Case Digest: The Holy See principles of International Law.

same because the squatters living

vs. Rosario, Jr. Even without this affirmation, such thereon made it almost impossible
principles of International Law are for petitioner to use it for the
G.R. No. 101949 01 deemed incorporated as part of the purpose of the donation.
December 1994 law of the land as a condition and
consequence of our admission in
the society of nations. In the G.R. No. 101949 December 1,
FACTS: present case, if petitioner has 1994
bought and sold lands in the
This petition arose from a ordinary course of real estate THE HOLY SEE, petitioner,
controversy over a parcel of land business, surely the said vs.
consisting of 6,000 square meters transaction can be categorized as THE HON. ERIBERTO U.
located in the Municipality of an act jure gestionis. However, ROSARIO, JR., as Presiding
Paranaque. Said lot was petitioner has denied that the Judge of the Regional Trial
contiguous with two other lots. acquisition and subsequent Court of Makati, Branch 61 and
These lots were sold to Ramon disposal of the lot were made for STARBRIGHT SALES
Licup. In view of the refusal of the profit but claimed that it acquired ENTERPRISES, INC., respondents.
squatters to vacate the lots sold, a said property for the site of its
dispute arose as to who of the mission or the Apostolic Nunciature Padilla Law Office for petitioner.
parties has the responsibility of in the Philippines.
evicting and clearing the land of Siguion Reyna, Montecillo &
squatters. Complicating the The Holy See is immune from suit Ongsiako for private respondent.
relations of the parties was the sale for the act of selling the lot of
by petitioner of the lot of concern concern is non-proprietary in
to Tropicana. nature. The lot was acquired by
petitioner as a donation from the QUIASON, J.:
ISSUE: Archdiocese of Manila. The
donation was made not for This is a petition for certiorari
Whether the Holy See is immune commercial purpose, but for the under Rule 65 of the Revised Rules
from suit insofar as its business use of petitioner to construct of Court to reverse and set aside
relations regarding selling a lot to a thereon the official place of the Orders dated June 20, 1991
private entity residence of the Papal Nuncio. The and September 19, 1991 of the
decision to transfer the property Regional Trial Court, Branch 61,
RULING: and the subsequent disposal Makati, Metro Manila in Civil Case
thereof are likewise clothed with a No. 90-183.
As expressed in Section 2 of Article governmental character. Petitioner
II of the 1987 Constitution, we have did not sell the lot for profit or gain. The Order dated June 20, 1991
adopted the generally accepted It merely wanted to dispose of the denied the motion of petitioner to
dismiss the complaint in Civil Case rights to the sale to private the condition that earnest money
No. 90-183, while the Order dated respondent. of P100,000.00 be paid by Licup to
September 19, 1991 denied the the sellers, and that the sellers
motion for reconsideration of the In view of the refusal of the clear the said lots of squatters who
June 20,1991 Order. squatters to vacate the lots sold to were then occupying the same; (3)
private respondent, a dispute arose Licup paid the earnest money to
Petitioner is the Holy See who as to who of the parties has the Msgr. Cirilos; (4) in the same
exercises sovereignty over the responsibility of evicting and month, Licup assigned his rights
Vatican City in Rome, Italy, and is clearing the land of squatters. over the property to private
represented in the Philippines by Complicating the relations of the respondent and informed the
the Papal Nuncio. parties was the sale by petitioner sellers of the said assignment; (5)
of Lot 5-A to Tropicana Properties thereafter, private respondent
Private respondent, Starbright and Development Corporation demanded from Msgr. Cirilos that
Sales Enterprises, Inc., is a (Tropicana). the sellers fulfill their undertaking
domestic corporation engaged in and clear the property of squatters;
the real estate business. I however, Msgr. Cirilos informed
private respondent of the
This petition arose from a On January 23, 1990, private squatters' refusal to vacate the
controversy over a parcel of land respondent filed a complaint with lots, proposing instead either that
