G.R. No.

101949 December 1, 1994

THE HOLY SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the RTC of Makati, Branch 61
and STARBRIGHT SALES ENTERPRISES, INC., respondents.

FACTS:

Petition arose from a controversy over a three parcels of land. 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, Rome, Italy, for his residence.

Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents Starbright
Sales Enterprises, Inc. When the squatters refuse to vacate the lots, a dispute arose between the two
parties because both were unsure whose responsibility was it to evict the squatters from said lots.

Respondent Starbright Sales Enterprises Inc. insists that Holy See should clear the property while Holy
See says that respondent corporation should do it or the earnest money will be returned. With this, Msgr.
Cirilos, the agent, subsequently returned the P100,000 earnest money.

The same lots were then sold to Tropicana Properties and Development Corporation. Starbright Sales
Enterprises, Inc. filed a suit for annulment of the sale, specific performance and damages against Msgr.
Cirilios, PRC as well as Tropicana Properties and Development Corporation.

Petitioner answered, saying that the complaint should be dismissed for lack of jurisdiction based on
sovereign immunity from suit. Respondent contended that the petitioner “shed off [its] sovereign
immunity by entering into the business contract in question.”

ISSUE:

Whether the Holy See properly invoke sovereign immunity for its non-suability?

RULE:

According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard
to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis.

If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must
then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is
an act jure imperii, especially when it is not undertaken for gain or
profit.

APPLICATION:

Yes, Holy See may invoke immunity from suit in the case at hand.

The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in nature
(jure imperii act). The lot was acquired through a donation from the Archdiocese of Manila, not for a
commercial purpose, but for the use of petitioner to construct the official place of residence of the Papal
Nuncio thereof. The transfer of the property and its subsequent disposal are likewise clothed with a
governmental (non-proprietal) character as petitioner sold the lot not for profit or gain rather because it
merely cannot evict the squatters living in said property.

CONCLUSION: Petition granted.