Quintos vs. Beck

In a contract of commodatum, the bailee's obligation to return the thing upon the bailor's demand requires delivery of the entire thing to the bailor; mere placement at the bailor's disposal while retaining portions for the bailee's own use constitutes breach, and the bailee must bear all expenses occasioned by his unauthorized deposit and the costs of litigation.

Margarita Quintos was the owner-lessor of a house at 1175 M. H. del Pilar Street, Manila, and Beck was her tenant. Upon the novation of their lease contract on January 14, 1936, Quintos gratuitously granted Beck the use of certain furniture described in the stipulation of facts, subject to the condition that Beck would return the furniture upon Quintos's demand. The governing civil law framework was the old Civil Code, particularly articles 1740, paragraph 1, and 1741 on commodatum, and article 1169 on obligations.

Margarita Quintos owned a house at 1175 M. H. del Pilar Street, Manila, where Beck resided as her tenant. On January 14, 1936, upon the novation of the lease contract between them, Quintos gratuitously granted Beck the use of certain furniture described in the third paragraph of the stipulation of facts, subject to the condition that Beck would return the furniture to Quintos upon her demand. The contract expressly provided for this obligation in clause 7 of Exhibit A.

Quintos thereafter sold the property to Maria Lopez and Rosario Lopez. On September 14, 1936, Quintos and the Lopezes notified Beck of the conveyance and gave him sixty days to vacate the premises under one of the clauses of the lease contract. Quintos then demanded that Beck return all the furniture in the house where they were found. On November 5, 1936, Beck, through another person, wrote to Quintos reiterating that she may call for the furniture on the ground floor of the house. Two days later, on November 7, Beck wrote another letter informing Quintos that he could not give up the three gas heaters and the four electric lamps because he would use them until November 15, when the lease was due to expire. Quintos refused to get the furniture because Beck had declined to make delivery of all of them.

On November 15, before vacating the house, Beck deposited all the furniture belonging to Quintos with the Sheriff of Manila, where they were held in a warehouse at 1521 Rizal Avenue. The trial court found that the defendant had placed the furniture at the plaintiff's disposal on November 5, and held that the plaintiff violated the contract by not calling for all the furniture on that date. It ordered the defendant to return the three gas heaters and four electric lamps found in the Sheriff's possession, directed the plaintiff to collect the remaining furniture from the Sheriff at her own expense, and split the Sheriff's deposit fees pro rata between the parties, without pronouncement as to costs.

• Non-compliance by Defendant: Plaintiffs contended that the trial court erred in holding that they violated the contract by not calling for all the furniture on November 5, 1936, when the defendant placed them at their disposal, arguing that the defendant's retention of the gas heaters and electric lamps meant the offer was not a complete tender of return.
• Value of Furniture: Plaintiffs argued that the trial court erred in not ordering the defendant to pay them the value of the furniture in case the furniture is not delivered.
• Expenses of Retrieval: Plaintiffs contended that the trial court erred in holding that they should get all the furniture from the Sheriff at their own expense.
• Deposit Fees: Plaintiffs argued that the trial court erred in ordering them to pay half of the expenses claimed by the Sheriff for the deposit of the furniture.
• Costs: Plaintiffs contended that the trial court erred in ruling that both parties should pay their respective legal expenses or costs, and in denying their motions for reconsideration and new trial.

• Compliance with Obligation to Return: Whether the defendant complied with his obligation to return the furniture upon the plaintiff's demand by merely placing the furniture at the plaintiff's disposal while retaining three gas heaters and four electric lamps for his own use.
• Deposit Expenses: Whether the plaintiff is bound to bear the expenses occasioned by the defendant's deposit of the furniture with the Sheriff.
• Costs of Litigation: Whether the plaintiff is entitled to the costs of litigation.

• Compliance with Obligation to Return: No. The defendant did not comply with his obligation to return the furniture when he merely placed them at the disposal of the plaintiff while retaining the three gas heaters and four electric lamps; the obligation to return means delivery of all the furniture to the plaintiff at her residence.
• Deposit Expenses: No. The plaintiff is not bound to bear the deposit expenses, as the defendant as bailee was not entitled to place the furniture on deposit with the Sheriff, and the plaintiff was under no duty to accept a partial offer of return.
• Costs of Litigation: Yes. The plaintiff is entitled to costs in both instances, as the prevailing party, because the defendant breached the contract of commodatum without justification.

