THE HOLY SEE V. HON ERIBERTO U.

ROSARIO 238 SCRA 524 Facts: This is a petition for certiorari under Rule 65 of the Revised Rules of Court to reverse and set aside the Orders dated June 20, 1991 and September 19, 1991 of the RegionalTrial Court, Branch 61,Makati, Metro Manila in Civil Case N0.90183 The order dated June 20 1991 denied the motion of the petitioner to dismiss the complaint in Civil Case No. 90-183, while the Order dated September19, 1991 denied the motion for the reconsideration of the June 20,1991 Order Petitioner was the Holy see who exercises soveregnity over the Vatican City in Rome, Italy, and is represented by the Papal Nuncio. Private Respondent, Starbright Sales Enterprises, Inc., us a domestic corporation engaged in the real Estate business. The petition was arose over a parcel of land consisting of 6,000 square meters located in the Municipality of Paranaque, Metro Manila and registered in the name of the Petitioner(Holy See-Papal Nuncio). The said lot Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by Transfer Certificates of Title Nos. 271108 and 265388 respectively and registered in the name of the Realty Corporation (PRC). The three lots were sold to Ramon Licup, through Domingo A. Cirilos, Jr., Acting agent to the sellers. Licup assigned his rights to the sale to private respondent, Starbright Sales Enterprises. In view if the refusal of the squatters to vacat the lots sold to the private respondent, a dispute arose as to who of the parties has the responsibility of evicting and clearing the land of squatters. . Complicating the relations of the parties was the sale by petitioner of Lot 5-A to Tropicana Properties and Development Corporation (Tropicana Issue: 1.the annulment of teh Deeds of the sale between petitioner and the PRC on hand; the reconveyance of the lots in questioned; specific performance of the agreement to sell between it and the owners lot and damages 2.procedural issue of whether the petition for certiorari under Rule 65 of the Revised Rules of Court can be availed of to question the order denying petitioner's motion to dismiss 3.determine the issue of petitioner's non-suability, Held: This Court has considered the following transactions by a foreign state with private parties as acts jure imperii The operation of the restaurants and other facilities open to the general public is undoubtedly for profit as a commercial and not a governmental activity. By entering into the employment contract with the cook in the discharge of its proprietary function, the United States government impliedly divested itself of its sovereign immunity from suit In the absence of legislation defining what activities and transactions shall be considered "commercial" and as constituting acts jure gestionis, we have to come out with our own guidelines, tentative they may be. Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the

regular course of business. 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. Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in the Philippines on November 15, 1965. Lot 5-A was acquired by petitioner as a donation from the Archdiocese of Manila. The donation was made not for commercial purpose, but for the use of petitioner to construct thereon the official place of residence of the Papal Nuncio. The right of a foreign sovereign to acquire property, real or personal, in a receiving state, necessary for the creation and maintenance of its diplomatic mission, is recognized in the 1961 Vienna Convention on Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the Philippine Senate and entered into force in the Philippines on November 15, 1965. 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 issue of petitioner's non-suability the Department of Foreign Affairs has formally intervened in this case and officially certified that the Embassy of the Holy See is a duly accredited diplomatic mission to the Republic of the Philippines exempt from local jurisdiction and entitled to all the rights, privileges and immunities of a diplomatic mission or embassy in this country;]). Where the plea of immunity is recognized and affirmed by the executive branch, it is the duty of the courts to accept this claim so as not to embarrass the executive arm of the government in conducting the country's foreign relations Private respondent is not left without any legal remedy for the redress of its grievances.Private respondent can ask the Philippine government, through the Foreign Office, to espouse its claims against the Holy See. Its first task is to persuade the Philippine government to take up with the Holy See the validity of its claims The petition for certiorari is GRANTED and the complaint in Civil Case No. 90-183 against petitioner is DISMISSED.

Narvasa, C.J., Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan and Mendoza, JJ., concur