Grant of Franchise to Construct, Maintain, and Operate Telephone and Telegraph Systems

May 30, 1908

ACT NO. 1842

AN ACT TO PROVIDE FOR THE GRANTING OF A FRANCHISE TO CONSTRUCT, MAINTAIN, AND OPERATE TELEPHONE AND TELEGRAPH SYSTEMS, AND TO CARRY ON OTHER ELECTRICAL TRANSMISSION BUSINESS IN AND BETWEEN THE PROVINCES AND MUNICIPALITIES OF THE ISLAND OF PANAY

SECTION 1. Authority is hereby granted and given for the location, construction, equipment, maintenance, and operation of a telephone and telegraph system on the Island of Panay, and the Governor-General is hereby authorized on behalf of the Government of the Philippine Islands to offer for public bidding the franchise set forth in this Act and to grant said franchise to the best bidder upon such terms as to percentage of gross receipts to be paid in lieu of all taxes on the franchise or earnings thereof and the highest rates to be charged by the grantees of said franchise for (his) their services to subscribers, and under such conditions as to time of advertisement and manner of bidding as he may deem fit.

SECTION 2. The franchise referred to in section one hereof shall be substantially in the following form:

"Franchise.

ARTICLE 1. There is hereby granted for a period of fifty years from and after the date of the acceptance of this franchise, upon the consideration and conditions herein contained, to _____________ and _______________________ and (his) their successors or assigns, the right and privilege to construct, maintain, and operate in the Island of Panay, and in and between the provinces and municipalities thereof, a telephone and telegraph system, to carry on the business of transmitting messages and signals by means of electricity in and between said provinces and municipalities and for the purpose of operating said telephone and telegraph system and of transmitting messages and signals by means of electricity to construct telephone and telegraph lines in and between said provinces and municipalities, to construct, maintain, and operate and use all apparatus, conduits, and appliances necessary for the electrical transmission of messages and signals, to erect poles, string wires, build conduits, lay cables, and to construct, maintain, and use such other approved and generally accepted means of electrical conduction in, on, over, or under the public roads, highways, lands, bridges, streets, lanes, alleys, avenue, and sidewalks of said provinces and municipalities as may be necessary and best adapted to the transmission of messages and signals by means of electricity: Provided, However, That all poles erected and all conduits constructed or used by the grantees, (his) their successors or assigns, shall be located in places designated by provincial or municipal authorities, as the case may be, and poles shall be straight and smooth and erected and painted in a good, substantial and workmanlike manner to the satisfaction of such authorities, but it shall not be obligatory on the grantees, (his) their successors or assigns, to paint poles except in centers of population or Poblaciones of municipalities: And Provided Further, That said poles shall be of such a height and the wires or conductors strung or used by said grantees, (his) their successors or assigns, shall be so placed and safeguarded as to prevent danger to life or property by reason of contact with electric light, power, or street railway wires or conductors: And Provided Further, That upon reasonable notice and by resolution of the proper Insular, provincial, or municipal authorities, the grantees, (his) their successors or assigns, may be required to relocate poles or remove or raise wires or other conductors so as to permit the passage of buildings or other structures from one place to another, one-half the actual cost of such relocation of poles or raising or removal of wires or other conductors to be paid by the person at whose instance the building or structure is moved; and, at the expense of the grantees, (his) their successors or assigns, to relocate conduits, poles, and wires used and to raise or remove wires or other conductors when the Insular Government or any provincial or municipal government declares that the public interest so requires: Provided, However, That from any order or regulation of a provincial or municipal government requiring the grantees, (his) their successors or assigns, to relocate conduits, poles, or wires, or to raise or remove wires or other conductors, the said grantees, (his) their successors or assigns, shall have the right of appeal to the Governor-General, whose decision in the matter shall be final and conclusive. ESaITA

