Source: https://supreme.justia.com/cases/federal/us/220/345/
Timestamp: 2019-04-21 14:55:04+00:00

Document:
Even if there is no remedy adequate to the collection of a claim against a governmental subdivision when reduced to judgment, a plaintiff having a valid claim is entitled to maintain an action thereon and reduce it to judgment.
Islands under § 10 of the Act of July 1, 1902, c. 1369, 32 Stat. 691, 695.
While military occupation or territorial cession may work a suspension of the governmental functions of municipal corporations, such occupation or cession does not result in their dissolution.
While there is a total abrogation of the former political relations of inhabitants of ceded territory, and an abrogation of laws in conflict with the political character of the substituted sovereign, the great body of municipal law regulating private and domestic rights continues in force until abrogated or changed by the new ruler.
Although the United States might have extinguished every municipality in the territory ceded by Spain under the Treaty of 1898, it will not, in view of the practice of nations to the contrary, be presumed to have done so.
The legal entity of the City of Manila survived both its military occupation by, and its cession to, the United States, and, as in law, the present city, as the successor of the former city, is entitled to the property rights of its predecessor, it is also subject to its liabilities.
The cession in the Treaty of 1898 of all the public property of Spain in the Philippine Islands did not include property belonging to municipalities, and the agreement against impairment of property and private property rights in that treaty applied to the property of municipalities and claims against municipalities.
One supplying goods to a municipality does so, in the absence of specific provision, on its general faith and credit, and not as against special funds in its possession, and even if such goods are supplied for a purpose for which the special funds are held, no specific lien is created thereon.
The facts, which involve the liability of the present City of Manila in the Philippine Islands for claims against the City of Manila as it existed prior to the cession under the Treaty of 1898, are stated in the opinion.
The plaintiffs in error, who were plaintiffs below, are creditors of the City of Manila as it existed before the cession of the Philippine Islands to the United States by the Treaty of Paris, December 10, 1898. 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, these actions were brought against it. The Supreme Court of the Philippine Islands denied relief, holding that the present municipality is a totally different corporate entity, and in no way liable for the debts of the Spanish municipality.
The fundamental question is whether, 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.
We shall confine ourselves to the question whether the plaintiffs in error are entitled to judgments against the city upon their several claims. Whether there is a remedy adequate to the collection when reduced to judgment is not presented by the record. But whether there is or is not a remedy affords no reason why the plaintiffs in error may not reduce their claims to judgment. Mt. Pleasant v. Beckwith, 100 U. S. 514, 100 U. S. 530. The city confessedly may be sued under its existing charter, and that implies at least a right to judgment if they establish their demands.
of July 1, 1902, this Court is given jurisdiction to review any final decree or judgment of the Supreme Court of the Philippine Islands where any Treaty of the United States "is involved." That treaty was necessarily "involved," since neither the court below nor this Court can determine the continuity of the municipality nor the liability of the city as it now exists for the obligation of the old city without considering the effect of the change of sovereignty resulting from that treaty. See Reavis v. Fianza, 215 U. S. 16, 215 U. S. 22.
The historical continuity of a municipality embracing the inhabitants of the territory now occupied by the City of Manila is impressive. Before the conquest of the Philippine Islands by Spain, Manila existed. The Spaniards found on the spot now occupied a populous and fortified community of Moros. In 1571, they occupied what was then and is now known as Manila, and established it as a municipal corporation. In 1574, there was conferred upon it the title of "Illustrious and ever loyal City of Manila." From time to time, there occurred amendments, and, on January 19, 1894, there was a reorganization of the city government under a royal decree of that date. Under that charter, there was power to incur debts for municipal purposes and power to sue and be sued. The obligations here in suit were incurred under the charter referred to, and are obviously obligations strictly within the provision of the municipal power. To pay judgments upon such debts, it was the duty of the ayuntamiento of Manila, which was the corporate name of the old city, to make provision in its budget.
"The inhabitants of the City of Manila, residing within the territory described in section 2 of this act, are hereby constituted a municipality, which shall be known as the City of Manila, and by that name shall have perpetual succession, and shall possess all the rights of property herein granted or heretofore enjoyed and possessed by the City of Manila as organized under Spanish sovereignty."
The boundaries described in § 2 include substantially the area and inhabitants which had theretofore constituted the old city.
By § 4 of the same act, the government of the city was invested in a municipal board.
funds of the city wherever found, or otherwise to protect the interests of the city, and shall defend all suits against the city,"
Section 69 of the charter expressly preserved "all city ordinances and orders in force at the time of the passage of this act, and not inconsistent herewith," until modified or repealed by ordinances passed under this act.
Section 72 is the repealing clause, and provides for the repeal of "all acts, orders, and regulations" which are inconsistent with the provisions of the act.
"the plaintiff may have a claim against the Crown of Spain, which has received from the United States payment for that done by the plaintiff. "
We are unable to agree with the argument. It loses sight of the dual character of municipal corporations. They exercise powers which are governmental and powers which are of a private or business character. In the one character, a municipal corporation is a governmental subdivision, and for that purpose exercises by delegation a part of the sovereignty of the state. In the other character, it is a mere legal entity or juristic person. In the latter character, it stands for the community in the administration of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred.
