salido 258 SCRA 291, 295 (1996); B.R. Sebastian Enterprises, Inc. vs. Court of Appeals 206 SCRA 28, 39 (1992); Manila Electric Co. vs. Court of Appeals, 187 SCRA 200, 208 (1990)]

In this case, petitioners claim that their right to due process was violated when the Court of Appeals did not annul the decision of the Makati Court dated April 5, 1989. They claim that as heirs of Elias Lorilla, they would be deprived of their lawful inheritance without due process, as they were not parties to the case where the adverse decision against their father was rendered. Said judgment, they posit, cannot be enforced against them because the court had not acquired jurisdiction over them, nor over the estate of Elias Lorilla.

True, a judgment may be annulled for want of jurisdiction or lack of due process of law.12 [Salonga vs. Court of Appeals, 269 SCRA 534, 542 (1997)] But while petitioners were not properly substituted for Elias Lorilla as defendants, absent any notice of his death, it could not be said that petitioners were deprived of due process of law, for as far as the trial court was concerned, they were not parties to the case. To rule otherwise would be, in fact, a more obvious and grievous transgression of due process.

Moreover in this case, we find that the property which petitioners claim as their lawful inheritance, was no longer part of the estate of Elias Lorilla at the time of his death. For Elias Lorilla had earlier executed a dacion en pago over this property in favor of the Joint Resources Management Development Corporation (JRMDC). By reason thereof, Lorilla’s transfer certificate of title was cancelled, and a new one was issued in favor of JRMDC.13 [Rollo, p. 20; CA Rollo, p. 107, back page.] The levy of PENTACAPITAL annotated on Lorilla’s certificate of title was carried over onto the title of JRMDC. Elias Lorilla’s payment of his obligation to JRMDC being one of dation in payment, it is governed by the law on sales.14 [Article 1245, New Civil Code.] The subject property was validly transferred to JRMDC already. Hence petitioners could not claim that they were deprived of their lawful inheritance without due process of law. Courtä

Section 21 of Rule 3 of the Revised Rules of Court sets out the procedure that should be followed after the death of the defendant in a case. If he died "before final judgment in the Court of First Instance," the action should be dismissed without prejudice to the plaintiff presenting his claim in the settlement of the estate of the deceased in accordance with and as required by Section 5 of Rule 86 of the Revised Rules of Court.15 [F. Regalado, REMEDIAL LAW COMPENDIUM, Vol. I, pp. 99-100 (6th ed. 1997); Section 5 of Rule 86 ("CLAIMS AGAINST ESTATE") provides: "Claims which must be filed under the notice. If not filed, barred; exceptions. – All claims for money against the decedent arising from contract, express or implied, whether the same be due, not due or contingent, all claims for funeral expenses and expenses for the last sickness of the decedent, and judgment for money against the decedent, must be filed within the time limited in the notice; otherwise they are barred forever, except that they may be set forth as counterclaims in any action that the executor or administrator may bring against the claimants…"] Here, however, the property in question had already been taken out of the estate of Elias Lorilla, even before judgment in Civil Case No. 5262 was rendered, and it was transferred to JRMDC by virtue of the dacion en pago executed by Elias Lorilla. For this reason, Section 5 of Rule 86 loses its pertinence to the case at bar.

Likewise, Section 7 of Rule 39 of the Revised Rules of Court16 [Section 7 of Rule 39 provides: "Execution in case of death of party. – Where a party dies after the entry of the judgment or order, execution thereon may issue, or one already issued may be enforced in the following cases…" (Emphasis ours)] will not apply to the present case. For it speaks of a situation where a party dies after the entry of the judgment or order of the court. It does not cover a situation where the court was reportedly informed of the death of a party only after final judgment.

Since there was no timely appeal taken from the judgment of the Regional Trial Court of Makati dated April 5, 1989, in Civil Case No. 5262, that judgment had properly become final and executory. As well said by respondent appellate court, to adopt a view contrary would "…open the floodgates to protracted and endless litigations, because all that counsel for defendant has to do, in an action for recovery of money, in case said defendant dies before final judgment in a regional trial court, is to conceal such death from the court and thereafter pretend to go through the motions of trial, and, after judgment is rendered against his client, to question such judgment for being violative of Section 21, Rule 3 of the Rules of Court. Thus, counsel for such defendant could unduly delay the rendering of a judgment against his client. It is a fundamental concept in any jural system, that even at the risk of occasional errors, judgments of courts should become final at some definite time fixed by law. Interest rei publicae ut finis sit litim."17 [Rollo, p. 23; Vda. De Kilayko vs. Judge Tengco, 207 SCRA 600, 612 (1992); Allied Banking Corporation vs. Court of Appeals, 229 SCRA 252, 258 (1994)]

We see no reason, in the interest of justice, to disturb, much less annul, the aforesaid judgment.

WHEREFORE, the assailed decision of the Court of Appeals promulgated on November 29, 1994 and its Resolution promulgated on January 11, 1995 are hereby AFFIRMED. Costs against petitioners.

SO ORDERED. Jä lexj

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.