Gold Star Mining Co., Inc.

,
vs
Jimena

(GR No. L-25301)

October 26, 1968

en banc decision
Ponente: J.B.L. Reyes

1
 Antecedent Facts
• 1937 - Victor Jimena and Ananias Isaac Lincallo agreed to
purchase mining claims

• Jimena provided the money (P5,800), Lincallo made the

purchases

• Prior to the purchases, Lincallo bound himself in writing to turn

over 1/2 of whatever proceeds from the mining claims to be
acquired

• Shortly, Lincallo assigned mining rights over part of the claims to

Gold Star Mining Co. [Proof: in 1950, Gold star paid Lincallo
P5,000 in consideration of, and as quitclaim for, pre-war
royalties]

2
 Antecedent Facts
• Thereafter, Lincallo entered into contracts over the mining claims in
his own name and for his benefit:

• Sep 19 1951 - Lincallo and a certain Alejandro Marquez (also

a mining claims holder) with Gold Star for allotment to
Lincallo of 45% of royalties due from Gold Star

• Jan 1952 - Lincallo, Marquez and Cong. Panfilo Manguerra,

leased certain rights to a Jacob Cabarrus who transferred it
to Marinduque Iron Mines Agents, Inc (MIMAI)

• Feb 29 1952 - the lessors entered into a contract wherein

43% of royalties due from MIMAI were to be paid to Lincallo

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 Antecedent Facts
• Jimena was never remiss in asserting his rights:

• repeatedly apprised Gold Star and MIMAI of his interests

over the mining claims assigned and/or leased by
Lincallo [Aug 1939 - Sep 1952]

• demanded payment of his 1/2 share in royalties paid and

to be paid to Lincallo

-Both Gold Star and MIMAI ignored Jimena’s demands

• demanded from Lincallo his share in royalties and the

P5,800 advanced

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 Antecedent Facts

• Lincallo promised Jimena (albeit on and off) that he

(Lincallo) would settle his obligations; for the last time
Lincallo promised to do so before the 30th of July 1952

• Lincallo failed to settle his accounts

• On Aug 16 1952, Lincallo transferred [allegedly for

P10,000] 35 of his 45% share in the royalties due from
Gold Star, to a Gregorio Tolentino,

5
 Proceedings in the
court aquo
• Sep 2 1954 - Jimena sued Lincallo for recovery of his
advances (P5,800) and his 1/2 share in the royalties.
Later, Gold Star, MIMAI and Tolentino were joined as
defendants

Before the court issued its judgment, Jimena and Tolentino

died so they were substituted by their respective widows and
children

• The trial court ruled in favor of Jimena granting his prayers

including interests and attorneys fees

6
 Proceedings in the CA

• All four defendants appealed but MAMAI withdrew and

Lincallo’s was dismissed

• Among the issues raised was that the trial court erred in
not dismissing the action as “there is no privity of
contract between Gold Star and Jimena.”

• The CA affirmed the trial court’s ruling in toto

7
 The Petition

• Aggrieved by the CA’s ruling, Gold Star raised the matter

to the Supreme Court.

• Petitioner argues that the CA erred in finding that

respondents (heirs of Jimena) have a cause of action
against it (Gold Star)

8
 Issue

Whether or not Jimena has

a cause of action against Gold
Star

9
Supreme Court’s Ruling
Affirmative.

It can be said that Lincallo, in transferring the mining

claims to Gold Star (without disclosing that Jimena was a co-
owner although Gold Star had knowledge of the fact as
shown by the proofs mentioned) acted as Jimena’s agent
with respect to Jimena’s share of the claims.

Under such conditions, Jimena has an action against

Gold Star, pursuant to Article 1883 of the 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.”

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 Important lessons
from the case

• A co-owner is an agent of his co-owner(s) as regards the

share of the latter (his co-owners) of the property co-
owned

• Non-disclosure by the agent (purported owner of the thing,

in this case) of the principal (co-owner in this case) to a
party to a contract involving property co-owned with the
principal does not deprive the principal (co-owner) the right
to sue said party over rights involving such property

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 Important lessons
from the case
• In ruling that Jimena has cause of action against Gold
Star, the Court “skirted” on the latter’s argument that the
complaint of Jimena does not show such cause of action.
The Court, instead, compared the situation with that of the
first and second mortagees = there exists no privity but the
common subject-matter supplies the juridical link.

• The Court then established that Gold Star is the debtor of

Jimena for the royalties due to the latter who evidently
made demands for such. The court further ruled that the
refusal of Gold Star justified Jimena’s move to implead it.

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 Important lessons
from the case

• Establishing the debtor-creditor relationship, the Court

addressed the issue using Art. 1177 of the New Civil Code
which provides that “creditors, after having pursued the
property in possession of the debtor to satisfy their claims ,
may exercise all the rights and bring all 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.”

13
 Important lessons
from the case
• The Court did not really have to use the NCC provisions
on Agency to resolve the case. However, in his brilliance,
Justice Reyes found it just as fitting to use the Law on
Agency in relation to co-ownership. [Thus, the words
“From another standpoint, equally valid and
acceptable,.....”].

• The use of both Articles 1177 and 1883 of the NCC laid to
rest, beautifully and convincingly, the issue of the
existence of cause of action of Jimena against petitioner.

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Thank you!

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