GOLD STAR MINING V. LIM-JIMENO Jimena and Tolentino died and were substituted by their widows and children.
(1968|Reyes)  RTC (Jimena won): (1) Jimena’s heirs entitled to ½ of the 45% share of
1. Lincallo bound himself in writing to Jimena turn ½ of the proceeds from all mining
claims he would purchase with the money to be advanced by Jimena.
 Later modified in a notarial instrument registered with the Register of Deeds
of Marinduque in his capacity as mining recorder, so as to include in the
equal sharing arrangement the proceeds from several mining claims (all
bought by Lincallo with P5,800 supplied by Jimena), but also the lands
constituting the same, and so as to bind their "heirs, assigns, or legal
representatives."
2. The mining rights over part of the claims were assigned by Lincallo to Gold Star
Mining Co., Inc., sometime before World War Il for P5,000, for consideration and as
a quitclaim for, pre-war royalties.
3. After, Lincallo, in his own name and for his benefit alone, made the claims the
subject of several contracts.
 Lincallo and Marquez as separate owners of mining claims agreed with
Goldstar (assignee) to give Lincallo 45% of the royalties due to the
corporation
 Lincallo, Marquez and Cong. Manguerra as owners: leased certain claims to
Cabarrus
o Cabarrus transferred it to Marinduque Iron Mines Agents
 Agreed that 43% of the royalties due to Marinduque would
be paid to Lincallo
4. 1939-1952, Jimena had been asking for his shares from Goldstar and Marinduque
Iron Mines Agents of his interests in the claims assigned or leased and demanded his
payment of ½ share in all loyalties. Both ignored Jimenez.
 He also demanded from Lincallo but despite promises, he never settled his
accounts. Instead, Lincallo transferred 35 of his 45% share to Tolentino for
P10,000.
5. Jimena filed a suit vs. Lincallo for recovery of his advances and his share in
royalties with Gold Star Mining and Marinduque Iron Mines as defendants.
 RTC: issued writ of preliminary injunction to defendants from paying royalties
during the pendency of the case to Lincallo, his assigns or legal
representatives. However, it was found to have paid P30, 691.92 to Lincallo
and Tolentino. “The corporation claimed that the injunction had been
superseded and/or dissolved by the trial court's grant of Jimena's petition for
a writ of preliminary attachment "to supersede the writ of preliminary
injunction previously issued." But as the grant was conditioned upon filing of
a bond to be approved by the trial court, no writ of attachment was issued
because the bond offered by Jimena was disapproved.” (not impt)
1 Privity of contract: a contract cannot confer rights nor impose its obligations upon
any person who is not a party to the contract; only parties to contracts should be able
to sue to enforce their rights or claim damages as such.
royalties of Lincallo under his contract with Goldstar and ½ of the 43%
shares of rental of Lincallo under his contract with Cabarrus assigned to
Marinduque Iron Mines and his contract with Marquez
 (2) Lincallo has to pay P5,800 legal interest, ½ share of the royalties paid by
Goldstar to Lincallo and ½ share of Jimena on rentals which is Lincallo’s
share paid by Marinduque Iron Mines
 (3) DOS between Lincallo and Tolentino was valid but transferred only ½ of
the 45% share of Lincallo, ordered Gold Star Mining Company to pay
plaintiffs even if there was cession to Tolentino so that 1/2 of the royalties
due unto Lincallo should always be paid by Gold Star unto plaintiffs
notwithstanding said cession
 (4) condemn estate of Tolentino to pay plaintiffs
 (5) Judgment is rendered condemning defendant Gold Star Mining Company
to pay to plaintiffs solidarily with Lincallo and to be imputed to Lincallo's
liability under this judgment unto Jimena, the sum of P30,691.92; (as
restitution for violating the injunction)
 (6) Marinduqe Iron Mines to pay plaintiffs
All four defendants, Lincallo, Tolentino’s heirs, and the two corporations appealed (but
Marinduque Iron Mines Agents, Inc. withdrew, and Lincallo’s was dismissed for the
failure to file brief).
 CA affirmed.
o Gold Star Mining Co., Inc., moved for reconsideration of said
decision insofar as its adjudged solidary liability with Lincallo to pay
to the Jimenas the sum of P30,691.92 "for flagrant violation of the
injunction" was concerned.
 DM. Appeal.
Goldstar argues that [please see issues]
ISSUE:
1. W/N Goldstar should have been impleaded when it was not a party to the contract
between Jimena and Lancillo - YES
2. W/N Jimena has a cause of action against Goldstar – YES
3. W/N Goldstar is liable to pay P30, 691.92 for violating the injunction - YES
HELD:
1. Goldstar argues that there is no privity of contract1 between it and Jimena thus it
should not have been impleaded.
 This is similar to the status of the 1st and 2nd mortgagees of a
registered real estate mortgage, While there is no privity of contract
between them, the common subject-matter supplies the juridical link.
  Evidence shows that Jimena made prewar and postwar demands from Gold
Star for the payment of his ½ share of all royalties. Thus Goldstar had to
impleaded in the case.
 “El deudor de mi deudor es deudor mio," or "creditors, after having
pursued the property in possession of the debtor to satisfy their
claims, may exercise all the rights and bring all the actions of the latter
(debtor) for the same purpose, save those which are inherent in his
person; they may also impugn the acts which the debtor may have
done to defraud them” which is in accordance with Art. 11772.

2. There is a cause of action. Lincallo, in transferring the mining claims to

Goldstar without telling it Jimena was a co-owner (although Goldstar knew
because Jimena made claims) acted as Jimena’s agent with respect to Jimena’s
share of the claims.
 CAUSE OF ACTION: Article 1883, New Civil Code, which provides that
the principal may sue the person with whom the agent dealt with in his
(agent's) own name, when the transaction "involves things belonging
to the principal."

3. Gold Star Mining Co., Inc., insists that it may not be penalized for breach of the
injunction without prior written charge for indirect contempt, and due hearing, citing
section 3 of Rule 64 of the old Rules of Court, now Rule 71 of the Revised Rules

 The preliminary injunction was violated by Goldstar when it paid the sum of
P30,691.92 to Lincallo and Tolentino.
 The award is not a penalty but a decree of restitution to make the violated
injunction effective by placing the parties in the same condition as if the
injunction had been fully obeyed. If only Goldstar did not pay Lincallo, the
amount would now be available for the satisfaction of the claims of Jimena
and Lincallo. The judgement of RTC allowed for Goldstar to later recover the
whole amount from Lincallo either by direct action or deducting it from
royalties that may fall due to his 1951 contract.

RSAT

2 (Interpretation: Creditors’ remedies are (1) specific performance + damages, (2) with all his property, present and future. Needs Goldstar impleaded since it owes
exhaustion of debtor’s properties if wala pa, (3) exercise all rights and bring all actions Lincallo in the contract but as Jimena is a co-owner it is subrogated to Lincallo’s rights
of debtor or subrogation and (4) rescind fraudulent acts. Debtor or Lincallo is liable to collect from Goldstar.