Jose's Jose Refusal Cruz Justified Thing Car Incurred

IV. 

Cruz lent Jose his car until Jose finished his Bar exams. Soon after Cruz delivered the car, Jose brought it to Mitsubishi Cubao for maintenance check up and incurred costs of P8,000. Seeing the car's peeling and faded paint, Jose also had the car repainted for P1O,OOO. Answer the two questions below based on these common facts.

IV.(l)  After the bar exams, Cruz asked for the return of his car. Jose said he would return it as soon as Cruz has reimbursed him for the car maintenance and repainting costs of P 18,000.  Is Jose's refusal justified? (1%)

(A)  No, Jose's refusal is not justified. In this kind of contract, Jose is obliged to pay for all the expenses incurred for the preservation of the thing loaned.

(B)  Yes, Jose's refusal is justified. He is obliged to pay for all the ordinary and extraordinary expenses, but subject to reimbursement from Cruz.

(C)  Yes, Jose's refusal is justified. The principle of unjust enrichment warrants the reimbursement of Jose's expenses.

(D)  No, Jose's refusal is not justified. The expenses he incurred are useful for the preservation of the thing loaned. It is Jose's obligation to shoulder these useful expenses.

SUGGESTED ANSWER:

(D)

In commodatum, the bailee is oblige to pay for the ordinary expenses for the use and preservation of the thing loaned (Article 1941, Civil Code).

The bailee, Jose, has no right of retention on the ground that the bailor owes him something, even if it may be by reason of expenses.  He can only retain it if he suffers damages by reason of a flaw or defect in the thing loaned of which the bailor knows. (Art. 1951 Civil Code)