FOR RECIT

Vilas argument: Filed action to recover sum of money owed by City of Manila. (A debt
incurred by the old city for coal to be used in its municipal waterworks system is a municipal
obligation)

City of Manila argument: Not liable because liability has been deemed extinguished, new
municipality is a different corporate entity from the old.

CFI: The claim for sum of Money of Vilas should be against the Crown of Spain.

PH SC: The new municipality is not liable, old city ceased to exist.

Hence, Vilas appealed to US Supreme Court

ISSUE: WON City of Manila (new city), after the transfer of sovereignty from Spain to the
United States, was liable for the obligations of the Spanish municipality.

RULING: (by US SC)

Yes! the new city is liable to Vilas et al.

1. The city, as reincorporated, succeeded to all of the property rights of the old city and the
right to enforce all of its causes of action.
2. There was identity of purpose between the Spanish and American charters and substantial
identity of municipal powers.
3. The city had a dual character as governmental subdivision, a part of the sovereignty of
the state, and as a contracting party in the administration of its affairs., and the dissolution
of the old city affected the former identity but not the latter.
4. In law, the present city was the successor of the old, and all of its rights and all of its
liabilities.
5. It is a general rule in public law that whenever political jurisdiction and legislative power
over any territory are transferred from one nation to another, the municipal laws of the
country, laws which are intended for the protection of private rights, continue in force
until changed by the new government. That the property rights if municipal corporation
were protected and safeguard precisely as were the property rights if individuals.

CASE REMANDED.