THE HOLY SEE VS. THE HON. ERIBERTO U. ROSARIO, JR.

and STARBRIGHT
SALES ENTERPRISES, INC.,
G.R. No. 101949
FACTS:
Petition arose from a controversy over a parcel of land located in Paranaque, Metro
Manila. Land 5-A, registered under the name Holy See, was contiguous to Lot-B and 5-
D under the name of Philippine Realty Corporation (PRC). The land was donated by the
Archdiocese of Manila to the Papal Nuncio, which represents the Holy See, who
exercises sovereignty over the Vatican City in Rome, Italy.
The said lots were sold through Msgr. Domingo A. Cirilios Jr. (Msgr. Cirilios), acting as
agent, to Ramon Licup. He then assigned his rights to respondent Starbright Sales
Enterprises (Starbright). Dispute arose between the two parties when the squatters
refuse to vacate the lots. Both parties were unsure of whose responsibility was it to evict
the squatters. Starbright insists that Holy See should clear the property while
the Holy See says that Starbright should do it or the earnest money* will be returned.
With this, Msgr. Cirilios returned the P100, 000 as earnest money.
Complicating the relations of the parties was the sale made by the petitioner Holy See
of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana).
Starbright filed a suit for annulment of the sale, specific performances, and damages
against Msgr. Cirilios, PRC, and Tropicana before the Makati RTC. The Holy See and
Msgr. Cirilios moved to dismiss the petition for lack of jurisdiction based on sovereign
immunity from suit. RTC denied the motion on the ground that the petitioner already
“shed off” its immunity by entering into business contract.
The subsequent Motion for Reconsideration was also denied hence the special civil
action for certiorari was forwarded to the Supreme Court.
ISSUE: W/N the Holy See can invoke sovereign immunity.
RULING: Yes.
The Supreme Court held that the Holy See may properly invoke sovereign immunity for
its non-suability, as enshrined in Sec. 2 Article II of the 1987 Constitution. It was
expressed we have adopted the generally accepted principles of International Law.
Even without this affirmation, such principles of International Law are deemed
incorporated as part of the law of the land as a condition and consequence of our
admission in the society of nations.
Under Article 31(a) of the Convention, a diplomatic envoy is granted immunity from the
civil and administrative jurisdiction of the receiving state over any real action relating to
private immovable property situated in the territory of the receiving state which the
envoy holds on behalf of the sending state for the purposes of the mission. If this
immunity is provided for a diplomatic envoy, with all the more reason should
immunity be recognized as regards the sovereign itself, which in this case is the Holy
See. The Holy See is immune from suit because the act of selling the lot is non-
proprietary in nature. The same was acquired through a donation from the Archdiocese
of Manila for the construction of the official place of residence of the Papal Nuncio.
In the case at bar, the decision to transfer the property and the subsequent disposal
thereof are likewise clothed with a governmental character. Petitioner did not sell lot 5-A
for profit or gain. It merely wanted to dispose off the same because the squatters living
thereon made it almost impossible for petitioner to use it for the purpose of the donation.
In view of the foregoing, the Court granted the petition for certiorari and the complaints
were dismissed accordingly.

Sanders v. Veridiano – 162 SCRA 88 [1988]

