Vilas vs.

City of Manila, 229 US 345

FACTS:
Prior to the incorporation of the City of Manila under Act No. 183 of the Philippine
Commission, petitioner Vilas is the creditor of the City. The City of Manila that incurred
the debts has changed its sovereignty after the cession of the Philippines to the US by the
Treaty of Paris, December 10, 1898. After the incorporation, Vilas brought an action
against the city to recover the sum of money owed to him by the latter upon the theory
that the city, under its present charter from the government of the Philippine Islands, is
the same juristic person and liable upon the obligations of the old city. The contention of
the City of Manila, on the other hand, now is founded on the theory that by virtue of the
Act No. 183 its liability has been extinguished.

ISSUE:
WON, notwithstanding the cession of the Philippine Islands to the United States,
followed by a reincorporation of the city, the present municipality is liable for the
obligations of the city incurred prior to the cession to the United States.
HELD:
The mere change of sovereignty of a country does not necessarily dissolve the municipal
corporation organized under the former sovereign. The new City of Manila is in a legal
sense the successor of the old city. Thus the new city is entitled to all property and
property rights of the predecessor corporation including its liabilities. The court held that
only the governmental functions that are not compatible with the present sovereignty are
suspended. Because the new City of Manila retains its character as the predecessor of the
old city it is still liable to the creditors of the old City of Manila.