• Compliance with Obligation to Return: The contract between the parties was one of commodatum, because under it the plaintiff gratuitously granted the use of the furniture to the defendant while reserving ownership. Under articles 1740, paragraph 1, and 1741 of the Civil Code, and clause 7 of the contract (Exhibit A), the defendant bound himself to return the furniture to the plaintiff upon her demand. This obligation means he should return all of the furniture to the plaintiff at her residence or house. The defendant did not comply when he merely placed the furniture at the plaintiff's disposal while retaining the three gas heaters and four electric lamps for his own benefit. The provisions of article 1169 of the Civil Code cited by counsel were not squarely applicable. The trial court therefore erred in concluding that the plaintiff failed to comply with her obligation to get the furniture when they were offered to her.

• Deposit Expenses: Because the defendant had voluntarily undertaken to return all the furniture to the plaintiff upon her demand, the Court could not legally compel the plaintiff to bear the expenses occasioned by the deposit of the furniture at the defendant's behest. As bailee, the defendant was not entitled to place the furniture on deposit with the Sheriff; nor was the plaintiff under a duty to accept the offer to return the furniture, because the defendant wanted to retain the three gas heaters and four electric lamps. All expenses occasioned by the delivery to and deposit of the furniture with the Sheriff were properly chargeable to the defendant.

• Costs of Litigation: The costs in both instances should be borne by the defendant because the plaintiff is the prevailing party under section 487 of the Code of Civil Procedure. The defendant was the one who breached the contract of commodatum, and without any reason refused to return and deliver all the furniture upon the plaintiff's demand. It was just and equitable that he pay the legal expenses and other judicial costs which the plaintiff would not have otherwise defrayed.

• Commodatum (Old Civil Code, Articles 1740 and 1741) — A contract of commodatum is one in which the bailor gratuitously grants the use of a thing to the bailee, reserving ownership. The bailee is bound to return the thing to the bailor upon the latter's demand. In this case, the Court applied these provisions to hold that the defendant's obligation was to return all the furniture to the plaintiff's residence, and that his partial tender—retaining certain items for his own use—did not constitute compliance.

• Bailee's Obligation to Return — The obligation to return in commodatum requires delivery of the entire thing to the bailor at the latter's residence; mere placement at the bailor's disposal while retaining portions for the bailee's benefit constitutes breach. The bailee may not unilaterally deposit the thing with a third party and shift the resulting expenses to the bailor, nor may the bailor be compelled to accept a partial delivery.

• Prevailing Party Entitled to Costs — Under section 487 of the Code of Civil Procedure, the prevailing party is entitled to costs. Where the defendant breached the contract without justification, it is just and equitable that he bear all legal expenses and judicial costs.

• "The obligation voluntarily assumed by the defendant to return the furniture upon the plaintiff's demand, means that he should return all of them to the plaintiff at the latter's residence or house. The defendant did not comply with this obligation when he merely placed them at the disposal of the plaintiff, retaining for his benefit the three gas heaters and the four eletric lamps." — This passage states the ratio decidendi: the bailee's obligation to return in commodatum requires delivery of the entire thing, and partial tender with retention of portions for the bailee's own use is insufficient.

• "As the defendant had voluntarily undertaken to return all the furniture to the plaintiff, upon the latter's demand, the Court could not legally compel her to bear the expenses occasioned by the deposit of the furniture at the defendant's behest." — This establishes that a bailee who breaches his obligation to return may not shift deposit expenses to the bailor.

• Articles 1740, paragraph 1, and 1741, Old Civil Code — Govern the contract of commodatum, under which the bailor gratuitously grants use of a thing while reserving ownership, and the bailee is bound to return the thing upon the bailor's demand. The Court applied these provisions to characterize the parties' arrangement and to define the defendant's obligation to return all furniture.
• Article 1169, Old Civil Code — Cited by counsel for the parties regarding obligations and delay; the Court found this provision not squarely applicable to the facts.
• Section 487, Code of Civil Procedure — Provides that the prevailing party is entitled to costs. The Court applied it to award costs in both instances to the plaintiff, as the defendant was the breaching party.

Avanceña, C.J., Villa-Real, Laurel, Concepcion, and Moran, JJ., concurred.