MAURICIO AGAD,plaintiff-appellant,

vs.
SEVERINO MABATO and MABATO
and AGAD COMPANY,defendantsappellees.

Art. 1773.
Acontract of partnership is void, whenever
immovablepropertyiscontributedthereto,if
inventory of said property is not made,
signed by the parties; and attached to the
public instrument.

FACTS OF THE CASE

- SeverinoMabatoandMauricioAgadpartnersinafishpondbusiness.
- TheircontributionswerelimitedtothesumofP1,000each:
That the capital of the said partnership is Two Thousand (P2,000.00) pesos
Philippine Currency, of which One Thousand (P1,000.00) pesos has been contributed
by Severino Mabato and One Thousand (P1,000.00) Pesos has been contributed by
Mauricio Agad.

- 19521956
AgadcontributedP1,000,withtherighttoreceive50%oftheprofits;
Mabatohandledthepartnershipfunds,hadyearlyrendered
accountsofthe
operationsofthepartnership.
- 1957 to 1963
Mabato had failed and refused to render accounts.

AGAD CLAIM
- PrayedinhiscomplaintagainstMabatoandMabato&AgadCompany,filedon
June 9, 1964, that judgment be rendered sentencing Mabato to pay the
sumofP14,000,ashisshareintheprofitsofthepartnershipfortheperiodfrom
1957to1963.
- In addition to P1,000 as attorney's fees, and ordering the dissolution of the
partnership.
MABATO REPLY
- Admissionoftheformalallegationsofthecomplaint
- Denialoftheexistenceofsaidpartnership
-Ground:a.thecontractnotbeenperfected,(Agadallegedlyfailedto
givehis P1,000contributiontothepartnershipcapital)
- Thecomplaintbedismissed.
- Partnershipbedeclaredvoidab initio;
- Paymentofactual,moralandexemplarydamages,aswellasattorney'sfees.

Court of First Instance of Davao

GrantingMotiontoDismissfiledbyMabato
Grounds:Failure to State a Cause of Action.
LowerCourthadnojurisdictionoverthesubjectmatterofthe
case,
because it involves principally the determination of rights
over public
lands.
Thisconclusionwaspredicateduponthetheorythatthecontract
of partnership, is null and void, pursuant to Art. 1773 of Civil Code,
becauseaninventoryofthefishpondreferredinsaidinstrument hadnot
beenattachedthereto.

ISSUE:
Whether or not "immovable property or real rights" have
beencontributedtothepartnershipunderconsideration.

SUPREME COURT RULING

An inventory is required only whenever immovable property is
contributed. Hence, Article 1773 does not apply in the case of
immovable property which may be possessed or even owned by
thepartnershipbutnotcontributedbyanyofthepartners.
Thus,ithasbeenheldthatapartnershipcontractwhichstatesthat
the partnership is established to operate a fishpond (not to
engage in a fishpond business) is not rendered void because no
inventory of the fishpond was made where it did not clearly and
positivelyappearinthearticlesofpartnershipthattherealproperty
hadbeencontributedbyanyoneofthepartners.

POSSIBLE BAR QUESTION

1. What is the difference of Article 1771 to Article 1773 in
relation to contract as void?
Answer:
The absence of either formality renders the contract
void. Although Article 1771 does not expressly state
that without the public instrument the contract is void,
Article 1773 is very clear that the contract is void if the
formalities specifically provided therein are not
observed, implying that compliance therewith is
absolute and indispensable for validity.