G.R. No. L-25301 October 26, 1968
GOLD STAR MINING CO., INC., petitioner, vs. MARTA LIM-JIMENA, CARLOS JIMENA, GLORIA JIMENA, AURORA JIMENA, JAIME JIMENA, DANTE JIMENA, JORGE JIMENA, JOYCE JIMENA, as legal heirs of the deceased VICTOR JIMENA, and JOSE HIDALGO, respondents.

FACTS

In 1937, Ananias Isaac Lincallo agreed in writing to give Victor Jimena one-half of the proceeds from mining claims purchased with Jimena’s money. This was modified in 1939 to include equal sharing of the lands themselves. Lincallo later assigned mining rights to Gold Star Mining Co., Inc. After the war, Lincallo entered into several contracts regarding these claims (including with Gold Star and Marinduque Iron Mines Agents, Inc.) for his sole benefit, despite Jimena’s repeated demands for recognition of his half-share. On July 14, 1952, Lincallo promised to settle with Jimena but failed. Instead, on August 16, 1952, he transferred 35% of his 45% royalty share from Gold Star to Gregorio Tolentino. On September 2, 1954, Jimena sued Lincallo for recovery of advances and his share of royalties, later joining Gold Star, Marinduque Iron Mines, Inc., and Tolentino as defendants. On September 17, 1954, the trial court issued a writ of preliminary injunction restraining Gold Star and Marinduque Iron Mines from paying royalties to Lincallo, his assigns, or representatives during the case’s pendency. Despite this, Gold Star paid P30,691.92 to Lincallo and Tolentino. Gold Star claimed the injunction was superseded by a May 25, 1955 order granting Jimena’s petition for a writ of preliminary attachment, but no attachment writ was issued because Jimena’s bond was disapproved. The trial court rendered a decision, which the Court of Appeals affirmed in toto, condemning Gold Star to pay P30,691.92 solidarily with Lincallo for violating the injunction.

ISSUE

1. Whether respondents Jimena have a cause of action against petitioner Gold Star Mining Co., Inc.
2. Whether the award of P30,691.92 against Gold Star for violation of the injunction is proper.

RULING

1. Yes, respondents Jimena have a cause of action against petitioner Gold Star. The Court of Appeals’ reasoning, adopted by the Supreme Court, held that while no direct privity of contract existed between Jimena and Gold Star, the common subject matter (the mining claims and royalties) supplied the juridical link. Jimena had repeatedly demanded payment from Gold Star, which refused to recognize his rights, necessitating its joinder as a defendant. The situation is analogous to that of successive mortgagees. Furthermore, under Article 1177 of the Civil Code, creditors may exercise the rights of their debtor. Alternatively, Lincallo, in transferring the claims without disclosing Jimena’s co-ownership (of which Gold Star had knowledge), could be considered as acting as Jimena’s agent regarding his share.
2. Yes, the award of P30,691.92 is proper. The preliminary injunction was subsisting and was violated by Gold Star when it made the payment, as no writ of attachment was issued to supersede it. The award is not a penalty for contempt but a decree of restitution to make the violated injunction effective by placing the parties in the condition they would have been in had the injunction been obeyed. The amount would have been available to satisfy Jimena’s claims against Lincallo if Gold Star had not paid it. The judgment specified the payment was “to be imputed to Lincallo’s liability,” leaving Gold Star open to recover the amount from Lincallo. The general prayer for “other equitable relief” in the complaint covered this award. The Supreme Court affirmed the decision of the Court of Appeals.