Facts: Petitioner Sanders was the special services director of the U.S. Naval Station.
Petitioner Moreau was the commanding officer of the Subic Naval Base. Private
respondent Rossi is an American citizen with permanent residence in the Philippines.
Private respondent Rossi and Wyer were both employed as game room attendants in
the special services department of the US Naval Station (NAVSTA). On October 3, 1975,
the private respondents were advised that their employment had been converted from
permanent full-time to permanent part-time. They instituted grievance proceedings to
the rules and regulations of the U.S. Department of Defense. The hearing officer
recommended for reinstatement of their permanent full-time status. However, in a letter
addressed to petitioner Moreau, Sanders disagreed with the hearing officer's report. The
letter contained the statements that: a ) "Mr. Rossi tends to alienate most co-workers and
supervisors;" b) "Messrs. Rossi and Wyers have proven, according to their immediate
supervisors, to be difficult employees to supervise;" and c) "even though the grievants
were under oath not to discuss the case with anyone, (they) placed the records in public
places where others not involved in the case could hear."
Before the start of the grievance hearings, a-letter from petitioner Moreau was sent to
the Chief of Naval Personnel explaining the change of the private respondent's
employment status. So, private respondent filed for damages alleging that the letters
contained libelous imputations and that the prejudgment of the grievance proceedings
was an invasion of their personal and proprietary rights. However, petitioners argued that
the acts complained of were performed by them in the discharge of their official duties
and that, consequently, the court had no jurisdiction over them under the doctrine of state
immunity. However, the motion was denied on the main ground that the petitioners had
not presented any evidence that their acts were official in nature.
ISSUE: Whether the doctrine of state immunity is applicable not only to our own
government but also to foreign states
RULING: Yes. There should be no question by now that such complaint cannot prosper
unless the government sought to be held ultimately liable has given its consent to be sued.
So the doctrine of state immunity is applicable not only to our own government but also
to foreign states sought to be subjected to the jurisdiction of our courts.
The practical justification for the doctrine is that "there can be no legal right against
the authority which makes the law on which the right depends. In the case of foreign
states, the rule is derived from the principle of the sovereign equality of states which
wisely admonishes that par in parem non habet imperium and that a contrary attitude
would "unduly vex the peace of nations." Our adherence to this precept is formally
expressed in Article II, Section 2, of our Constitution, where we reiterate from our
previous charters that the Philippines "adopts the generally accepted principles of
international law as part of the law of the land.
Santiago v. Republic – 87 SCRA 294 [1978]
Facts: In January 1971, Ildefonso Santiago gratuitously donated a parcel of land to the Bureau of
Plant Industry. The terms of the donation are; that the Bureau should construct a building on the
said lot and that the building should be finished by December 7, 1974, that the Bureau should
install lighting facilities on the said lot. However, come 1976 there were still no improvements on
the lot. This prompted Santiago to file a case pleading for the revocation of such contract of
donation. The trial court dismissed the petition claiming that it is a suit against the government and
should not prosper without the consent of the government.
Issue: Whether or not the state has not waived its immunity from suit.
Ruling: No. The government has waived its immunity and such waiver is implied by virtue of the
terms provided in the deed of donation. The government is a beneficiary of the terms of the
donation. But the government through the Bureau of Plant Industry has breached the terms of the
deed by not complying with such, therefore, the donor Santiago has the right to have his day in
court and be heard. Further, to not allow the donor to be heard would be unethical and contrary to
equity which the government so advances.
GR. No. L-6060 FERNANDO A. FROILAN vs PAN ORIENTAL SHIPPING CO. and THE
REPUBLIC OF THE PHILIPPINES
Facts: Plaintiff, Fernando Froilan filed a complaint against the defendant-appellant, Pan Oriental
Shipping Co., alleging that he purchased from the Shipping Commission the vessel for P200,000,
paying P50,000 down and agreeing to pay the balance in instalments. To secure the payment of
the balance of the purchase price, he executed a chattel mortgage of said vessel in favor of the
Shipping Commission. For various reasons, among them the non-payment of the installments,
the Shipping Commission tool possession of said vessel and considered the contract of sale
cancelled. The Shipping Commission chartered and delivered said vessel to the defendant-
appellant Pan Oriental Shipping Co. subject to the approval of the President of the Philippines.
Plaintiff appealed the action of the Shipping Commission to the President of the Philippines and,
in its meeting the Cabinet restored him to all his rights under his original contract with the
Shipping Commission. Plaintiff had repeatedly demanded from the Pan Oriental Shipping Co.
the possession of the vessel in question but the latter refused to do so.
Plaintiff, prayed that, upon the approval of the bond accompanying his complaint, a writ of
replevin be issued for the seizure of said vessel with all its equipment and appurtenances, and
that after hearing, he be adjudged to have the rightful possession thereof . The lower court issued
the writ of replevin prayed for by Froilan and by virtue thereof the Pan Oriental Shipping Co.
was divested of its possession of said vessel.
Pan Oriental protested to this restoration of Plaintiff ‘s rights under the contract of sale, for the
reason that when the vessel was delivered to it, the Shipping Administration had authority to
dispose of said authority to the property, Plaintiff having already relinquished whatever rights he
may have thereon. Plaintiff paid the required cash of P10,000.00 and as Pan Oriental refused to
surrender possession of the vessel, he filed an action to recover possession thereof and have him
declared the rightful owner of said property. The Republic of the Philippines was allowed to
intervene in said civil case praying for the possession in order that the chattel mortgage
constituted thereon may be foreclosed.
Issues: Whether or not the Court has jurisdiction over the intervenor with regard to the
counterclaim.
Discussions: When the government enters into a contract, for the State is then deem to have
divested itself of the mantle of sovereign immunity and descended to the level of the ordinary
individual. Having done so, it becomes subject to judicial action and processes.
Rulings: Yes. The Supreme Court held that the government impliedly allowed itself to be sued
when it filed a complaint in intervention for the purpose of asserting claim for affirmative relief
against the plaintiff to the recovery of the vessel. The immunity of the state from suits does not
deprive it of the right to sue private parties in its own courts. The state as plaintiff may avail
itself of the different forms of actions open to private litigants. In short, by taking the initiative in
an action against a private party, the state surrenders its privileged position and comes down to
the level of the defendant. The latter automatically acquires, within certain limits, the right to set
up whatever claims and other defenses he might have against the state.
GR. No. 175299 – REPUBLIC OF THE PHILIPPINES (DPWH) vs ALBERTO DOMINGO
Facts: On April 26, 2002, herein respondent Alberto A. Domingo filed a Complaint for Specific
Performance with Damages against the Department of Public Works and Highways (DPWH) in
the RTC of Malolos, Bulacan, Branch 18. Domingo averred that from April to September 1992,
he entered into seven contracts with the DPWH Region III for the lease of his construction
equipment to said government agency. After the completion of the projects, Domingo claimed that
the unpaid rentals of the DPWH Region III amounted to ₱6,320,163.05. Despite repeated demands,
Domingo asserted that the DPWH Region III failed to pay its obligations. Domingo was, thus,
compelled to file the case for the payment of the ₱6,320,163.05 balance plus damages.
The RTC decided in favour of Domingo ordering DPWH Region III to pay their obligation
including interest and other fees.
On 27 August 2003, the Republic of the Philippines represented by the Office of the
Solicitor General filed with the CA a Petition to annul the RTC Judgment arguing that it was not
impleaded as an indispensable party. Since the DPWH was a representative of the government, the
Solicitor General or the Legal Service Branch of the Executive Department should have been
summoned. Absent that, the trial court never acquired jurisdiction rendering it’s decision null and
void. The CA was not persuaded and it dismissed the Petition including the MR.
Issue: W/N the CA correctly dismissed the Petition for Annulment of Judgment filed by the
Republic
Held: The CA was not correct. It is the duty of the plaintiff to implead all the necessary or
indispensable parties for the complete determination of the action. The DPWH and its regional
office are merely agents of the Republic, which is the real party in interest.
 The SC cited Section 13, Rule 14 of the Rules of Court, mandating that the summons in
this case should have been served on the OSG. As Domingo failed to discharge this burden, he
cannot now be allowed to shift the blame on the government agencies.

