220 US 345
Petitioners are creditors of the city of Manila before the cession of the Philippine Islands to the United States. The Supreme Court of the Philippine Islands denied relief, holding that the present municipality is a totally different corporate identity from the previous one and is not liable for the debts of the Spanish municipality.
Is the present municipality liable for the obligations of the city incurred prior to the cession to the United States?
The contention that the liability of the city upon such obligations was destroyed by a mere change of sovereignty is one which is without a shadow of moral force. The city, acting as a corporation, possesses two kinds of powers: governmental and public. In view of the dual character of municipal corporations, there is no public reason for the presuming their total dissolution as a consequence of military occupation or territorial cession. The cession did not operate as an extinction or dissolution of corporations. The present city is, in every legal sense, the successor of the old. As such, it is entitled to the property and property rights of the predecessor corporation, and is, in law, subject to all of its liabilities. All three of plaintiffs in error are entitled to judgment.