AGAD v. MABOLO and AGAD CO.

23 SCRA 1223 (1968) Facts:

Petitioner Mauricio Agad claims that he and defendant Severino Mabato are partners in a fishpond
business to which they contributed P1000 each. As managing partner, Mabato yearly rendered the accounts
of the operations of the partnership. However, for the years 1957-1963, defendant failed to render
the accounts despite repeated demands. Petitioner filed a complaint against Mabato to which a copy of
the public instrument evidencing their partnership is attached. Aside from the share of profits (P14,000)
and attorney’s fees (P1000), petitioner prayed for the dissolution of the partnership and winding up of
its affairs.

Mabato denied the existence of the partnership alleging that Agad failed to pay his P1000
contribution. He then filed a motion to dismiss on the ground of lack of cause of action. The lower
court dismissed the complaint finding a failure to state a cause of action predicated upon the theory
that the contract of partnership is null and void, pursuant to Art. 1773 of our Civil Code, because an
inventory of the fishpond referred in said instrument 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.

Issue: Whether or not immovable property or real rights have been contributed to the partnership. – NO
Ratio:

Based on the copy of the public instrument attached in the complaint, the partnership was established to
operate a fishpond", and not to "engage in a fishpond business.” Thus, Mabato’s contention that “it is really
inconceivable how a partnership engaged in the fishpond business could exist without said fishpond
property (being) contributed to the partnership” is without merit. Their contributions were limited to P1000
each and neither a fishpond nor a real right thereto was contributed to the partnership. Therefore, Article
1773 of the Civil Code finds no application in the case at bar. Case remanded to the lower court for further
proceedings.