G.R. No. L-10106; November 23, 1915
ANTONIO DE LA RIVA, plaintiff-appellee, vs. RAFAEL MOLINA SALVADOR, ET AL., defendants-appellants.

FACTS:
In 1905, defendant Rafael Molina Salvador sued plaintiff Antonio de la Riva and secured the appointment of Joaquin Navarro as receiver over De la Riva’s property in Catanduanes. The other defendants, Juan Garcia and Fernando Martinez, acted as sureties on the receiver’s bond. In January 1907, the Supreme Court set aside the appointment as unauthorized by law (Molina vs. De la Riva). After the receivership was dissolved, the property was seized and sold at public auction under executions from other judgments against De la Riva, with the proceeds being insufficient to satisfy those judgments.

In 1908, De la Riva filed the present action. His first cause of action sought damages from the receiver and his sureties for: (1) property deterioration due to the receiver’s negligence; (2) losses from the receiver’s failure to continue the business; and (3) damages from an alleged conspiracy between the receiver and Molina Salvador to appropriate De la Riva’s business. His second cause of action, based on the allegedly wrongful appointment of the receiver, was dismissed by the trial court and not appealed. The trial court ultimately held the defendants liable for damages arising from the receiver’s improper performance of duties, even while finding insufficient evidence of a conspiracy.

ISSUE:
1. Whether defendant Rafael Molina Salvador can be held liable for the alleged negligent acts or mismanagement of the receiver after his appointment.
2. Whether the plaintiff presented sufficient proof of the receiver’s negligence and the resulting damages.
3. Whether a separate action against the receiver and his sureties for acts done in the management of the receivership can be maintained without leave of the court that appointed him.

RULING:
The Supreme Court REVERSED the trial court’s judgment and DISMISSED the action on the merits.

1. On Molina Salvador’s Liability: Molina Salvador cannot be held liable for the acts of the receiver after his appointment. Liability for damages arising from the receiver’s negligence or misconduct rests solely on the receiver and his sureties, not on the party who procured the appointment. The cause of action for wrongful appointment under Section 177 of the Code of Civil Procedure was inapplicable and had been properly dismissed, as no bond was given by Molina for such appointment and any claim for those damages should have been made in the original action, not in a separate suit.

2. On Sufficiency of Evidence: The plaintiff failed to prove both the alleged negligence of the receiver and the specific damages suffered. The evidence did not establish the value of the property at the beginning and end of the receivership with sufficient certainty to prove deterioration. Furthermore, the record indicated the business was not profitable at the time of the receiver’s appointment, and the receiver continued it as best he could under the circumstances.

3. On Proper Remedy Against a Receiver: A separate action against a receiver for his management of the receivership property cannot be maintained without first obtaining leave from the court that appointed him. A receiver is an officer of the court, and his acts and possession are considered the acts and possession of the court. The proper procedure for a party aggrieved by a receiver’s acts is to seek relief within the original receivership proceeding, such as by asking for an accounting or for the court’s permission to bring a separate suit. At the time this action was filed, an accounting proceeding initiated by the receiver was still pending in the appointing court.

Arellano, C.J., and Torres, J., concurred. Carson, J., concurred in the result.