KHOSROW MINUCHER, PETITIONER, VS. THE HONORABLE COURT OF APPEALS AND ARTHUR W. SCALZO, JR., RESPONDENTS.

May a complaint for damages be dismissed on the sole basis of a statement
contained in a Diplomatic Note, belatedly issued after an answer to the said
complaint had already been filed, that the defendant was a member of the
diplomatic staff of the United States Diplomatic Mission in the Philippines at
the time the cause of action accrued?

This is the issue in the instant petition.

On 3 August 1988, petitioner filed with the Regional Trial Court
(RTC) of Manila a complaint for damages against private respondent Arthur
Scalzo, Jr.. The case was docketed as
Civil Case No. 88-45691 and was raffled off to Branch 19 of said court.^[1]
Petitioner alleges therein that he was the Labor Attache of the Embassy of Iran
in the Philippines “prior to the Ayatollah Khomeini regime.” On 13
May 1986, private respondent, then connected with the American Embassy in
Manila, was introduced to him by a certain Jose Iñigo, an informer belonging to
the military intelligence community, with whom petitioner had several business
transactions involving Iranian products like carpets, caviar and others. Iñigo had previously sought petitioner’s
assistance in connection with charges of illegal recruitment. According to Iñigo, private respondent was
purportedly interested in buying Iranian products, namely caviar and
carpets. On this same occasion, petitioner
complained to the private respondent about the problems the former was then
encountering with the American Embassy regarding the expired visas of his wife
and fellow Iranian, Abbas Torabian. Offering his help, private respondent gave the petitioner a calling card
showing that the former is an
agent of the Drug Enforcement Administration (DEA), Department of Justice, of
the United States of America assigned to the American Embassy in Manila with
official contacts with a certain Col. Dumlao, head of the Anti-Narcotics
Command, Philippine Constabulary. Private respondent also expressed his intent to purchase two (2) kilos
of caviar worth P10,000.00 and informed the petitioner that he might have
prospective buyers for these goods; he further promised to arrange for the
renewal of the aforesaid visas for a $2,000.00 fee. On 19 May 1986, private respondent invited petitioner to dinner
at Mario’s Restaurant in Makati, Metro Manila; the petitioner accepted. During the said dinner held the very next
day, both discussed politics and business. Specifically, private respondent told petitioner that he wanted to
purchase an additional two hundred (200) grams of caviar and inquired about his
commission for selling petitioner’s carpets; petitioner promised a 10% commission
based on profits.

In the evening of 26 May 1986, private respondent came to
petitioner’s residence and asked to be entrusted with a pair of Persian silk
carpets with a floor price of $24,000.00 each, for which he had a buyer. The following day, private respondent
returned to petitioner’s residence, took the carpets and gave the latter
$24,000.00; after about an hour, private respondent returned, claimed that he
had already made arrangements with his contacts at the American Embassy
concerning the visas and asked for $2,000.00. He was given this amount. It
turned out, however, that private respondent had prepared an elaborate plan to
frame-up the petitioner and Abbas Torabian for alleged heroin trafficking; both
were falsely arrested by private respondent and some American and Filipino
police officers, and were taken to Camp Crame in their underwear. Private respondent and his companions took petitioner’s three
(3) suitcases containing various documents, his wallet containing money and the
keys to his house and car, as
well as the $24,000.00 which private respondent had earlier delivered to
him. Petitioner and Torabian were
handcuffed together for three (3) days and were not given food and water; they
were asked to confess to the possession of heroin or else they would be jailed or even executed by Iranian
terrorists. Consequently, the two were
charged for the violation of Section 4 of R.A. No. 6425 (Dangerous Drugs Act of
1972) before the Regional Trial Court of Pasig. They were, however, acquitted by the said court on 8 January
1988. Private respondent testified for
the prosecution in the said case.

Petitioner further alleges in his complaint that private
respondent falsely testified against him in the criminal case. The former also avers that charges of
unlawful arrest, robbery and estafa or swindling have already been filed
against the private respondent.

He therefore prays for actual and compensatory damages of not
less than P480,000.00 ($24,000.00) representing the fair market value of the Persian
silk carpet and $2,000.00 representing the refund of the amount he had given
for the visas; moral damages in the amount of P5 million; exemplary damages in
the sum of P100,000.00 and
attorney’s fees of at least P200,000.00
to answer for litigation expenses incurred for his defense in the
criminal case and for the prosecution of the civil case.

On 14 September 1988, private respondent’s counsel, the law firm
LUNA, SISON AND MANAS, filed a Special Appearance and Motion alleging therein
that since the private respondent is an agent of the Drug Enforcement
Administration of the United States of America, and the acts and omissions
complained of were performed by him in the performance of official functions,
the case is now under study by the Departments of State and Justice in
Washington, D.C. for the purpose of determining what defenses would be
appropriate; said counsel also prayed that the period to answer be extended to
13 October 1988.^[2]
This prayer was granted in the 16 September 1988 order of the court.