"The corporation of the City of New York possesses two kinds of powers: one governmental and public, and to the extent they are held and exercised, is clothed with sovereignty; the other private, and to the extent they are held and exercised, is a legal individual. The former are given and used for public purposes, the latter for private purposes. While in the exercise of the former, the corporation is a municipal government, and while in the exercise of the latter, is a corporate legal individual."
See also Dillon, Mun.Corp., 4th ed. 66; City of Petersburg v. Applegarth's Administrator, 28 Gratt. 321, 343, and Oliver v. Worcester, 102 Mass. 489.
In view of the dual character of municipal corporations, there is no public reason for presuming their total dissolution as a mere consequence of military occupation or territorial cession. The suspension of such governmental functions as are obviously incompatible with the new political relations thus brought about may be presumed.
But no such implication may be reasonably indulged beyond that result.
Such a conclusion is in harmony with the settled principles of public law as declared by this and other courts and expounded by the textbooks upon the laws of war and international law. Taylor, International Public Law, § 578.
press, or authorizing cruel and unusual punishments, and the like, would at once cease to be of obligatory force without any declaration to that effect, and the laws of the country on other subjects would necessarily be superseded by existing laws of the new government upon the same matters. But with respect to other laws affecting the possession, use, and transfer of property, and designed to secure good order and peace in the community and promote its health and prosperity, which are strictly of a municipal character, the rule is general that a change of government leaves them in force until, by direct action of the new government, they are altered or repealed."
The above language was quoted with approval in Downes v. Bidwell, 182 U. S. 244, 182 U. S. 298.
That the United States might, by virtue of its situation under a treaty ceding full title, have utterly extinguished every municipality which it found in existence in the Philippine Islands may be conceded. That it did so, in view of the practice of nations to the contrary, is not to be presumed, and can only be established by cogent evidence.
"This city, its inhabitants, . . . and its private property of all descriptions, are placed under the special safeguard of the faith and honor of the American Army."
"all the buildings, wharves, barracks, forts, structures, public highways, and other immovable property which, in conformity with law, belong to the public domain, and as such belong to the Crown of Spain."
"And it is hereby declared that the relinquishment or cession, as the case may be, to which the preceding paragraph refers, cannot in any respect impair the property or rights which by law belong to the peaceful possession of property of all kinds, of provinces, municipalities, public or private establishments . . . having legal capacity to acquire and possess property in the aforesaid territories renounced or ceded, or of private individuals."
Thus, the property and property rights of municipal corporations were protected and safeguarded precisely as were the property and property rights of individuals.
The conclusion we reach, that the legal entity survived both the military occupation and the cession which followed, finds support in the cases which hold that the Pueblos of San Francisco and Los Angeles, which existed as municipal organizations prior to the cession of California by Mexico, continued to exist with their community and property rights intact. Cohas v. Raisin, 3 Cal. 443; Hart v. Burnett, 15 Cal. 530; Townsend v. Greeley, 5 Wall. 326; Merryman v. Bourne, 9 Wall. 592, 76 U. S. 602; Moore v. Steinbach, 127 U. S. 70; Los Angeles Farming & Mill. Co. v. Los Angeles, 217 U. S. 217.
"Many corporations, for want of legal magistrates, have lost their activity, and obtained new charters. Maidstone, Radnor, Carmarthen, and many more are in the same case with Colchester. And yet it has never been disputed but that the new charters revive and give activity to the old corporation; except, perhaps, in that case in Levinz, where the corporation had a new name, and even there the court made no doubt. Where the question has arisen upon any remarkable metamorphosis, it has always been determined that they remain the same as to debts and 'rights.'"
Morris v. State, 62 Tex. 728, 730.
"The state's plenary power over its municipal corporations to change their organization, to modify their method of internal government, or to abolish them altogether, is not restricted by contracts entered into by the municipality with its creditors or with private parties. An absolute repeal of a municipal charter is therefor effectual so far as it abolishes the old corporate organization; but when the same or substantially the same inhabitants are erected into a new corporation, whether with extended or restricted territorial limits, such new corporation is treated as in law the successor of the old one, entitled to its property rights, and subject to its liabilities."
Carriedo works, and made a deposit to guarantee the contract. When the city was occupied by the American Army, it was indebted to him for coal so supplied, as well as for the deposit so made. That the coal was bought for and used in the operation of the Carriedo works is not denied. But there is no evidence that the credit was given to the Carriedo fund so held in trust under the will of Carriedo. The contract was made with the ayuntamiento of Manila, just as all other contracts for city supplies or works were made. The contract not having been made with special reference to the liability of the fund held in trust by the city, but apparently upon the general credit of the city, we are not disposed to reverse the judgment of the court below, holding that the claim of Aguado did not constitute a charge upon the Carriedo fund.
Aguado is nevertheless entitled to a judgment. The designation of the city in the petition as trustee may be regarded as descriptive. The debt having been incurred by the city, it must be regarded as a city liability. Taylor v. Davis, 110 U. S. 330, 110 U. S. 336.
Our conclusion is that the decree in the Aguado case must be reversed and the case remanded, with direction to render judgment and such other relief as may seem in conformity with law. The judgments in the Trigas and Vilas cases will be reversed, and the cases remanded with direction to overrule the respective demurrers, and for such other action as may be consistent with law, and consistent with this opinion.

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