Holy See vs. Rosario G.R. 101949 (1994)

ISSUE:  Whether the Holy See is immune from suit insofar as its business relations regarding selling a lot to a private entity. 

FACTS:  Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the name Holy See, was contiguous to Lot 5-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, 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. Cirilios, 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. The Holy See and Msgr. Cirilos moved to dismiss the petition for lack of jurisdiction based on sovereign immunity from suit  

DECISION:  Petiton granted. 

RATIO DECIDENDI:  The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in nature. 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.