Constitutional Law 1 State Immunity of a Foreign State

G.R. No. 101949 December 1, 1994 THE HOLY SEE, petitioner, vs. THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES ENTERPRISES, INC., respondents.

Facts: The petitioner Holy See (the Pope) acquired a parcel of land (6,000 sq. m.) Lot 5-A as a donation from the Archdiocese of Manila to be used for the construction thereon of the official place of residency of the Papal Nuncio (the Holy Sees diplomatic envoy). The lot was occupied by squatters who refused to vacate so the lot, along with contiguous lots 5-B and 5-D registered in the name of Philippine Realty Corporation (PRC), was sold to Ramon Licup through Msgr. Domingo A. Cirilos, Jr. who was acting as agent to the sellers. Licup paid earnest money (deposit) of P100,000 under the condition that the sellers would clear the lots of squatters. In the same month, Licup assigned his rights over the property to private respondent Starbright Sales Enterprises, Inc., a domestic corporation engaged in real estate business. The conflict arose when none from the parties claimed the responsibility of clearing the lots which led to Msgr. Cirilos returning the earnest money to private respondent and demanded the latter to pay the original price in cash. Private respondent sent the earnest money back to the sellers but found out that the lots were sold to Tropicana Properties and Development Corporation. Private respondent, then, filed a civil case, praying for the annulment of the Deed of Sale between the petitioner and PRC, and Tropicana as well as for damages, among others. The petitioner moved to dismiss the complaint for lack of jurisdiction based on sovereign immunity from suit but the trial court denied, among others, the motion to dismiss after finding that petitioner "shed off [its] sovereign immunity by entering into the business contract in question". The petitioner filed a motion for reconsideration as well as "Motion for a Hearing for the Sole Purpose of Establishing Factual Allegation for claim of Immunity as a Jurisdictional Defense." The trial court deferred the resolution on the motion for reconsideration until after the trial on the merits.

Issue: WON (Whether or not) the Holy See is entitled to and can invoke sovereign immunity from suit?

Ruling: The Court held that the petitioner Holy See is entitled to sovereign immunity from suit. The Department of Foreign Affairs, authorized under the Public International Law, as it intervened in the case, officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines; thus, is exempted from the local jurisdiction and entitled to rights, privileges and immunities of a diplomatic mission or embassy in the country. Furthermore, the petitioner can still invoke sovereign immunity from suit despite selling the land to a private business entity. The restrictive theory of sovereign immunity does not apply to the case since the purpose of selling the lot was not for profit but for the disposal of the lot because the petitioner was not able to utilize the land due to the squatters refusal to vacate. Such act, as per the Courts language, is clothed wit h a governmental character. Since Sec. 2, Art. 2 of our Constitution stipulates that the Philippines adhere to generally accepted principles of International Law, the Court justly granted the Holy See sovereign immunity; thereby, dismissing the civil case filed against it.