consisting of 6,000 square meters the Regional Trial Court, Branch 61, private respondent undertake the
(Lot 5-A, Transfer Certificate of Makati, Metro Manila for annulment eviction or that the earnest money
Title No. 390440) located in the of the sale of the three parcels of be returned to the latter; (6)
Municipality of Parañaque, Metro land, and specific performance and private respondent
Manila and registered in the name damages against petitioner, counterproposed that if it would
of petitioner. represented by the Papal Nuncio, undertake the eviction of the
and three other defendants: squatters, the purchase price of the
Said Lot 5-A is contiguous to Lots namely, Msgr. Domingo A. Cirilos, lots should be reduced from
5-B and 5-D which are covered by Jr., the PRC and Tropicana (Civil P1,240.00 to P1,150.00 per square
Transfer Certificates of Title Nos. Case No. meter; (7) Msgr. Cirilos returned
271108 and 265388 respectively 90-183). the earnest money of P100,000.00
and registered in the name of the and wrote private respondent
Philippine Realty Corporation The complaint alleged that: (1) on giving it seven days from receipt of
(PRC). April 17, 1988, Msgr. Cirilos, Jr., on the letter to pay the original
behalf of petitioner and the PRC, purchase price in cash; (8) private
The three lots were sold to Ramon agreed to sell to Ramon Licup Lots respondent sent the earnest
Licup, through Msgr. Domingo A. 5-A, 5-B and 5-D at the price of money back to the sellers, but later
Cirilos, Jr., acting as agent to the P1,240.00 per square meters; (2) discovered that on March 30, 1989,
sellers. Later, Licup assigned his the agreement to sell was made on petitioner and the PRC, without
notice to private respondent, sold for lack of jurisdiction based on Petitioner forthwith elevated the
the lots to Tropicana, as evidenced sovereign immunity from suit, and matter to us. In its petition,
by two separate Deeds of Sale, one Msgr. Cirilos for being an improper petitioner invokes the privilege of
over Lot 5-A, and another over Lots party. An opposition to the motion sovereign immunity only on its own
5-B and 5-D; and that the sellers' was filed by private respondent. behalf and on behalf of its official
transfer certificate of title over the representative, the Papal Nuncio.
lots were cancelled, transferred On June 20, 1991, the trial court
and registered in the name of issued an order denying, among On December 9, 1991, a Motion for
Tropicana; (9) Tropicana induced others, petitioner's motion to Intervention was filed before us by
petitioner and the PRC to sell the dismiss after finding that petitioner the Department of Foreign Affairs,
lots to it and thus enriched itself at "shed off [its] sovereign immunity claiming that it has a legal interest
the expense of private respondent; by entering into the business in the outcome of the case as
(10) private respondent demanded contract in question" (Rollo, pp. 20- regards the diplomatic immunity of
the rescission of the sale to 21). petitioner, and that it "adopts by
Tropicana and the reconveyance of reference, the allegations
the lots, to no avail; and (11) On July 12, 1991, petitioner moved contained in the petition of the
private respondent is willing and for reconsideration of the order. On Holy See insofar as they refer to
able to comply with the terms of August 30, 1991, petitioner filed a arguments relative to its claim of
the contract to sell and has actually "Motion for a Hearing for the Sole sovereign immunity from suit"
made plans to develop the lots into Purpose of Establishing Factual (Rollo, p. 87).
a townhouse project, but in view of Allegation for claim of Immunity as
the sellers' breach, it lost profits of a Jurisdictional Defense." So as to Private respondent opposed the
not less than P30,000.000.00. facilitate the determination of its intervention of the Department of
defense of sovereign immunity, Foreign Affairs. In compliance with
Private respondent thus prayed for: petitioner prayed that a hearing be the resolution of this Court, both
(1) the annulment of the Deeds of conducted to allow it to establish parties and the Department of
Sale between petitioner and the certain facts upon which the said Foreign Affairs submitted their
PRC on the one hand, and defense is based. Private respective memoranda.