"Should the grantees, (his) their successors or assigns, fail, refuse, or neglect within a reasonable time to relocate (his) their poles, conduits, wires, or other conductors, or to raise (his) their wires or other conductors when so directed by the proper Insular, provincial, or municipal authorities, then said authorities may relocate said poles, conduits, wires, or other conductors or raise said wires or other conductors at the expense of the grantees, (his) their successors or assigns: Provided, That the installation of all instruments, the inside wiring, and all outside construction work shall be done in accordance with the rules, regulations, or ordinances covering electrical work adopted by the Insular, provincial, or municipal authorities: And Provided, Further, That whenever twenty-five or more pairs of open wires or other conductors are carried on one line of poles in any city or municipal center, said wires or conductors shall be placed in one cable and that whenever more than two hundred and fifty pairs of wires or other conductors in cables are carried on one line of poles, said cables shall be placed underground by the grantees, (his) their successors or assigns, whenever ordered so to do by the proper Insular, provincial, or municipal authorities: And Provided, Further, That the poles erected, wires and cables strung, or conduits laid by virtue of this franchise shall be so placed as not to impair the efficient and effective transmission of messages or signals by any other company whose poles are erected, whose wires and cables are strung, or whose conduits are actually laid at the time that poles are to be erected, wires and cables are to be strung, or conduits are to be laid under and by virtue of this franchise.

"ART. II. For the purpose of erecting and maintaining poles or other supports for said wires or other conductors or for the purpose of laying and maintaining underground said wires, cables, or other conductors, it shall be lawful for the grantees (his) their successors or assigns, under such regulations and orders as may be prescribed by Insular, provincial, or municipal authorities, to make excavations and lay conduits in any of the public places, lands, roads, highways, streets, lanes, alleys, avenues, bridges, or sidewalks in or between the said provinces or municipalities: Provided, However, That any public place, road, highway, street, lane, alley, avenue, bridge, or sidewalk disturbed, altered or changed by reason of the erection of poles or other supports, or the laying underground of wires or other conductors or of conduits shall where-ever disturbed, altered, or changed, be repaired and replaced in a good, substantial, and workmanlike manner by said grantees, (his) their successors or assigns, to the satisfaction of the Insular, provincial, or municipal authorities, as the case may be. Should the grantees, (his) successors or assigns, after reasonable written notice from said authorities, fail, refuse, or neglect to repair and replace in a good, substantial, and workmanlike manner to the satisfaction of said Insular, provincial, or municipal authorities any part of a public place, road, highway, street, lane, alley, avenue, bridge, or sidewalk altered, changed, or disturbed by said grantees, (his) their successors or assigns, then the Insular, provincial, or municipal authorities, as the casa may be, shall have the right to have the same properly repaired and placed in good order and condition at the cost and expense of the grantees, (his) their successors or assigns.

"ART. III. All telephone and telegraph lines and systems for the transmission of messages and signals by means of electricity owned, maintained, or operated by the grantees, (his) their successors or assigns, shall be maintained and operated at all times in a complete, modern, and first-class style as understood in the United States, and it shall be the further duty of said grantees, (his) their successors or assigns, to modify, improve, and change such telephone and telegraph system or systems, for the transmission of messages and signals by means of electricity, in such manner and to such extent as the progress of science and improvements in the method of transmission of messages and signals by means of electricity may make reasonable and proper.

"ART. IV. The grantees, (his) their successors or assigns, shall keep a separate account of the gross receipts of the telephone, telegraph, and electrical transmission business transacted by them in the municipality of Iloilo and in each of the municipalities of the various provinces of the Island of Panay, and shall furnish to the Insular Auditor and the Insular Treasurer a copy of such account not later than the thirty-first day of July of each year for the twelve months preceding the first day of July. For the purpose of auditing the accounts so rendered to the Insular Auditor and the Insular Treasurer all of the books and accounts of the grantees, (his) their successor or assigns, shall be subject to the official inspection of the Insular Auditor, or his authorized representatives, and in the absence of fraud or mistake the audit and approval by the Insular Auditor of the accounts so rendered to him and to the Insular Treasurer shall be final and conclusive evidence as to the amount of said gross receipts. cHEATI

"ART. V. The grantees, (his) their successors or assigns, shall be liable to pay the same taxes on their real estate, buildings, and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. In addition, the grantees, (his) their successors or assigns, shall pay to the Insular Treasurer each year, within ten days after the audit and approval of the accounts as prescribed in Article IV of this franchise ___________ per centum of all gross receipts of the telephone, telegraph, or other electrical transmission business transacted under this franchise by the grantees, (his) their successors or assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof.

