National Power Corporation vs. Delta P, Inc.

A party who voluntarily supplies fuel to another without receiving compensation may recover under the doctrine of unjust enrichment, notwithstanding that the supply was gratuitous and constituted a donation, provided the enrichment was without justification and at the expense of the supplier; however, a post-audit of a final judgment does not constitute a supervening event that would except the application of the immutability of judgment doctrine.

Delta P, Inc. assumed operations of a 16MW diesel power plant in Puerto Princesa City previously owned by Paragua Power Corporation (PPC), which maintained a Power Purchase Agreement (PPA) with petitioner National Power Corporation (NAPOCOR). When NAPOCOR refused to redirect payments from PPC to Delta P, the latter ceased operations due to lack of funds, precipitating an imminent power shortage in Palawan. At the request of the local government, NAPOCOR intervened by supplying fuel and paying manpower salaries to keep the plant operational while Delta P resolved its internal financial difficulties.

• Nature of the Dispute: The controversy arose from NAPOCOR's unilateral debit of P24,449,247.36 from Delta P's account, representing alleged fuel costs supplied during a critical period when Delta P operated a 16MW power plant in Puerto Princesa City, Palawan.
• The Fuel Supply Arrangement: In February 2003, facing an imminent power shortage due to Delta P's inability to operate the plant for lack of funds, NAPOCOR Vice-President Lorenzo S. Marcelo sought and obtained approval from NAPOCOR President Rogelio M. Murga to supply fuel and pay manpower services. On March 7, 2003, Marcelo sent a letter to Delta P's Plant Manager stating that NAPOCOR would supply fuel and pay salaries "while Delta P's internal problems were being resolved," without specifying any condition for repayment or indicating the supply was a loan.
• Prior Litigation: On March 12, 2003, Delta P instituted Civil Case No. 3766 for collection of sum of money against NAPOCOR, claiming payment for electricity off-taken from December 2002 to June 2003. On July 15, 2003, the RTC rendered judgment ordering NAPOCOR to pay P87,944,215.67 under the doctrines of accion in rem verso and unjust enrichment, finding that NAPOCOR benefited from Delta P's electricity without payment despite the absence of a contract between them. This judgment became final and executory.
• The Debit Memo: On December 4, 2003, NAPOCOR issued Debit Memo S1-03-12-0041 deducting P24,449,247.36 from Delta P's account for alleged incremental fuel costs from February 25, 2003 to June 25, 2003, claiming variances between actual fuel costs and the fuel costs tariff. Delta P's invoices during this period did not include fuel cost components, as the parties had relied on the reference rate stated in the PPA formula.
• Lower Court Findings: Both the RTC and the CA found that the fuel supply was a gratuitous donation, that the debit was made unilaterally without prior agreement, and that the post-audit could not modify the final judgment in Civil Case No. 3766. The RTC declared the debit void and illegal, ordering NAPOCOR to repay the debited amount with interest and attorney's fees.

• Nature of the Fuel Supply: NAPOCOR maintained that the supply of fuel was not a gratuitous donation, arguing that as a government entity subject to audit, it would not have provided fuel free of charge without clearly manifesting such gratuity; the absence of any annotation indicating the supply was a loan did not negate the expectation of reimbursement.
• Validity of the Debit: NAPOCOR argued that the debit was valid because it substantiated with competent evidence an overpayment resulting from Delta P's erroneous computation excluding market fluctuations and transshipment costs; Delta P allegedly indicated zero amounts for fuel tariffs while incremental costs were actually incurred.
• Supervening Event: NAPOCOR contended that the post-audit constituted a supervening event justifying the debit and modification of the judgment in Civil Case No. 3766, as it revealed variances between allowable and actual fuel costs that were not apparent during the prior litigation.
• Applicable Doctrines: NAPOCOR invoked the principles of unjust enrichment and solutio indebiti, asserting that Delta P was benefited at NAPOCOR's expense and was liable to compensate NAPOCOR for all incremental costs including market fluctuations and transshipment expenses.

