Facts
Prior
to the incorporation of the City of Manila under the Republic Act No. 183,
petitioner Vilas is the creditor of the City. After the incorporation, Vilas
brought an action to recover the sum of money owed to him by 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 and its contention now is
founded on the theory that by virtue of the Act No. 183 its liability has been
extinguished.
Issue
Whether
or not the change of the sovereignty extinguishes the previous liability of the
City of Manila to its creditor?
Held
No.
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.
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