07 Agad Vs. Mabolo.docx

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[INTRODUCTION; FORM] 01 AGAD V. MABATO June 28, 1968 | Concepcion, C.J. | Petitioner/s: Mauricio Agad Respondent/s: Severino Mabato and Mabato & Agad Company Doctrine: 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. Facts: ●

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On Aug. 29, 1952, Agad and Mabato, pursuant to a public instrument, engaged in a partnership for a fishpond business. Agad contributed P1,000, with right to receive 50% of profits. Mabato handled the partnership funds. ○ 1952-1956: Mabato rendered yearly accounts therefor ○ 1957-1963: Mabato failed to render accounts despite repeated demands Aggrieved, Agad filed the complaint to (1) claim P14,000 as share in profits from 1957-1963 and P1,000 as attorney’s fees, and (2) ask for order of dissolution of partnership and winding up of its affairs. ○ Mabato’s defense: denied existence of partnership; contract therefor had not been perfected despite execution of the public instrument as Agad failed to give his P1,000 contribution to the capital; filed a motion to dismiss ○ TC: Motion to dismiss granted; contract of partnership was null and void pursuant to NCC 17731 as inventory of fishpond allegedly contributed to the partnership was not attached thereto; subsequent MR denied.

Ruling: W/N the partnership agreement was void for not having an inventory of immovable property or real rights contributed thereto.—NO. No fishpond was contributed to the partnership. As such, the partnership was valid in the form it was entered into. ● The general rule in NCC 1771 provides that 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. 1

NCC 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if an inventory of said property is not made, signed by the parties, and attached to the public instrument.

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Under the exception, the contract shall be void if inventory of the property contributed is not made, signed by the parties, and attached to the public instrument pursuant to NCC 1773. However, NCC 1773 does not apply. No contribution of a fishpond was actually made, nor can such contribution be inferred from the purpose of the partnership constituted. ○ The partners’ respective contributions to the capital were limited to cash amounting P1,000. This is bolstered by par. 4 of the partnership agreement, stating that the capital of the partnership was only cash worth P2,000. ○ Moreover, the partnership agreement stated that the partnership was established “to operate a fishpond”, not to “engage in a fishpond business”. Thus, contrary to the allegation of Mabato, a fishpond property was not necessary for the partnership, and the contribution of the same cannot be assumed.

Dispositive 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.