Agad vs Mabato

FACTS:
This case involves a dispute between Mauricio Agad and Severino Mabato regarding their partnership in a fishpond business. Alleging that he(Agad) and defendant Severino Mabato are partners in a fishpond business,  the capital of which Agad contributed P1,000, with the right to receive 50% of the profits; that from 1952 up to and including 1956, Mabato had yearly rendered accounts of the operations of the partnership; and that, despite repeated demands, Mabato had failed to render accounts for the years 1957 to 1963,
 
Agad prayed in his complaint against Mabato and Mabato & Agad Company that judgment be rendered sentencing Mabato to pay him (Agad) the sum of P14,000, as his share in the profits of the partnership for the period from 1957 to 1963, in addition to P1,000 as attorney’s fees, and ordering the dissolution of the partnership, as well as the winding up of its affairs by a receiver to be appointed therefor.
 
In his answer, Mabato admitted the formal allegations of the complaint and denied the existence of said partnership, upon the ground that the contract therefor had not been perfected, despite the execution of Annex "A", because Agad had allegedly failed to give his P1,000 contribution to the partnership capital.
Mabato prayed, therefore, that the complaint be dismissed; that Annex "A" be declared void ab initio
 
Subsequently, Mabato filed a motion to dismiss, upon the ground that the complaint states no cause of action and that the lower court had no jurisdiction over the subject matter of the case, because it involves principally the determination of rights over public lands.
 
After due hearing, the court issued the order appealed from, granting the motion to dismiss the complaint for failure to state a cause of action. This conclusion was predicated upon the theory that the contract of partnership, Annex "A", 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. A reconsideration of this order having been denied, Agad brought the matter for review by record on appeal.

ISSUE:
Whether or not Article 1773 is applicable, where“immovable property or real rights” have been contributed to the partnership under consideration.
 
RULING:
it should be noted, that, as stated in Annex “A” the partnership was established “to operate a fishpond”, not to “engage in a fishpond business”. Moreover, none of the partners contributed either a fishpond or a real right to any fishpond. Their contributions were limited to the sum of P1,000 each.
WHEREFORE, 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 against defendant-appellee, Severino Mabato.