G.R. No. 178789 - Lim vs. National Power Corp.

On February 8, 1995, the respondent National Power Corporation (NPC) filed an expropriation suit against petitioner Natividad B. Lim before the Regional Trial Court (RTC) of Lingayen, Pangasinan, Branch 37. The suit involved Lots 2373 and 2374 needed for NPC’s Sual Coal-Fired Thermal Power Project.
Since Lim was residing in the United States, the RTC effected service of summons on her on February 20, 1995 through her tenant, Wilfredo Tabongbong.

On March 1, 1995, after notice to Lim and the deposit of the provisional value of the property, the RTC ordered the issuance of a writ of possession in favor of NPC, which would allow the removal of Lim from the land.
On April 24, 1995, Lim, represented by her husband Delfin, filed an omnibus motion to dismiss the action and to suspend the writ of possession.

The motion questioned the RTC’s jurisdiction over Lim’s person.
It also challenged the sufficiency of the complaint by alleging that it did not state a cause of action.

On December 6, 1996, respondent spouses Roberto and Arabela Arcinue filed a motion for leave to admit a complaint in intervention, alleging that they owned and were in possession of Lot 2374, one of the lots subject to expropriation.
On January 7, 1997, the RTC granted the Arcinue spouses’ motion and ordered both NPC and Lim to file their answers to the complaint-in-intervention within ten (10) days from receipt of the court’s order.
After a delay of ten months with neither Lim nor NPC filing their respective answers, the Arcinue spouses filed a motion for judgment by default on December 7, 1998.

Lim sought to expunge the Arcinue spouses’ motion for judgment by default on the ground that it lacked the required explanation regarding their use of registered mail rather than personal service.
During the hearing on the motion, Lim’s counsel failed to appear.
The NPC did not answer the motion; its interest was centered solely on the determination of just compensation.
On March 1, 1999, the RTC issued an order of default against both Lim and NPC, noting that the Arcinues’ failure to provide an explanation for using registered mail had been effectively cured by Lim’s counsel’s subsequent admission of having received a copy of the motion ten days before the scheduled hearing.

Lim filed a motion for reconsideration to reverse the default order, which was denied by the RTC.
Thereafter, Lim filed a petition for certiorari before the Court of Appeals (CA).
On March 23, 2007, the CA rendered a decision affirming the RTC’s order of default.
Lim’s subsequent motion for reconsideration before the CA was also denied, prompting her to file the present petition for review.
On September 24, 2007, the Supreme Court initially denied Lim’s petition but later, on a motion for reconsideration, reinstated it for further review.

Whether the Court of Appeals gravely abused its discretion in affirming the RTC’s order of default against petitioner Natividad Lim.

Whether Lim’s failure to file the required answer to the complaint-in-intervention within the period prescribed under Section 4, Rule 19 of the 1997 Rules of Civil Procedure justifies the entry of default.
Whether the lack of an explanation by the Arcinue spouses for resorting to service by registered mail, as opposed to personal service, should result in the expungement of their motion for judgment by default.