The Holy See vs Rosario Jr, RTC and Starbright Sales Enterprise.

Facts:

Three lots were agreed to be sold by HOLY SEE, through Msgr. Cirilos, Jr, to Ramon Licup, who
assigned his rights to the sale to Starbright Sales Enterprise (SSE). Upon agreement, P100,000.00
was paid by Licup to clear the lots of occupying squatters. However, due to the refusal of the
squatters to vacate the land, Msgr. Cirilos proposed instead that private respondent would
undertake the eviction and the P100,000.00 be returned. SSE counterproposed that should they
undertake the eviction, the price of the land must be reduced from P1,240.00 to P1,150.00. The
P100k was returned, however, it was later discovered that Holy See and Philippine Realty Corp.
(PRC), without notice to respondents SSE, sold the lots to Tropicana.

Respondent SSE sought the annulment of the Deeds of Sale between Holy See and PRC,
reconveyance of the lots, specific performance of the sale to SSE, and damages with the RTC.

Petitioner moved to dismiss the complaint but was denied finding that the latter’s sovereign
immunity was shed off by entering into the business contract.

Issue:

Whether or not the acts of The Holy See are subject to immunity from suit?

Ruling:

Yes. The issue is resolved by determining whether the acts by petitioner are public acts or acts
jure imperii of a state or private acts or acts jure gestionis.

Immunity of the sovereign is recognized only with regard to public acts but not with regard to
private acts. Being so, the logical question is whether the foreign state is engaged in the activity
in the regular course of business. But since the foreign state is not engaged regularly in a
business or trade, the particular act or transaction must then be tested by its nature.

The act is in pursuit of a sovereign activity, or an incident thereof, therefore it is an act jure
imperii especially when it is not undertaken for gain or profit. If petitioner has bought and sold
lands in the ordinary course of a real estate business, surely the said transaction can be
categorized as an act jure gestionis. However, petitioner claimed that it acquired the property
for the site of its Apostolic Nunciature in the Philippines, and not for profit.

The lot was acquired as a donation from the Archdiocese of Manila. The donation was made not
for commercial purpose, but for the use of petitioner to construct thereon the official place of
residence of the Papal Nuncio. Petitioner did not see the lot for profit nor gain. It merely
wanted to dispose of the same because the squatters living thereon made it almost impossible
for petitioner to use it for the purpose of donation. The fact that squatters have occupied and
are still occupying the lot, and that they stubbornly refuse to leave the premises, has been
admitted by private respondent.

The SC therefore, finding the act was a public act, or acts jure imperii, granted the petition
dismissing the case on the ground of immunity.