Agad v. Mabato

Summary

This Supreme Court case resolved the validity of a partnership contract under Civil Code Article 1773. Mauricio Agad and Severino Mabato formed a partnership to operate a fishpond, each contributing P1,000 cash. When Mabato failed to render accounts from 1957-1963, Agad sued for his profit share and partnership dissolution. The trial court dismissed the case, ruling the partnership was void under Article 1773 for lack of property inventory. The Supreme Court reversed, clarifying that Article 1773 only applies when immovable property is contributed to the partnership. Since both partners contributed only cash and the fishpond was merely the business purpose (not a capital contribution), the partnership was valid. This decision established important precedent distinguishing between partnership assets and capital contributions in determining Civil Code partnership formation requirements.