Tropicana on the other; (2) the respondent opposed this motion as
reconveyance of the lots in well as the motion for II
question; (3) specific performance reconsideration.
of the agreement to sell between it A preliminary matter to be
and the owners of the lots; and (4) On October 1, 1991, the trial court threshed out is the procedural
damages. issued an order deferring the issue of whether the petition for
resolution on the motion for certiorari under Rule 65 of the
On June 8, 1990, petitioner and reconsideration until after trial on Revised Rules of Court can be
Msgr. Cirilos separately moved to the merits and directing petitioner availed of to question the order
dismiss the complaint — petitioner to file its answer (Rollo, p. 22). denying petitioner's motion to
dismiss. The general rule is that an "suggestion," where the foreign that the respondent-employer
order denying a motion to dismiss state or the international could not be sued because it
is not reviewable by the appellate organization sued in an American enjoyed diplomatic immunity. In
courts, the remedy of the movant court requests the Secretary of World Health Organization v.
being to file his answer and to State to make a determination as Aquino, 48 SCRA 242 (1972), the
proceed with the hearing before to whether it is entitled to Secretary of Foreign Affairs sent
the trial court. But the general rule immunity. If the Secretary of State the trial court a telegram to that
admits of exceptions, and one of finds that the defendant is immune effect. In Baer v. Tizon, 57 SCRA 1
these is when it is very clear in the from suit, he, in turn, asks the (1974), the U.S. Embassy asked the
records that the trial court has no Attorney General to submit to the Secretary of Foreign Affairs to
alternative but to dismiss the court a "suggestion" that the request the Solicitor General to
complaint (Philippine National Bank defendant is entitled to immunity. make, in behalf of the Commander
v. Florendo, 206 SCRA 582 [1992]; In England, a similar procedure is of the United States Naval Base at
Zagada v. Civil Service followed, only the Foreign Office Olongapo City, Zambales, a
Commission, 216 SCRA 114 [1992]. issues a certification to that effect "suggestion" to respondent Judge.
In such a case, it would be a sheer instead of submitting a The Solicitor General embodied the
waste of time and energy to "suggestion" (O'Connell, I "suggestion" in a Manifestation and
require the parties to undergo the International Law 130 [1965]; Note: Memorandum as amicus curiae.
rigors of a trial. Immunity from Suit of Foreign
Sovereign Instrumentalities and In the case at bench, the
The other procedural question Obligations, 50 Yale Law Journal Department of Foreign Affairs,
raised by private respondent is the 1088 [1941]). through the Office of Legal Affairs
personality or legal interest of the moved with this Court to be
Department of Foreign Affairs to In the Philippines, the practice is allowed to intervene on the side of
intervene in the case in behalf of for the foreign government or the petitioner. The Court allowed the
the Holy See (Rollo, pp. 186-190). international organization to first said Department to file its
secure an executive endorsement memorandum in support of
In Public International Law, when a of its claim of sovereign or petitioner's claim of sovereign
state or international agency diplomatic immunity. But how the immunity.
wishes to plead sovereign or Philippine Foreign Office conveys
diplomatic immunity in a foreign its endorsement to the courts In some cases, the defense of
court, it requests the Foreign Office varies. In International Catholic sovereign immunity was submitted
of the state where it is sued to Migration Commission v. Calleja, directly to the local courts by the
convey to the court that said 190 SCRA 130 (1990), the respondents through their private
defendant is entitled to immunity. Secretary of Foreign Affairs just counsels (Raquiza v. Bradford, 75
sent a letter directly to the Phil. 50 [1945]; Miquiabas v.