In sum, the Court holds that the Republic was not validly served with summons in Civil
Case No. 333-M-2002. Hence, the RTC failed to acquire jurisdiction over the person of the
Republic. Consequently, the proceedings held before the trial court and its Decision dated
February 18, 2003 are hereby declared void.

G.R. No. L-5122 91 Phil 203 April 30, 1952

NATIONAL AIRPORTS CORPORATION vs. JOSE TEODORO, SR. and PHILIPPINE
AIRLINES, INC.
Facts: The National Airports Corporation was organized under Republic Act No. 224, which
expressly made the provisions of the Corporation Law applicable to the said corporation. It was
abolished by Executive Order No. 365 and to take its place the Civil Aeronautics Administration
was created.
Before the abolition, the Philippine Airlines, Inc. paid to the National Airports Corporation
P65,245 as fees for landing and parking for the period up to and including July 31, 1948. These
fees are said to have been due and payable to the Capitol Subdivision, Inc., who owned the land
used by the National Airports Corporation as airport. The owner commenced an action in the court
against the Philippine Airlines, Inc.
The Philippine Airlines, Inc. countered with a third-party complaint against the National Airports
Corporation, which by that time had been dissolved, and served summons on the Civil Aeronautics
Administration. The third party plaintiff alleged that it had paid to the National Airports
Corporation the fees claimed by the Capitol Subdivision, Inc. “on the belief and assumption that
the third party defendant was the lessee of the lands subject of the complaint and that the third
party defendant and its predecessors in interest were the operators and maintainers of said airport
and, further, that the third party defendant would pay to the landowners, particularly the Capitol
Subdivision, Inc., the reasonable rentals for the use of their lands.”
The Solicitor General, after answering the third party complaint, filed a motion to dismiss on the
ground that the court lacks jurisdiction to entertain the third- party complaint, first, because the
National Airports Corporation “has lost its juridical personality,” and, second, because agency of
the Republic of the Philippines, unincorporated and not possessing juridical personality under the
law, is incapable of suing and being sued
Issues: Whether or not the Civil Aeronautics Administration should be regarded as engaged in
private functions and therefore subject to suit.
Discussions: Not all government entities, whether corporate or non-corporate, are immune from
suits. The power to sue and be sued is implied from the power to transact private business. And if
it has the power to sue and be sued on its behalf, the Civil Aeronautics Administration with greater
reason should have the power to prosecute and defend suits for and against the National Airports
Corporation, having acquired all the properties, funds and chose in action and assumed all the
liabilities of the latter. The rule is thus stated in Corpus Juris:
Suits against state agencies with relation to matters in which they have assumed to act in private
or nongovernment capacity, and various suits against certain corporations created by the state for
public purposes, but to engage in matters partaking more of the nature of ordinary business rather
than functions of a governmental or political character, are not regarded as suits against the state.
The Latter is true, although the state may own stock or property of such a corporation for by
engaging in business operations through a corporation the state divests itself so far of its sovereign
character, and by implication consents to suits against the corporation.
Rulings: Yes. The Supreme Court ruled that the Civil Aeronautics Administration comes under
the category of a private entity. Although not a body corporate it was created, like the National
Airports Corporation, not to maintain a necessary function of government, but to run what is
essentially a business, even if revenues be not its prime objective but rather the promotion of travel
and the convenience of the traveling public. It is engaged in an enterprise which, far from being
the exclusive prerogative of state, may, more than the construction of public roads, be undertaken
by private concerns.

