Vilas vs. City of Manila The petitioners were creditors of the City of Manila when it was still under Spanish sovereignty and are now trying to collect on their claims from the city which has since been reincorporated (in 1901), following the cession of the Philippines to the United States under the Treaty of Paris. [During this era, decisions by the Philippine Supreme Court were reviewable by the US Supreme Court if the dispute involved a United States Treaty.] Respondents argue that the liability of the city was effectively extinguished by the change of sovereignty Liability not extinguished. In view of the dual character of municipal corporations, there is no reason for presuming their total dissolution as a mere consequence of military occupation or territorial cession. A municipal corporation is both governmental and proprietary. In the latter character, the corporation is deemed a corporate legal individual existing for private purposes. While there arises a total abrogation of the political relations with the former sovereign, but that body of municipal law which regulates private and domestic rights continues in force until abrogated or hanged by the new ruler.