VICENTE BARENG, petitioner, vs. THE HONORABLE COURT OF APPEALS, PATROCINIO ALEGRIA and AGUSTIN RUIZ, respondents.
FACTS
Petitioner Vicente Bareng purchased cinematographic equipment from respondent Patrocinio Alegria for P15,000, paying P10,000 down and issuing four promissory notes for the balance. After paying the first note, Bareng was informed by respondent Agustin Ruiz that Ruiz was a co-owner of the equipment and was not agreeable to the sale. Ruiz instructed Bareng to suspend payments to Alegria. Consequently, Bareng refused further payments to Alegria until Alegria settled the dispute with Ruiz. Ruiz then filed a suit (Civil Case No. 1527) against Alegria and Bareng for his share of the price. Alegria and Ruiz reached a compromise wherein Alegria recognized Ruiz’s co-ownership and promised to pay him two-thirds of any amount recovered from Bareng. Alegria subsequently sued Bareng (Civil Case No. 1554) for the unpaid balance. The trial court dismissed Civil Case No. 1554 without prejudice. On appeal, the Court of Appeals reversed the decision and ordered Bareng to pay Alegria P3,600 plus legal interest from the filing of the complaint. Bareng appealed to the Supreme Court, contesting only the imposition of legal interest.
ISSUE
Whether petitioner Vicente Bareng is liable to pay legal interest on the unpaid balance of the purchase price from the date of the filing of the complaint.
RULING
Yes. The Supreme Court affirmed the decision of the Court of Appeals. While Bareng had the right under Article 1590 of the New Civil Code to suspend payment of the balance due to the disturbance caused by Ruiz’s claim of co-ownership, this right ceased when Alegria and Ruiz reached a compromise agreement in Civil Case No. 1527, thereby eliminating the threat to Bareng’s ownership. Bareng, as a party to that case, was aware of the settlement. From the time Alegria filed the complaint for collection, Bareng was in default. He admitted owing P3,600 but neither tendered payment nor deposited the amount in court. His obligation was liquidated, as the price was fixed in the contract, and the mere disagreement over the amount in court did not make it unliquidated. Therefore, under Article 2209 of the Civil Code, he is liable for legal interest from the date of judicial demand (the filing of the complaint).