"ART. VI. As a guaranty that this franchise has been accepted in good faith and that within eighteen months from the date of the acceptance hereof the grantees, (his) their successors or assigns, will begin the business of transmitting messages by telephone and will be fully equipped and ready to operate according to the terms of this franchise two hundred telephones in the municipality of Iloilo, the said grantees shall deposit at the time of such acceptance, with the Insular Treasurer, five thousand pesos, or negotiable bonds of the United States or other securities, approved by the Secretary of Commerce and Police, of the face value of five thousand pesos: Provided, However, That if the deposit is made in money the same shall be deposited at interest in some interest-paying bank approved by the Secretary of Commerce and Police, and all interest accruing and due on such deposit shall be collected by the Insular Treasurer and paid to the grantees, (his) their successors or assigns, on demand: And Provided Further, That if the deposit made with the Insular Treasurer be negotiable bonds of the United States or other interest-bearing securities approved by the Secretary of Commerce and Police the interest in such bonds or securities shall be collected by the Insular Treasurer and paid over to the grantees, (his) their successors or assigns, on demand.

"Should the said grantees, (his) their successors or assigns, for any other cause than the act of God, the public enemy, usurped or military power, martial law, riot, civil commotion, or inevitable cause, fail, refuse, or neglect to begin within eighteen months from the date of the acceptance of this franchise the business of transmitting messages by telephone, or fail, refuse, or neglect to be fully equipped and ready to operate within eighteen months from the date of the acceptance of this franchise two hundred telephones in the municipality of Iloilo according to the terms of this franchise, then the deposit prescribed by this Article to be made with the Insular Treasurer, whether in money, bonds, or other securities, shall become the property of the Insular Government, as liquidated damages caused to such Government by such failure, refusal, or neglect, and thereafter no interest on said bonds or other securities deposited shall be paid to the grantees, (his) their successors or assigns. Should the said grantees, (his) their successors or assigns, begin the business of transmitting messages by telephone and be ready to operate according to the terms of this franchise two hundred telephones in the municipality of Iloilo within eighteen months from the date of the acceptance of this franchise, then and in that event the deposit prescribed by this Article shall be returned by the Insular Government to the grantees, (his) their successors or assigns: Provided, However, That all the time during which the grantees, (his) successors or assigns, may be prevented from carrying out the terms and conditions of this franchise by any of said causes shall be added to the time allowed by this franchise for compliance with its provisions. ADSTCa

"ART. VII. The books and accounts of the grantees, (his) successors or assigns, shall be subject to official inspection at any and all times by the Insular Auditor or his authorized representatives.

"ART. VIII. The rights herein granted shall not be exclusive, and the right and power to grant to any corporation, association, or other person other than the grantees franchises for the telephonic, telegraphic, or electrical transmission of messages or signals shall not be impaired or affected by the granting of this franchise: Provided, That the poles erected, wires strung, or conduits laid by virtue of any franchise for telephone, telegraph, or other electrical transmission of messages and signals granted subsequent to this franchise shall be so placed as not to impair the efficient and effective transmission of messages or signals under this franchise by means of poles erected, wires strung, or conduits actually laid and in existence at the time of the granting of said subsequent franchise: And Provided Further, That the grantees of this franchise, (his) their successors or assigns, may be required by the Governor-General to remove, relocate, or replace (his) their poles, wires, or conduits, but in such case the reasonable cost of the removal, relocation, or replacement shall be paid by the grantees of the subsequent franchise or (his) their successors or assigns to the grantees of this franchise, or (his) their successors or assigns.

"ART. IX. The grantees of this franchise, (his) their successors or assigns, shall hold the Insular, provincial, and municipal governments harmless from all claims, accounts, demands, or actions arising out of accidents or injuries, whether to property or to persons, caused by the construction or operation of the telephone, telegraph, or other electrical transmission system of the said grantees, (his) their successors or assigns.

"ART. X. The municipality of Iloilo and the municipalities in which the grantees, (his) successors or assigns, may establish telephone, telegraph, or any other system of electrical transmission of messages and signals shall have the privilege of using, without compensation, the conduits and poles of the grantees, (his) their successors or assigns, for the purpose of installing, maintaining, and operating a fire and police telegraph or telephone alarm system, but the wires of such fire and police telegraph or telephone alarm system shall be so placed, strung, stretched, and insulated as not to interfere with the efficient transmission of messages and signals by the grantees, (his) their successors or assigns.

"ART. XI. Within ninety days after the acceptance of the bid of the grantees, the grantees shall file with the Secretary of Commerce and Police (his) their written acceptance of this franchise and of all the terms and conditions hereof, and the grantees shall begin the construction of (his) their telephone system in the municipality of Iloilo within six months from the date of (his) their acceptance of this franchise and shall begin the business of transmitting messages by telephone and be fully equipped and ready to operate at least two hundred telephones in said municipality within eighteen months from the date of (his) their acceptance of this franchise unless prevented by act of God, the public enemy, usurped or military power, martial law, riot, civil commotion, or inevitable cause. TDaAHS

"The failure, refusal, or neglect to comply with any of the terms and conditions required by this franchise of the grantees, (his) their successors or assigns, shall subject the franchise to forfeiture unless such failure, refusal, or neglect was directly and primarily caused by act of God, the public enemy, usurped or military power, martial law, riot, civil commotion, or inevitable cause.

