Query: Does Article 1773 apply when the contributed property to a partnership is a land usufruct?

In Philippine law, Article 1773 of the Civil Code states that a contract of partnership where immovable property is contributed is void unless an inventory of said property is made, signed by the parties, and attached to the public instrument. The main legal concern is whether this provision applies to the contribution of a usufruct, not the ownership of the land itself.

Usufruct Defined: Usufruct grants a person the right to use and enjoy the property of another, with the obligation of preserving its form and substance, unless the title constituting it or the law otherwise provides.

Interpretation of Article 1773:

Scope of "Immovable Property": Typically, immovable property refers to the land and buildings adhered to it. Usufruct, although a right over immovable property, does not confer ownership but only usage rights. Therefore, it is debatable whether usufruct falls under the scope of Article 1773.
Legal Opinions and Jurisprudence: Philippine jurisprudence and legal interpretations tend to require clarity on the matter. However, to ensure compliance with the law and to avoid potential disputes, it is advisable for the parties to treat usufruct similarly to direct immovable property contributions. This involves preparing an inventory signed by all parties, detailing the usufruct rights and obligations.

Practical Application:

Creating an Inventory: To comply potentially with Article 1773, parties contributing a usufruct to a partnership should prepare an inventory of the usufruct rights. This document should describe the rights conferred, the duration, and any specific conditions or responsibilities attached to the usufruct.
Public Instrument: The inventory should be attached to the partnership agreement, which should be notarized. This step helps in formalizing the document and making it part of the public record, thereby adhering to the transparency required by law.

Legal Advice:

Consulting a Lawyer: Given the complexity and the potential for significant financial implications, parties should consult with a legal professional. This ensures that the partnership agreement, including any contribution of usufruct, complies with all applicable laws and regulations.
Clear Agreement Terms: Clear terms regarding the usufruct, including its management, expenses, and termination, should be explicitly stated in the partnership agreement to avoid future disputes.

Conclusion:

While Article 1773 explicitly mentions immovable property, the inclusion of usufruct in its scope remains a gray area and can be subject to legal interpretation. Parties should proceed with caution and consider securing a legal inventory of the usufruct rights when forming a partnership. This approach not only minimizes legal risks but also aligns with the principles of clarity and transparency in business agreements.