In the United States, the procedure Secretary of Labor and Philippine-Ryukyus Command, 80
followed is the process of Employment, informing the latter Phil. 262 [1948]; United States of
America v. Guinto, 182 SCRA 644 limitation of the territory under the suggested that the treaty created
[1990] and companion cases). In Holy See to an area of 108.7 acres, two international persons — the
cases where the foreign states the position of the Holy See in Holy See and Vatican City (Salonga
bypass the Foreign Office, the International Law became and Yap, supra, 37).
courts can inquire into the facts controversial (Salonga and Yap,
and make their own determination Public International Law 36-37 The Vatican City fits into none of
as to the nature of the acts and [1992]). the established categories of
transactions involved. states, and the attribution to it of
In 1929, Italy and the Holy See "sovereignty" must be made in a
III entered into the Lateran Treaty, sense different from that in which it
where Italy recognized the is applied to other states (Fenwick,
The burden of the petition is that exclusive dominion and sovereign International Law 124-125 [1948];
respondent trial court has no jurisdiction of the Holy See over the Cruz, International Law 37 [1991]).
jurisdiction over petitioner, being a Vatican City. It also recognized the In a community of national states,
foreign state enjoying sovereign right of the Holy See to receive the Vatican City represents an
immunity. On the other hand, foreign diplomats, to send its own entity organized not for political
private respondent insists that the diplomats to foreign countries, and but for ecclesiastical purposes and
doctrine of non-suability is not to enter into treaties according to international objects. Despite its
anymore absolute and that International Law (Garcia, size and object, the Vatican City
petitioner has divested itself of Questions and Problems In has an independent government of
such a cloak when, of its own free International Law, Public and its own, with the Pope, who is also
will, it entered into a commercial Private 81 [1948]). head of the Roman Catholic
transaction for the sale of a parcel Church, as the Holy See or Head of
of land located in the Philippines. The Lateran Treaty established the State, in conformity with its
statehood of the Vatican City "for traditions, and the demands of its
A. The Holy See the purpose of assuring to the Holy mission in the world. Indeed, the
See absolute and visible world-wide interests and activities
Before we determine the issue of independence and of guaranteeing of the Vatican City are such as to
petitioner's non-suability, a brief to it indisputable sovereignty also make it in a sense an "international
look into its status as a sovereign in the field of international state" (Fenwick, supra., 125;
state is in order. relations" (O'Connell, I International Kelsen, Principles of International
Law 311 [1965]). Law 160 [1956]).
Before the annexation of the Papal
States by Italy in 1870, the Pope In view of the wordings of the One authority wrote that the
was the monarch and he, as the Lateran Treaty, it is difficult to recognition of the Vatican City as a
Holy See, was considered a subject determine whether the statehood state has significant implication —
of International Law. With the loss is vested in the Holy See or in the that it is possible for any entity
of the Papal States and the Vatican City. Some writers even pursuing objects essentially
different from those pursued by the society of nations (United course of conduct or particular
states to be invested with States of America v. Guinto, 182 transaction or act, rather than by
international personality (Kunz, The SCRA 644 [1990]). reference to its purpose." The
Status of the Holy See in Canadian Parliament enacted in
International Law, 46 The American There are two conflicting concepts 1982 an Act to Provide For State
Journal of International Law 308 of sovereign immunity, each widely Immunity in Canadian Courts. The
[1952]). held and firmly established. Act defines a "commercial activity"
According to the classical or as any particular transaction, act or
Inasmuch as the Pope prefers to absolute theory, a sovereign conduct or any regular course of
conduct foreign relations and enter cannot, without its consent, be conduct that by reason of its
into transactions as the Holy See made a respondent in the courts of nature, is of a "commercial
and not in the name of the Vatican another sovereign. According to character."
City, one can conclude that in the the newer or restrictive theory, the
Pope's own view, it is the Holy See immunity of the sovereign is The restrictive theory, which is
that is the international person. recognized only with regard to intended to be a solution to the
public acts or acts jure imperii of a host of problems involving the
The Republic of the Philippines has state, but not with regard to issue of sovereign immunity, has
accorded the Holy See the status of private acts or acts jure gestionis created problems of its own. Legal
a foreign sovereign. The Holy See, (United States of America v. Ruiz, treatises and the decisions in
through its Ambassador, the Papal 136 SCRA 487 [1987]; Coquia and countries which follow the
Nuncio, has had diplomatic Defensor-Santiago, Public restrictive theory have difficulty in
representations with the Philippine International Law 194 [1984]). characterizing whether a contract
government since 1957 (Rollo, p. of a sovereign state with a private
87). This appears to be the Some states passed legislation to party is an act jure gestionis or an
universal practice in international serve as guidelines for the act jure imperii.