• Res Judicata and Immutability: Delta P countered that the payment awarded in Civil Case No. 3766 had become final and executory, rendering it immutable and unalterable; NAPOCOR's arguments were merely rehashes of points already adjudicated.
• Gratuitous Nature of Fuel Supply: Delta P argued that NAPOCOR voluntarily chose to supply fuel to avoid power disruption, and its acceptance did not constitute implied approval to bear costs; the invoices from February to June 2003 did not include fuel costs, indicating no obligation to pay.
• Lack of Prior Agreement: Delta P emphasized that NAPOCOR officers admitted on cross-examination that any post-audit manifestations were communicated only internally and never formally made known to Delta P, highlighting the unilateral nature of the deduction.
• Satisfaction of Judgment: Delta P pointed out that NAPOCOR had already paid the adjudged amount in Civil Case No. 3766 without condition or qualification, and the cause of action in the present case was based on that final judgment, not on the PPA with PPC.

• Gratuitous Donation: Whether NAPOCOR's supply of fuel to Delta P constituted a gratuitous donation.
• Reimbursement Liability: Whether Delta P is liable to reimburse NAPOCOR for the fuel costs supplied.
• Immutability of Judgment: Whether the doctrine of immutability of judgment bars NAPOCOR's claim for reimbursement given the finality of Civil Case No. 3766.
• Supervening Event: Whether the post-audit constitutes a supervening event allowing deviation from the final judgment.

• Gratuitous Nature of the Supply: The fuel supply constituted a donation, defined as an act of liberality under Article 725 of the Civil Code. NAPOCOR's motivation—addressing the power crisis at the local government's request—did not negate the gratuitous nature where no condition for repayment was annexed, no annotation indicated a loan, and no caveat protected NAPOCOR's interests. The act proceeded from NAPOCOR's unrestrained volition without compulsion, satisfying the definition of donation even if motivated by public service concerns.
• Immutability of Judgment: The doctrine of immutability of judgment applies; a final and executory judgment may not be modified by the court that rendered it or even by the Supreme Court. The post-audit does not qualify as a supervening event under the recognized exceptions (clerical errors, nunc pro tunc entries, void judgments, or supervening events rendering execution unjust). A supervening event must alter the parties' situation to render execution inequitable, impossible, or unfair, and must be established by competent evidence concerning facts that transpired after the judgment became final. The post-audit concerned amounts already existing and litigated in Civil Case No. 3766, not new facts developing after finality.
• Unjust Enrichment: Notwithstanding the gratuitous nature of the donation and the immutability of the prior judgment, Delta P was unjustly enriched when it received fuel from NAPOCOR without providing compensation, even after its internal financial issues were resolved. Unjust enrichment exists when a person retains a benefit without valid basis to the loss of another. Here, NAPOCOR suffered an appreciable monetary loss while Delta P received a patrimonial advantage without correlative compensation, satisfying the two conditions for unjust enrichment: benefit without justification and enrichment at another's expense.
• Solutio Indebiti: The principle of solutio indebiti does not apply because NAPOCOR's payment for fuel was not made through mistake but through liberality; the requirements for solutio indebiti—payment made when there is no right to demand it and unduly delivered through mistake—were not met.
• Remand: While NAPOCOR is entitled to recover under unjust enrichment for the fuel supplied from February 25, 2003 to June 25, 2003, it failed to properly substantiate the specific amount of P24,449,247.36 debited. The case is remanded to the trial court to ascertain the exact amount spent by NAPOCOR for the fuel supply during the specified period.

• Donation — An act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it (Article 725, Civil Code). To constitute a donation, the conveyance must proceed freely from the donor's unrestrained volition without compulsion or external mandate; conveyances made in view of a demandable debt cannot be considered valid donations (Article 726, Civil Code). The Court applied this to characterize NAPOCOR's fuel supply as gratuitous despite its public service motivation, given the absence of conditions for repayment.
• Immutability of Judgment — A decision that has acquired finality becomes immutable and unalterable and may no longer be modified in any respect, even to correct erroneous conclusions of fact or law. The doctrine ensures orderly discharge of judicial business and puts an end to judicial controversies. Exceptions include: (1) correction of clerical errors; (2) nunc pro tunc entries causing no prejudice; (3) void judgments; and (4) supervening events rendering execution unjust and inequitable.
• Supervening Events — Circumstances that transpire after a decision's finality rendering execution unjust, impossible, or unfair. To qualify: (i) the event must alter or modify the parties' situation to render execution inequitable, impossible, or unfair; and (ii) must be established by competent evidence. The event must involve facts that transpired after the judgment became final or new circumstances developing after finality, not matters already existing and litigated.
• Unjust Enrichment — Exists when a person unjustly retains a benefit to the loss of another, or retains money or property against the fundamental principles of justice, equity, and good conscience (Article 22, Civil Code). Requirements: (1) a person is benefited without a valid basis or justification, and (2) such benefit is derived at the expense of another. The enrichment may consist of patrimonial, physical, or moral advantages appreciable in money, including enjoyment of a thing belonging to another or benefits from services rendered without intent to donate.
• Solutio Indebiti — Governed by Article 2154 of the Civil Code, applies when something is received when there is no right to demand it and was unduly delivered through mistake. Requirements: (1) payment made when no binding relation exists between the payor (who has no duty to pay) and the recipient, and (2) payment made through mistake, not through liberality or other cause.