On 12 October 1988, private respondent’s aforesaid counsel filed
another Special Appearance and Motion seeking a further extension of the period
to answer to 28 October 1988
because the law firm had not yet received the decision of the Departments of State
and Justice.^[3]

On 27 October 1988, private respondent’s counsel filed a Special
Appearance to Quash Summons^[4]
alleging therein that: “The action
being a personal action for damages arising from an alleged tort, the defendant
being outside the Philippines and not being a resident of the Philippines, Defendant is beyond the processes of this
court,” and praying that the summons issued be quashed. The trial court denied the motion in its
Order of 13 December 1988.^[5]
Unsatisfied with the said order, private respondent filed a petition for certiorari with the Court of
Appeals which was docketed as C.A.-G.R. SP No. 17023. In its Decision promulgated on 6 October 1989, the Court of
Appeals dismissed the petition for lack of merit.^[6]
Respondent thus sought a review of the said
decision by filing a petition with this Court which was docketed as G.R.
No. 91173. Said petition was, however,
dismissed by this Court in the Resolution of 20 December 1989 for
non-compliance with paragraph 2 of Circular No. 1-88; moreover, respondent
failed to show that the Court of
Appeals had committed any reversible error in the questioned judgment.^[7]

On 9 March 1990, private respondent filed with the trial court
his Answer in Civil Case No. 88-46591^[8]
wherein he denies the material allegations in the complaint, sets forth the
following Affirmative Defenses:

“The Complaint fails to state a cause of action: in having plaintiff and Abbas Torabian
arrested on May 27, 1986 and detained at Camp Crame; a quantity of heroin,
seized from plaintiff by Philippine police authorities and in seizing the money
used in the drug transaction, defendant acted in the discharge of his official
duties or otherwise in the performance of his official functions as agent of
the Drug Enforcement Administration, U.S. Department of Justice.”^[9]

and interposes a counterclaim for P100,000.00 to answer for attorney’s
fees and the expenses of litigation.

On 13 June 1990, private respondent filed with the trial court
the Defendant’s Pre-Trial Brief,^[10] the
pertinent portions of which read:

x x x

“DEFENSES

1. Plaintiff’s complaint is false and malicious;

2. In having a quantity of heroin and the
money used in the drug transaction between him and plaintiff seized from
plaintiff by P. C. NARCOM, plaintiff (sic) was acting in the discharge of his
official functions as special agent of the Drug Enforcement Administration,
U.S. Department of Justice and was then a member of the U.S. diplomatic mission
in the Philippines.

DEFENDANT’S EVIDENCE

Defendant will present:

1. His testimony by deposition upon written
interrogatories because defendant lives and works outside the Philippines and
is not a resident of the
Philippines.

2. Documentary evidence, consisting of DEA records on his
investigation and surveillance of plaintiff and on his position and duties as
DEA special agent in May 1986 in Manila; these will be identified by defendant
and possibly by another DEA official.”^[11]

On 14 June 1990, private respondent filed a Motion to Dismiss^[12]
the case on the ground that as per the copy of Diplomatic Note No. 414 issued
by the Embassy of the United States of America,^[13]
dated 29 May 1990 and certified to be a true and faithful copy of the original
by one Donald K. Woodward, Vice-Consul of the United States of America on 11
June 1990,^[14]
the Embassy advised the Department of Foreign Affairs of the Republic of the
Philippines that:

“x x x Arthur
W. Scalzo, was a member of the diplomatic staff of the United States diplomatic
mission from his arrival in the Philippines on October 14, 1985 until his
departure on August 10, 1988. x x x

x x x in May 1986, with the
cooperation of Philippine law enforcement officials and in the exercise of his functions as a member of
the mission, Mr. Scalzo investigated Mr. Khosrow Minucher, the plaintiff in the
aforementioned case for allegedly trafficking in a prohibited drug. It is this investigation which has given
rise to the plaintiff’s complaint. The
Embassy takes note of the provisions of Article 39(2) of the Vienna Convention
on Diplomatic Relations, which provides that Mr. Scalzo retains immunity from civil suit for acts performed in the
exercise of his functions, as is
the case here, even though he has departed (sic) the country.”

Petitioner opposed the motion.

On 25 June 1990, the trial court issued an order denying the
motion for being “devoid of merit.”^[15]

Private respondent then filed with the public respondent Court of
Appeals a petition for certiorari, docketed therein as C.A.-G.R.
SP No. 22505, to nullify the aforesaid Order of 25 June 1990.

