USA College of Law

FRIO 3C

MAURICIO AGAD, plaintiff-appellant,

vs.
Case Name
SEVERINO MABATO and MABATO and AGAD COMPANY, defendants-
appellees.
Topic Applicability of Article 1773 of Civil Code to the contract of partnership
Case No. |
G.R. No. L-24193 | June 28, 1968
Date
Ponente CONCEPCION, C.J.
Article 1773 of Civil Code - A contract of partnership is void, whenever immovable
Doctrine property is contributed thereto, if an inventory of said property is not made, signed by
the parties, and attached to the public instrument.
Link G.R. No. L-24193 (lawphil.net)

RELEVANT FACTS:
Mauricio Agad and Severino Mabato executed a public instrument to form a partnership engaged
in a fishpond business. Agad Contributed P1,000.00 with the right to receive 50% of the profits.
From 1952 up to and including 1956, Mabato who handled the partnership funds, hadyearly rendered
accounts of the operations of the partnership; that despite reapeated demands Mabato had failed and
refused to render accounts forthe years 1957 up to 1963 Agad prayed that judgment be rendered
sentencing Mabato to pay him the sum of P14,000 as his share in the profits of the partnership for the
period from 1957 to 1963. In his Answer, MAbato admitted the formal allegations of the complaint and
denied the existence of said partnership on the ground that the contract therefor had not been perfected
because Agad had allegedly failed to give his P1000 contribution to the partnership capital.
However, for the years 1957 to 1963, Mabato failed to render accounts and pay Agad his share in
the profits.

RTC Ruling

The complaint was subsequently dismissed upon the theory that the contract of partnership is null and
void pursuant to Art. 1773,CC because an inventory referred to had not been attached thereto.
Art. 1771. A partnership may be constituted in any form, except where immovable property or real rights
are contributed thereto, in which case a public instrument shall be necessary.
Art. 1773. A contract of partnership is void, whenever immovable property is contributed thereto,if
inventory of said property is not made, signed by the parties; and attached to the public instrument.

Thus, Agad brought the matter for review by record on appeal.

ISSUE:

Whether or not the provision on Art. 1773 of the Civil Code applies between Agad and Mabato.

RULING:
No. The Court held that Art. 1773 cannot apply. The public instrument forming the supposed
partnership indicated that it was established “to operate a fishpond” and not to “engage in a
fishpond business.” Moreover, no fishpond or a real right to any was contributed, even if a
fishpond or a real right thereto could become part of its assets, and that contributions merely
consisted of P1, 000.00 each from both parties. Thus, Art. 1773 and 1771 are inapplicable as a
basis for the dismissal of the complaint since no immovable property or real rights were
 USA College of Law
FRIO 3C
contributed.

RULING
WHEREFORE, we find that said Article 1773 of the Civil Code is not in point and that, the order appealed
from should be, as it is hereby set aside and the case remanded to the lower court for further proceedings,
with the costs of this instance against defendant-appellee, Severino Mabato. It is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

SEPARATE OPINIONS
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NOTES