Case Summary (G.R. No. 101949)
Trial Court Proceedings
Starbright filed for annulment of the Holy See’s sale to Tropicana, specific performance of its own contract, and damages (lost profits ≥₱30 million). The Holy See moved to dismiss for lack of jurisdiction based on sovereign immunity; Msgr. Cirilos moved as an improper party. On June 20, 1991 and September 19, 1991, the RTC denied both motions, finding that by entering into the sale contract the Holy See had waived immunity.
Intervention by the Department of Foreign Affairs
The Department of Foreign Affairs (DFA) sought to intervene to affirm the Holy See’s diplomatic immunity, adopting its arguments. The Supreme Court allowed the DFA to submit a memorandum and formal certification that the Holy See’s mission enjoys immunity from local jurisdiction.
Reviewability of the RTC Orders
While orders denying motions to dismiss are generally unappealable, exceptions arise when the trial court clearly lacks jurisdiction. The Court held that certiorari under Rule 65 is proper if the complaint must be dismissed as a matter of law and proceeding to trial would waste resources.
Status of the Holy See as a Sovereign State
Under the 1987 Constitution’s adoption of International Law, the Holy See is recognized as a foreign sovereign. The Lateran Treaty (1929) and universal diplomatic practice affirm its international personality. In Philippine practice, the DFA’s executive determination of diplomatic immunity is conclusive.
Doctrine of Sovereign Immunity
Two theories prevail:
- Absolute: no suit without consent.
- Restrictive: immunity for public (jure imperii) acts but not private or commercial (jure gestionis) acts.
Philippine jurisprudence adopts a functional approach: if a transaction is in the sovereign’s proprietary capacity and undertaken for profit, immunity is impliedly waived; if in its governmental capacity or for noncommercial purposes, immunity applies.
Application to the Holy See’s Transactions
The Holy See acquired Lot 5-A not for profit but to house its diplomatic mission, a privilege recognized under the Vienna Convention on Diplomatic Relations. Its later sale was motivated by the inability to use the property, not by commercial gain. Starbright’s complaint admitted the presence of squatters and the Holy See’s noncommercial purpose.
Executive Determination and Jurisdictional Impact
The DFA’s certification that the Holy See’s mission i
Case Syllabus (G.R. No. 101949)
Facts of the Case
- Petitioner Holy See, sovereign over Vatican City, holds title to Lot 5-A, a 6,000 sqm parcel in Parañaque, Metro Manila, donated for use as the Apostolic Nunciature residence.
- Adjacent Lots 5-B and 5-D were held by Philippine Realty Corporation (PRC); all three were sold through Msgr. Domingo A. Cirilos, Jr., acting as agent for petitioner and PRC.
- Ramon Licup paid earnest money of ₱100,000 and acquired rights, then assigned them to private respondent Starbright Sales Enterprises, Inc.
- Squatters on the parcels refused to vacate; parties disputed who would evict them.
- Petitioner later sold Lot 5-A to Tropicana Properties & Development Corporation without notifying private respondent; PRC concurrently sold Lots 5-B and 5-D to Tropicana.
- Transfer certificates for all three lots were cancelled and reissued to Tropicana.
Procedural History
- January 23, 1990: Private respondent filed Civil Case No. 90-183 in RTC Makati Branch 61 for annulment of the sales to Tropicana, reconveyance, specific performance of the original agreement, and damages (alleged loss of at least ₱30 million).
- June 8, 1990: Petitioner moved to dismiss for lack of jurisdiction (sovereign immunity); Msgr. Cirilos moved as improper party.
- June 20, 1991: RTC denied petitioner’s motion, ruling that sovereign immunity was shed by engaging in the sale.
- September 19, 1991: RTC denied reconsideration; also deferred resolution and directed petitioner to file an answer.
- Petitioner filed a Rule 65 certiorari petition with the Supreme Court.
- December 9, 1991: Department of Foreign Affairs (DFA) moved to intervene, endorsing petitioner’s claim of sovereign and diplomatic immunity.
Issues
- Whether a Rule 65 petition may challenge an order denying a motion to dismiss.
- Whether the Holy See, as a foreign sovereign, enjoys