On 31 October 1990, public respondent promulgated a Decision^[16]
ordering the dismissal of Civil Case No. 88-45691 due to the trial court’s lack
of jurisdiction over the person of the defendant because the latter possessed
diplomatic immunity.

Petitioner’s motion to reconsider the decision was denied in the
public respondent’s Resolution of 8 March 1991 because:

“When therefore Mr. Scalzo testified in the Criminal Case
against Khosrow Minucher it was in connection with his official functions as an
agent of the Drug Enforcement Administration of the United States and member
(sic) of the American Mission charged with cooperating with the Philippine law enforcement agency. He therefore, enjoys immunity from criminal and civil
jurisdiction of the receiving State
under Article 31 of the Vienna
Convention on Diplomatic Relations.”^[17]

Hence, this petition for review under Rule 45 of the Rules of
Court. Petitioner declares that the
public respondent erred:

“I. x x x IN NOT DISMISSING THE PETITION FOR CERTIORARI
FILED BY SCALZO.

II.    x x x IN RULING THAT PRIVATE RESPONDENT SCALZO IS A DIPLOMAT
IMMUNE FROM CIVIL SUIT CONFORMABLY WITH THE VIENNA CONVENTION ON DIPLOMATIC
RELATIONS.

III. x x x IN NOT FINDING THAT SCALZO’S PARTICIPATION IN THE BUY-BUST
OPERATION IS OUTSIDE OF HIS OFFICIAL FUNCTIONS, HENCE, THAT HE IS NOT IMMUNE
FROM SUIT UNDER THE VIENNA CONVENTION ON DIPLOMATIC RELATIONS.”^[18]

After private respondent filed his Comment to the petition and the
petitioner submitted his Reply thereto, this Court gave due course to the same
and required the parties to submit their respective Memoranda, which they
subsequently did.

We find merit in the petition.

While the trial court correctly denied the motion to dismiss, the
public respondent gravely abused its discretion in dismissing Civil Case No.
88-45691 on the basis of an erroneous assumption that simply because of the
Diplomatic Note, the private respondent is clothed with diplomatic immunity,
thereby divesting the trial court of jurisdiction over his person. It may at once be stated that even if the
private respondent enjoys diplomatic immunity, a dismissal of the case cannot
be ordered on the ground of lack of jurisdiction over his person, but rather
for lack of a cause of action because even if he committed the imputed act and
could have been otherwise made liable therefor, his immunity would bar any suit
against him in connection therewith and would prevent recovery of damages
arising therefrom. Jurisdiction over
the person of the defendant is acquired either by his voluntary appearance or
by the service of summons upon him. While in the instant case, private respondent’s counsel filed, on 26
October 1988, a motion to quash summons because being outside the Philippines
and being a non-­resident alien, he is beyond the processes of the court, which
was properly denied by the trial court, he had in effect already waived any
defect in the service of the summons by earlier asking, on two (2) occasions,
for an extension of time to file an answer, and by ultimately filing an Answer
with Counterclaim. There is no question
that the trial court acquired jurisdiction over the person of the private
respondent.

And now to the core issue — the alleged diplomatic immunity of
the private respondent. Setting aside
for the moment the issue of authenticity raised by the petitioner and the
doubts that surround such a claim, in view of the fact that it took private
respondent one (1) year, eight (8) months and seventeen (17) days from the time
his counsel filed on 12 September 1988 a Special Appearance and Motion asking
for a first extension of time to
file the Answer because the Departments of State and Justice of the United
States of America were studying the case for the purpose of determining his
defenses, before he could secure the Diplomatic Note from the U.S. Embassy in
Manila, and even granting for the sake of argument that such note is authentic,
the complaint for damages filed by the petitioner still cannot be peremptorily
dismissed. Said complaint contains sufficient allegations which indicate
that the private respondent committed the imputed acts in his personal capacity
and outside the scope of his official duties and functions. As described in the complaint, he committed
criminal acts for which he is also civilly liable. In the Special Appearance to Quash Summons earlier alluded to, on
the other hand, private respondent maintains that the claim for damages arose
“from an alleged tort.” Whether such claim arises from criminal acts
or from tort, there can be no question that private respondent was sued in his
personal capacity for acts committed outside his official functions and
duties. In the decision acquitting the
petitioner in the criminal case involving the violation of the Dangerous Drugs
Act, copy of which is attached to his complaint for damages and which must be
deemed as an integral part thereof, the trial court gave full credit to
petitioner’s theory that he was a victim of a frame-up instigated by the private respondent. Thus, there is a prima facie showing
in the complaint that indeed private respondent could be held personally liable
for the acts committed beyond his official functions or duties.

