Short answer. Yes. Where immovable property is contributed, the Code makes the contract of partnership void if an inventory of that property is not made, signed by the parties, and attached to the public instrument. All three elements are required, and the consequence is nullity rather than mere unenforceability.
What the law says
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.
Civil Code, Article 1773 — Inventory of Immovables. Read the full provision →
Three requirements, not one
Read the article slowly, because partnerships fail on each of its parts separately. There must be an inventory of the immovable property; it must be signed by the parties; and it must be attached to the public instrument. An inventory prepared but never signed does not satisfy it. One signed but kept in a drawer rather than annexed to the deed does not satisfy it either. The requirement sits on top of Art. 1771, which already demands a public instrument whenever immovable property or real rights are contributed, so both provisions have to be met.
Why the Code is this strict here
Land is the contribution most likely to be described vaguely and disputed later. An inventory forces the partners to identify the parcel, its boundaries, its improvements and what is being put in, at a moment when they still agree — before there is anything to argue about. It also tells creditors and third persons what the partnership actually holds. The sanction is severe because a partnership whose main asset was never properly described is an invitation to precisely the litigation the formality was designed to prevent.
What "void" leaves behind
A void contract produces no partnership, so nobody can sue on it as a partner — there is no right to an accounting under the partnership rules, no share in profits by virtue of it, and no authority to bind the others as partners. What survives is everything outside the contract. Contributions actually made were made for a cause that failed, and the person who put in land or money has a claim to get it back rather than a claim to a share. Note also the contrast with Art. 1772, where a failure to register does not invalidate anything and expressly does not affect liability to third persons.
If your partnership is in this position
The defect is one of formation, so it is cured going forward rather than argued away. Have the property properly inventoried and signed now, and execute the partnership in a public instrument with that inventory annexed. Until that is done, treat the arrangement as what it is: individual persons dealing with each other, whose contributions are traceable and recoverable. Gather the title, the tax declaration and whatever records show what each person actually put in and when — those documents decide the restitution question whatever happens to the partnership itself.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Antonia Torres, et al. vs. Court of Appeals, et al, G.R. No. 134559, December 9, 1999 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 1773 — Inventory of Immovables
- Civil Code, Article 1771 — Form of a Partnership
- Civil Code, Article 1772 — Registration of a P3,000+ Partnership
- Civil Code, Article 1767 — Contract of Partnership Defined