• "A donation is, by definition, 'an act of liberality.' Article 725 of the Civil Code provides: Article 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it. To be considered a donation, an act of conveyance must necessarily proceed freely from the donor's own, unrestrained volition." — Cited to define the essential nature of donation and distinguish it from compulsory conveyances.
• "It is axiomatic that when a final judgment is executory, it becomes immutable and unalterable. It may no longer be modified in any respect either by the tribunal which rendered it or even by this Court. The doctrine is founded on considerations of public policy and sound practice that, at the risk of occasional errors, judgments must become final at some definite point in time." — Articulates the rationale behind the immutability of judgment doctrine.
• "A supervening event, to be sufficient to stay or stop the execution, must alter the execution to become inequitable, impossible, or unfair, and cannot rest on unproved or uncertain facts." — Establishes the stringent requirements for invoking supervening events as an exception to finality of judgments.
• "There is unjust enrichment 'when a person unjustly retains a benefit to the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity and good conscience.' The principle of unjust enrichment requires two conditions: (1) that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at the expense of another." — Defines the elements of unjust enrichment under Article 22 of the Civil Code.
• "This case presents one of the rare situations where Delta P is unjustly enriched through the voluntary act of the enriching party, NAPOCOR in this case." — Highlights the unusual factual scenario where enrichment occurs through the voluntary act of the party suffering the loss.

• Gatan v. Vinarao, G.R. No. 205912, October 18, 2017 — Cited for the principle that findings of fact of trial courts regarding credibility of witnesses deserve great weight and are conclusive when affirmed by the CA.
• Bank of the Philippine Islands v. Leobrera, 461 Phil. 461 (2003) — Cited for the rule that findings of fact of the trial court, when affirmed by the CA, are binding upon the Supreme Court unless the findings are contrary to those of the trial court or unsupported by evidence.
• Republic of the Philippines v. Sps. Llamas, 804 Phil. 264 (2017) — Cited for the definition of donation as an act of liberality under Article 725 of the Civil Code.
• FGU Insurance Corp. v. RTC of Makati City, Br. 66, et al., 659 Phil. 117 (2011) — Cited for enumerating the exceptions to the doctrine of immutability of judgment.
• Go v. Echavez, 765 Phil. 410 (2015) — Cited for elaborating on the exceptions to immutability, particularly regarding clerical errors, nunc pro tunc entries, void judgments, and supervening events.
• Abrigo, et al. v. Flores, et al., 711 Phil. 251 (2013) — Cited for the definition and requirements of supervening events as an exception to execution of final judgments.
• Almario v. Philippine Airlines, Inc., 559 Phil. 373 (2007) — Cited for the definition and elements of unjust enrichment under Article 22 of the Civil Code.
• Siga-an v. Villanueva, 596 Phil. 760 (2009) — Cited for the requisites of solutio indebiti under Article 2154 of the Civil Code.

• Article 725, Civil Code — Defines donation as an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it. Applied to characterize the fuel supply as a donation.
• Article 726, Civil Code — Provides that conveyances made in view of a demandable debt cannot be considered valid donations. Applied to distinguish the present case from situations where donation is invalid due to pre-existing debt.
• Article 22, Civil Code — Provides that every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground shall return the same to him. Applied to hold Delta P liable for unjust enrichment.
• Article 2154, Civil Code — Governs solutio indebiti, providing that if something is received when there is no right to demand it and it was unduly delivered through mistake, the obligation to return it arises. Distinguished from unjust enrichment; held inapplicable because NAPOCOR's payment was made through liberality, not mistake.

Peralta (Chairperson), Hernando, and Inting, JJ., concurred. Leonen, J. was on wellness leave.