SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S.B. No.2 2 4 0 
) 
) 
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Introduced by Senator Maria Lourdes Nancy S. Binay 
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'14 
MAY 26 P 5 :53 
AN ACT AMENDING ARTICLE 1773 OF REPUBLIC ACT NO. 386, OTHERWISE 
KNOWN AS THE NEW CIVIL CODE OF THE PHILIPPINES BY CLARIFYING THE 
LEGAL EFFECT OF FAILURE TO COMPLY WITH THE FORMAL REQUIREMENTS 
IN A CONTRACT OF PARTNERSHIP WHERE AN IMMOVABLE PROPERTY IS 
CONTRIBUTED 
EXPLANATORY NOTE 
Article 1773 of the New Civil Code of the Philippine provides that a contract of partnership 
shall be void if an inventory of the immovable properties is not attached to the public 
instrument presented to the Securities and Exchange Commission. 
There are instances, however, when the inventory of the immovable contributed to the 
partnership is not provided or is executed with defects (due to incomplete information) 
through excusable neglect or inadvertence, which should not adversely affect the status of the 
contract of the partnership. 
The proposed bill thus seeks to amend Article 1773 of the New Civil Code to state the failure 
to attach an inventory of the immovable or attaching an inventory which does not accurately 
reflect the contribution of the partners will not affect the validity of the partnership and the 
separate juridical personality of said partnership. However, such failure to attach and or an 
inaccurate inventory will give rise to penal liabilities of the person(s) responsible for such 
failure and or inaccuracy as provided under applicable penal laws. 
In view of the foregoing, the passage of this bill is earnestly recommended. 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
Introduced by Senator Maria Lourdes Nancy S. Binay 
·14 my 26 P5 :53 
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AN ACT AMENDiNG ARTICLE 1773 or REPUBLIC ACT NO. 386, OTHERWISE 
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KNOWN AS THE NEW CIVIL CODE OF THE PHILIPPINES BY CLARIFYING THE 
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LEGAL EFFECT OF FAILURE TO COMPLY WITH THE FORMAL REQUIREMENTS 
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IN A CONTRACT OF PARTNERSHIP WHERE AN IMMOVABLE PROPERTY IS 
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CONTRIBUTED 
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Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
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assembled: 
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SECTION 1. Amendment. Article 1773 of Republic Act No. 386, otherwise known as the 
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New Civil Code ofthe Philippines is hereby amended to read as follows: 
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Art. 1773. [A contract of partnership is void,] [w] Whenever immovable 
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property is contributed IN A CONTRACT OF PARTNERSHIP [thereto, if] 
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an inventory of said property [is not] SHOULD BE made, signed by the 
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parties, and attached to the public instrument. 
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FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE 
PRECEDING PARAGRAPH SHALL NOT AFFECT THE LIABILITY OF 
THE PARTNERSHIP AND THE MEMBERS THEREOF TO THIRD 
PERSONS, WITHOUT PREJUDICE TO THE IMPOSITION OF PENAL 
SANCTIONS 
TO 
PERSONS 
LIABLE 
AS 
PROVIDED 
UNDER 
APPLICABLE LAWS. 
SECTION 2. Separability Clause. If any provision or part of this Act, or the application 
thereof to any person or circumstance be held unconstitutional or be invalid, such parts not 
affected thereby shall remain in full force and effect. 
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SECTION 3. Repealing Clause. All laws, decrees, executive orders, proclamations, rules and 
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regulations and other issuance of parts thereof, inconsistent with the provisions of this Act are 
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hereby repealed or modified accordingly. 
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SECTION 4. Effectivity. This Act shall take effect fifteen (15) days after its complete 
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publication in at least two (2) newspapers of general circulation. 
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Approved,