The Holy See vs Rosario

The Holy See vs. Rosario Facts: Msgr. Cirilos Jr., on behalf of the petitioner and the PRC agreed to sell 3parcels of land to Ramon Licup. A condition was agreed upon by the partieswhereby an earnest money shall be paid by Licup and the sellers shall clear thesaid lots of squatters. Licup assigned his rights to Starbright Enterprises. Theprivate respondent demanded the undertaking but due to the refusal of thesquatters to vacate the land, Cirilos proposed that the private respondent shallbe the one to undertake the eviction or he shall return the earnest money.Private respondent counterproposed that it would undertake the eviction but theprice of the land shall be decreased. Consequently, the earnest money wasreturned. Thereafter, without the notice to the private respondent, the petitionerand PRC sold the lots to Tropicana. Private respondent filed a complaint againstthe petitioner but the latter moved to dismiss the complaint alleging that there islack of jurisdiction based on sovereign immunity from suit. But the privaterespondent argued that by entering into a business contract, the Holy See shedoff its sovereign immunity. The DFA filed for an intervention on behalf of the HolySee. Issue:1. Whether or not the Holy See can invoke the doctrine of immunity 2. Whether or not the Holy See entered into a commercial transaction Held: 1. The Republic of the Philippines has accorded the Holy See the status of aforeign sovereign. Through the Papal Nuncio, its Ambassador, it has haddiplomatic representation in the Philippines since 1957. Moreover, the DFA hasalready certified the Embassy of the Holy See as a diplomatic mission to theRepublic of the Philippines, exempt from local jurisdiction and entitled to all therights, privileges and immunities of a diplomatic mission in the country. Hence,the executive branch has already recognized and affirmed the status of the HolySee. As such, it shall be recognized by the courts so as not to embarrass theexecutive arm of the government in conducting foreign relations. 2.The Court has distinguished the transactions by a state with privateparties as jure imperii and jure gestionis. Jure imperii has been defined as publicacts of the government or the exercise of the sovereign activity thereof, while jure gestionis are those private acts that are usually proprietary and commercial in nature.A state impliedly waves its immunity upon entering into contracts that are commercial or propeitary in nature. However, mere entering into a contractby a foreign state with a private party cannot be the ultimate test of itproprietary functions. In the case at bar, the Holy See did not buy and sell the lotin the ordinary course of business. In fact, a part of the land, specifically Lot 5-A,was a donation from the Archdiocese of Manila, not for commercial purpose but for the residence of the Papal Nuncio. The sale of Lot 5-A was not entered into forprofit or gain. It merely wanted to dispose off the same because it is impossible for the petitioner to use is for the purpose of donation due to the refusal of thesquatters living on the said parcel of land to vacate it. Hence, the decision totransfer the property and the subsequent disposal are clothed with agovernmental character. The petition was granted and the civil case against itwas dismissed.