"ART. XII. The rates to be charged by the grantees, (his) their successors or assigns, shall not exceed the following:

"(a) Subscribers for telephones other than residence telephones, having an individual and metallic circuit, with unlimited exchange switching, shall pay monthly in advance, a flat rate of not exceeding ________ pesos.

"(b) Subscribers having residence telephones on an individual or metallic circuit and unlimited exchange switching shall pay monthly in advance a flat rate of not exceeding _________ pesos.

"(c) Subscribers for telephones, residence or otherwise, having a party wire with not exceeding two subscribers on the same line and unlimited exchanged switching, shall pay monthly in advance a flat rate of not exceeding ___________ per centum of the rate charged subscribers for residence or other telephones, respectively, having individual and metallic circuits.

"(d) Subscribers for telephones, residence or otherwise, having a party wire with more than two subscribers on the same line and unlimited exchange switching, shall pay in advance monthly rates as follows: (Bidder to insert.) cHAIES

"These rates shall apply within the corporate limits of the municipality of Iloilo. No subscribers for telephones authorized by this franchise shall be obliged to purchase instruments or to make any deposit whatever for telephone installation.

"ART. XIII. The rates charged by the grantees, (his) their successors or assigns, shall be subject to regulation by the Board of Rate Regulation, and the right is hereby reserved to the Government of the Philippine Islands to regulate the rates to be charged by the grantees, (his) successors or assigns, but any rates which shall be fixed shall be sufficient to yield a reasonable return to the grantees, (his) their successors or assigns, upon the capital invested after making due allowance for maintenance, operation, and other necessary expenses.

"ART. XIV. The grantees may transfer, sell, or assign this franchise to any corporation formed, organized, or existing under the laws of the Philippine Islands or of any State or Territory of the United States and such corporation shall have the right to buy and to own said franchise, but the grantee shall not sell, transfer, or assign this franchise to any other person, firm, company, corporation, or other commercial or legal entity without the written approval of the Governor-General first had. Any corporation to which this franchise may be sold, transferred, or assigned shall be subject to the corporation laws of the Philippine Islands now existing or hereafter enacted, and any person, firm, company, corporation, or other commercial or legal entity to which this franchise is sold, transferred, or assigned shall be subject to all the conditions, terms, restrictions, and limitations of this franchise as fully and completely and to the same extent as if the franchise had been originally granted to the said person, firm, company, corporation, or other commercial or legal entity.

"ART. XV. This franchise or concession is granted subject to amendment, alteration, or repeal by the Congress of the United States; no stock or bonds shall be issued by the grantees, (his) their successors or assigns, hereunder, except in exchange for actual cash, or for property at a fair valuation equal to the par value of the stock or bonds so issued, and said grantees, (his) their successors or assigns, shall not declare any stock or bond dividend. No private property shall be taken for any purpose under this franchise without just compensation paid or tendered therefor, and any authority to take and occupy land shall not authorize the taking, use, or occupation of any land except such as is required for the actual necessary purposes for which this franchise is granted. All lands or rights of use and occupation of lands granted to the grantees, (his) their successors or assigns, shall, upon the termination of this franchise or upon its revocation or repeal, revert to the Insular Government or the provincial or municipal government to which such lands or the right to use and occupy them belonged at the time the grant thereof or the right to use or occupy the same was conceded to the grantees, (his) their successors or assigns. CADacT

"The foregoing and all other terms and provisions of section seventy-four of the Act of Congress approved July first, nineteen hundred and two, which are applicable to grantees of franchises or concessions, or to their successors or assigns, are incorporated into and made a part hereof, with the same effect as if they were set forth herein at length."

SECTION 3. The blank spaces left in the franchise set out in section two of this Act shall be filled in by the bidders, and each bid shall be accompanied by a certified check for one thousand pesos, as a guaranty of good faith and that the successful bidder will accept the franchise within the time prescribed therein.

SECTION 4. This Act shall take effect on its passage.

ENACTED, May 30, 1908. SaAcHE