relations. executive or judicial determination
when an act may be considered as The restrictive theory came about
B. Sovereign Immunity jure gestionis. The United States because of the entry of sovereign
passed the Foreign Sovereign states into purely commercial
As expressed in Section 2 of Article Immunities Act of 1976, which activities remotely connected with
II of the 1987 Constitution, we have defines a commercial activity as the discharge of governmental
adopted the generally accepted "either a regular course of functions. This is particularly true
principles of International Law. commercial conduct or a particular with respect to the Communist
Even without this affirmation, such commercial transaction or act." states which took control of
principles of International Law are Furthermore, the law declared that nationalized business activities and
deemed incorporated as part of the the "commercial character of the international trading.
law of the land as a condition and activity shall be determined by
consequence of our admission in reference to the nature of the
This Court has considered the governmental activity. By entering There is no question that
following transactions by a foreign into the employment contract with the United States of
America, like any other
state with private parties as acts the cook in the discharge of its state, will be deemed to
jure imperii: (1) the lease by a proprietary function, the United have impliedly waived its
foreign government of apartment States government impliedly non-suability if it has
buildings for use of its military divested itself of its sovereign entered into a contract in its
officers (Syquia v. Lopez, 84 Phil. immunity from suit. proprietary or private
capacity. It is only when the
312 [1949]; (2) the conduct of contract involves its
public bidding for the repair of a In the absence of legislation sovereign or governmental
wharf at a United States Naval defining what activities and capacity that no such
Station (United States of America v. transactions shall be considered waiver may be implied.
Ruiz, supra.); and (3) the change of "commercial" and as constituting
employment status of base acts jure gestionis, we have to In the case at bench, if petitioner
employees (Sanders v. Veridiano, come out with our own guidelines, has bought and sold lands in the
162 SCRA 88 [1988]). tentative they may be. ordinary course of a real estate
business, surely the said
On the other hand, this Court has Certainly, the mere entering into a transaction can be categorized as
considered the following contract by a foreign state with a an act jure gestionis. However,
transactions by a foreign state with private party cannot be the petitioner has denied that the
private parties as acts jure ultimate test. Such an act can only acquisition and subsequent
gestionis: (1) the hiring of a cook in be the start of the inquiry. The disposal of Lot 5-A were made for
the recreation center, consisting of logical question is whether the profit but claimed that it acquired
three restaurants, a cafeteria, a foreign state is engaged in the said property for the site of its
bakery, a store, and a coffee and activity in the regular course of mission or the Apostolic Nunciature
pastry shop at the John Hay Air business. If the foreign state is not in the Philippines. Private
Station in Baguio City, to cater to engaged regularly in a business or respondent failed to dispute said
American servicemen and the trade, the particular act or claim.
