Agad v. Mabato and Agad Company
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. Mabato handled the partnership funds and rendered accounts of the operations of the partnership. However, for the years 1957 to 1963, Mabato failed to render accounts and pay Agad his share in the profits. Thus, Agad filed a complaint for the recovery of the amount. However, Mabato contended that no partnership had ever existed since the contract was not perfected because Agad allegedly failed to contribute his P1,000.00 contribution. The court dismissed the complaint since the contract was void for being in violation of Art. 1773 in because no inventory of the fishpond had been attached with the instrument.
Does the provision on Art. 1773 of the Civil Code apply?
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 contributed.