Here’s the digest of the case:

FACTS:
Mendezona & Co. (plaintiff-appellee), a commission agent, had a verbal contract with Mariano Moreno (defendant-appellant) to sell coprax and hemp shipped by Moreno from Daet, Ambos Camarines. For several years, Mendezona sold Moreno’s goods, also sold various merchandise to Moreno, and sent periodic payments. When Mendezona went into liquidation, it sued Moreno in the Court of First Instance of Manila on February 11, 1905, to recover a balance of P28,819.53.

Moreno alleged damages and unauthorized charges, claiming Mendezona: (1) pledged portions of the hemp for its own benefit, preventing sales at the best advantage; (2) made excessive charges for storage, insurance, interest, repacking, and shrinkage; and (3) had weight discrepancies in the hemp upon arrival in Manila. Moreno specifically argued that Mendezona had no right to charge interest on balances due from time to time under a verbal contract, citing Articles 312 and 313 of the Code of Commerce and Article 1109 of the Civil Code. While Moreno attempted to prove some claims, he presented no evidence of actual injury from the alleged pledging, insufficient proof for excessive charges, or substantiation for weight discrepancies. He also abandoned his counterclaim. Mendezona provided accounts showing P10,665.29 in interest charges.

ISSUE:
1. Were the defendant’s claims of damages and unauthorized charges sufficiently proven?
2. Was the plaintiff entitled to charge interest on periodic balances due under a verbal commission contract prior to a judicial demand?

RULING:
1. No. The Supreme Court found that the defendant failed to present sufficient evidence to prove any actual damage resulting from the alleged pledging of hemp, or to substantiate claims of excessive storage, insurance, repacking, shrinkage, or weight discrepancies.
2. No. The Court ruled that under a verbal contract for commission agency, and pursuant to Articles 312 and 313 of the Code of Commerce and Article 1109 of the Civil Code, the plaintiff was not legally entitled to charge interest on balances due from time to time until a judicial demand for payment had been made.

Therefore, the interest amounting to P10,665.29, which the plaintiff had charged the defendant, was deducted from the original claimed amount of P28,819.53. The lower court’s decision was affirmed with modifications, ordering Mariano Moreno to pay Mendezona & Co. the sum of P18,154.24, with interest at 6% per annum from February 11, 1905 (the date of the judicial demand), plus costs.