general public (United States of transaction must then be tested by
America v. Rodrigo, 182 SCRA 644 its nature. If the act is in pursuit of Lot 5-A was acquired by petitioner
[1990]); and (2) the bidding for the a sovereign activity, or an incident as a donation from the Archdiocese
operation of barber shops in Clark thereof, then it is an act jure of Manila. The donation was made
Air Base in Angeles City (United imperii, especially when it is not not for commercial purpose, but for
States of America v. Guinto, 182 undertaken for gain or profit. the use of petitioner to construct
SCRA 644 [1990]). The operation of thereon the official place of
the restaurants and other facilities As held in United States of America residence of the Papal Nuncio. The
open to the general public is v. Guinto, (supra): right of a foreign sovereign to
undoubtedly for profit as a acquire property, real or personal,
commercial and not a in a receiving state, necessary for
the creation and maintenance of its are still occupying the lot, and that (International Catholic Migration
diplomatic mission, is recognized in they stubbornly refuse to leave the Commission v. Calleja, 190 SCRA
the 1961 Vienna Convention on premises, has been admitted by 130 [1990]). Where the plea of
Diplomatic Relations (Arts. 20-22). private respondent in its complaint immunity is recognized and
This treaty was concurred in by the (Rollo, pp. 26, 27). affirmed by the executive branch,
Philippine Senate and entered into it is the duty of the courts to accept
force in the Philippines on The issue of petitioner's non- this claim so as not to embarrass
November 15, 1965. suability can be determined by the the executive arm of the
trial court without going to trial in government in conducting the
In Article 31(a) of the Convention, a the light of the pleadings, country's foreign relations (World
diplomatic envoy is granted particularly the admission of Health Organization v. Aquino, 48
immunity from the civil and private respondent. Besides, the SCRA 242 [1972]). As in
administrative jurisdiction of the privilege of sovereign immunity in International Catholic Migration
receiving state over any real action this case was sufficiently Commission and in World Health
relating to private immovable established by the Memorandum Organization, we abide by the
property situated in the territory of and Certification of the Department certification of the Department of
the receiving state which the envoy of Foreign Affairs. As the Foreign Affairs.
holds on behalf of the sending department tasked with the
state for the purposes of the conduct of the Philippines' foreign Ordinarily, the procedure would be
mission. If this immunity is relations (Administrative Code of to remand the case and order the
provided for a diplomatic envoy, 1987, Book IV, Title I, Sec. 3), the trial court to conduct a hearing to
with all the more reason should Department of Foreign Affairs has establish the facts alleged by
immunity be recognized as regards formally intervened in this case petitioner in its motion. In view of
the sovereign itself, which in this and officially certified that the said certification, such procedure
case is the Holy See. Embassy of the Holy See is a duly would however be pointless and
accredited diplomatic mission to unduly circuitous (Ortigas & Co.
The decision to transfer the the Republic of the Philippines Ltd. Partnership v. Judge Tirso
property and the subsequent exempt from local jurisdiction and Velasco, G.R. No. 109645, July 25,
disposal thereof are likewise entitled to all the rights, privileges 1994).
clothed with a governmental and immunities of a diplomatic
character. Petitioner did not sell Lot mission or embassy in this country IV
5-A for profit or gain. It merely (Rollo, pp. 156-157). The
wanted to dispose off the same determination of the executive arm Private respondent is not left
because the squatters living of government that a state or without any legal remedy for the
thereon made it almost impossible instrumentality is entitled to redress of its grievances. Under
for petitioner to use it for the sovereign or diplomatic immunity both Public International Law and
purpose of the donation. The fact is a political question that is Transnational Law, a person who
that squatters have occupied and conclusive upon the courts feels aggrieved by the acts of a
foreign sovereign can ask his own respect for the rules of
government to espouse his cause international law (The
Mavrommatis Palestine
through diplomatic channels. Concessions, 1 Hudson,
World Court Reports 293,
Private respondent can ask the 302 [1924]).
Philippine government, through the
Foreign Office, to espouse its WHEREFORE, the petition for
claims against the Holy See. Its certiorari is GRANTED and the
first task is to persuade the complaint in Civil Case No. 90-183
Philippine government to take up against petitioner is DISMISSED.
with the Holy See the validity of its
claims. Of course, the Foreign SO ORDERED.
Office shall first make a
determination of the impact of its
espousal on the relations between
the Philippine government and the
Holy See (Young, Remedies of
Private Claimants Against Foreign
States, Selected Readings on
Protection by Law of Private
Foreign Investments 905, 919
[1964]). Once the Philippine
government decides to espouse
the claim, the latter ceases to be a
private cause.

According to the Permanent Court

of International Justice, the
forerunner of the International
Court of Justice:

By taking up the case of one

of its subjects and by
reporting to diplomatic
action or international
judicial proceedings on his
behalf, a State is in reality
asserting its own rights —
its right to ensure, in the
person of its subjects,