With the coffin, 69-year-old Frenchman Michel Kessous has stepped up a protest which began recently when he placed tombstones on his patio.
The idea behind the macabre displays is to scare people away from dining at the newly-opened terrace of the L'Escoleta restaurant behind his home.
Kessous told Spain's 20 minutos newspaper the noise from the restaurant's extractor fan was unbearable, while customers would often sit around chatting until 2am.
"We don't know what he's going to do next. Maybe he'll put skulls out," Juan Carlos Villar, owner of the L'Escoleta restaurant said on Monday, adding he won't launch an official complaint because he doesn't want to start a "war between neigbours".
"The ball is in the town hall's court. I don't want to get involved," he added.
"We don't understand why the town hall went over plans for minor renovations with a fine-toothed comb but now won't move a finger when a tomb is put out for everyone to see," one local resident complained.
"It's clear that decorum has to come first," the restaurant owner said.
The local town hall is now trying to establish whether the scaffolding used to display the coffin is legal while the "ashamed" restaurant owner is telling customers he has an "odd neighbour".