In the light of a well-established precedents, and as a matter of simple justice to the parties who
dealt with the National Airports Corporation on the faith of equality in the enforcement of their
mutual commitments, the Civil Aeronautics Administration may not, and should not, claim for
itself the privileges and immunities of the sovereign state.
85 SCRA 599 TORIO VS FONTANILLA
Facts: On October 21, 1978, the municipal council of Malasiqui, Pangasinan passed 2 resolutions:
one for management of the town fiesta celebration and the other for the creation of the Malasiqui
Town Fiesta Executive Committee. The Executive Committee, in turn, organized a sub-committee
on entertainment and stage with Jose Macaraeg as Chairman. The council appropriated the amount
of P100.00 for the construction of 2 stages, one for the "zarzuela" and another for the cancionan.
While the zarzuela was being held, the stage collapsed. Vicente Fontanilla was pinned underneath
and died in the afternoon of the following day. Fontanilla’s heirs filed a complaint for damages
with the CFI of Manila. The defendants were the municipality, the municipal council and the
municipal council members.
In its Answer, defendant municipality argued that as a legally and duly organized public
corporation it performs sovereign functions and the holding of a town fiesta was an exercise of its
governmental functions from which no liability can arise to answer for the negligence of any of its
agents. The defendant councilors, in turn, maintained that they merely acted as agents of the
municipality in carrying out the municipal ordinance providing for the management of the town
fiesta celebration and as such they are likewise not liable for damages as the undertaking was not
one for profit; furthermore, they had exercised due care and diligence in implementing the
municipal ordinance. CFI held that the municipal council exercised due diligence in selecting the
person to construct the stage and dismissed the complaint. CA reversed the decision and held all
defendants solidarily liable for damages.
Issues: 1. Is the celebration of a town fiesta authorized by a municipal council a governmental or
a corporate function of the municipality?

2. Is the municipality liable for the death of Fontanilla?

3. Are the municipal councilors who enacted the ordinance and created the fiesta committee liable
for the death of Fontanilla?

Held:
1. The holding of the town fiesta in 1959 by the municipality of Malasiqui Pangasinan was an
exercise of a private or proprietary function of the municipality.

Section 2282 of the Chatter on Municipal Law of the Revised Administrative Code simply gives
authority to the municipality to celebrate a yearly fiesta but it does not impose upon it a duty to
observe one. Holding a fiesta even if the purpose is to commemorate a religious or historical event
of the town is in essence an act for the special benefit of the community and not for the general
welfare of the public performed in pursuance of a policy of the state. No governmental or public
policy of the state is involved in the celebration of a town fiesta.

2. Under the doctrine of respondent superior, petitioner - Municipality is liable for damages for
the death of Vicente Fontanilla because the accident was attributable to the negligence of its agent
acting within his assigned task.
Art. 2176, Civil Code: Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. . .
Art. 2180, Civil Code: The obligation imposed by article 2176 is demandable not only for one's own acts
or omission, but also for those of persons for whom one is responsible.

3. The celebration of a town fiesta by the Municipality of Malasiqui was not a governmental
function. The legal consequence thereof is that the Municipality stands on the same footing as
an ordinary private corporation with the municipal council acting as its board of directors. The
records do not show that municipal councilors directly participated in the defective construction
of the "zarzuela" stage or that they personally permitted spectators to go up the platform. Thus,
they are absolved from liability.

GSIS v. Group Management Corporation, G.R. No. 167000, June 8, 2011