Joseph Chan, Wilson Chan and Lilu Chan vs.

Bonifacio Maceda
G. R. No. 142591
April 30, 2003
J. Sandoval-Guttierez

Facts:

 That Bonifacio Maceda obtained a 7.3M loan from DBP for the construction of his New Grand Hotel Project
in Tacloban City
 Maceda executed a construction contract with Moreman Builders for the construction of his hotel.
o Maceda bought construction materials and equipments which Moreman deposited in the
warehouse of Wilson and Lily Chan
o The deposit was free of charge
 Moreman failed to finish the construction of the hotel at the stipulated time
 Maceda filed a case for rescission and damages against them
o RTC ruled in favor of Maceda
 While the case is pending, Maceda demanded from Chan the deposited materials
o Chan said that these materials have been withdrawn by Moreman in 1977
 Maceda still filed an action for damages and preliminary attachment against Chan
o It was dismissed after 4years by RTC – for failure to prosecute
o After 5years a motion for reconsideration was filed but was denied by RTC
 RTC ruled for the following:
o Declared Chan in default
o Maceda presented witnesses to show that the construction materials were indeed deposited to the
warehouse – favored Maceda
o Stated that since the materials stored by Moreman builders without any lien or encumbrance, Chan
was duty bound to release it
 CA: affirmed RTC

Issue: W/N there existed a contract of deposit between the parties, NO

Ruling:

In a contract of deposit, the burden of proof proving the contract is on the plaintiff. In the case at bar, there is no
record of any contract of deposit bet the parties. The delivery receipts presented also lack probative value so as to
prove the existence of the contract for they are unsigned and not duly authenticated by Moreman or by Maceda.
Moreover, Maceda also failed to prove that there were construction materials and equipment in petitioner’s
warehouse at the time he made a demand for their return.

The respondent failed to prove the:

 Existence of any contract of deposit between him and petitioner, nor between the petitioner and Moreman in
his favor
 That there were construction materials in petitioner’s warehouse at the time of respondents demand to
return the same, we that the petitioner’s have no corresponding obligation or liability to respondent with
respect to those construction materials

Under Article 1311 of the Civil Code, contracts are binding upon the parties (and their assigns and heirs) who execute
them. When there is no privity of contract, there is likewise no obligation or liability to speak about and thus no cause
of action arises. Specifically, in an action against the depositary, the burden is on the plaintiff to prove the bailment or
deposit and the performance of conditions precedent to the right of action. A depositary is obliged to return the thing
to the depositor, or to his heirs or successors, or to the person who may have been designated in the contract.