In Shauf vs. Court of
Appeals,^[19] after citing pertinent authorities,^[20]
this Court ruled:

“The aforecited authorities are clear on the matter. They state that the doctrine of immunity
from suit will not apply and may not be invoked where the public official is
being sued in his private and personal capacity as an ordinary citizen. The cloak of protection afforded the
officers and agents of the government is removed the moment they are sued in
their individual capacity. This situation
usually arises where the public official acts without authority or in excess of
the powers vested in him. It is a
well-settled principle of law that a public official may be liable in his
personal private capacity for whatever damage he may have caused by his act
done with malice and in bad faith, or beyond the scope of his authority or
jurisdiction (Dumlao vs. Court
of Appeals, et al., 114 SCRA 247 [1982]).”

Even Article 31 of the Vienna Convention on Diplomatic Relations
admits of exceptions. It reads:

“1. A diplomatic agent shall enjoy immunity
from the criminal jurisdiction of the receiving
State. He shall also enjoy
immunity from its civil and administrative jurisdiction except in the case of:

x x x

(c) an action relating to any professional or commercial activity
exercised by the diplomatic agent in the receiving State outside his official functions. (Emphasis supplied).

There is of course the claim of private respondent that the acts
imputed to him were done in his official capacity. Nothing supports this self-serving claim other than the so-called
Diplomatic Note. In short, insofar as
the records are concerned, private respondent did not come forward with
evidence to prove that indeed, he had acted in his official capacity. It does not appear that an actual hearing on
the motion to dismiss was conducted and that private respondent offered
evidence in support thereof. Thus, it
is apropos to quote what this Court stated in United States of
America vs. Guinto:^[21]

“But even as we are certain that the individual petitioners in
G.R. No. 80018 were acting in the discharge of their official functions, we
hesitate to make the same conclusion in G.R. No. 80258. The contradictory factual allegations in
this case deserve in our view a closer study of what actually happened to the
plaintiffs. The record is too meager to
indicate if the defendants were really discharging their official duties or had
actually exceeded their authority when the incident in question occurred. Lacking this information, this Court cannot
directly decide this case. The needed
inquiry must first be made by the
lower court so it may assess and resolve the conflicting claims of the parties
on the basis of the evidence that has yet to be presented at the trial. Only after it shall have determined in what
capacity the petitioners were acting at the time of the incident in question
will this Court determine, if still necessary, if the doctrine of state
immunity is applicable.”

It may be mentioned in this regard that private respondent
himself, in his Pre-trial Brief filed on 13 June 1990, unequivocally states
that he would present documentary evidence consisting of DEA records on his
investigation and surveillance of plaintiff and on his position and duties as
DEA special agent in Manila. Having
thus reserved his right to present evidence in support of his position, which
is the basis for the alleged diplomatic immunity, the barren self-serving claim
in the belated motion to dismiss cannot be relied upon for a reasonable,
intelligent and fair resolution of the issue of diplomatic immunity.

The public respondent then should have sustained the trial
court’s denial of the motion to dismiss. Verily, such should have been the most proper and appropriate
recourse. It should not have been
overwhelmed by the self-serving Diplomatic Note whose belated issuance is even
suspect and whose authenticity has not yet been proved. The undue haste with which respondent Court
yielded to the private respondent’s claim is arbitrary.

WHEREFORE, the challenged decision of public respondent of
31 October 1990 in C.A.-G.R. SP No. 22505 is SET ASIDE and the Order of 25 June
1990 of Branch 19 of the Regional Trial Court of Manila in Civil Case No.
88-45691 denying private respondent’s Motion to Dismiss is hereby REINSTATED.

Costs against private respondent.

SO ORDERED.

Bidin, Romero, and Melo,
JJ., concur.

Gutierrez, Jr., J., (Chairman), on
official leave.

^[1]
Rollo, 144-149.

^[2]
Rollo, 45-46.

^[3]
Rollo, 48-49.

^[4]
Id., 51-57.

^[5]
Id., 58-60.

^[6]
Id., 61-65.

^[7]
Id., 66.

^[8]
Rollo, 150-154.

^[9]
Id., 152.

^[10]
Id., 155-158.

^[11]
Rollo, 157-158.

^[12]
Id., 159-163.

^[13]
Annex “F” of Memorandum for
Petitioner; Id., 164-165.

^[14]
Id., 166.

^[15]
Rollo, 167.

^[16]
Id,, 72-75. Per Associate Justice
Fernando A. Santiago, concurred in by Associate Justices Vicente V. Mendoza and
Justo P. Torres, Jr.

^[17]
Id., 76.

^[18]
Rollo, 10.

^[19]
191 SCRA 713, 728 [1990].

^[20]
Director of the Bureau of
Telecommunications vs. Aligaen, 33 SCRA 368 [1970] and the cases cited
therein; Baer vs. Tizon, 57 SCRA 1 [1974]; Animos vs. Phil.
Veterans Affairs Office, 174 SCRA
214 [1989].

^[21]
182 SCRA 644, 660 [1990].