If a friend gave me a phone that was under contract, who's is it legally?

He broke the phone, and never even got to activate it or register it in his name with Apple. He got angry and gave it to us. We waited a few days incase he changed his mind, and he never did. We then went ahead, and paid for the repairs with my debit card, and Apple decided to just send out a brand new one. Because it was a different phone, the IMEI number was different, so they gave us a sticker to put over the other one on the box. 3 months later, He is saying he wants the phone back, and refuses to even pay for the repair costs. I said I refuse to hand it back until we get the money, because I know we won't get the repair costs back otherwise. Who is in the right with this and who's phone is it legally? I paid for the repairs, and it's in my partners name now but on the contract our now ex friend got it on, it's in his name. Who owns it?