Grant of Franchise to John I. Sabin and Louis Glass (Telephone and Telegraph Systems)

July 6, 1905

ACT NO. 1368

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, CITIES, AND MUNICIPALITIES OF THE ISLAND OF LUZON

SECTION 1. There is hereby granted, for a period of fifty years from and after the passage of this Act, upon the consideration and conditions herein contained, to John I. Sabin and Louis Glass and their successors or assigns the right and privilege to construct, maintain, and operate in the Island of Luzon and in and between the provinces, cities, 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, cities, and municipalities, and for the purpose of operating said telephone and telegraph system and on transmitting messages and signals by means of electricity to construct telephone and telegraph lines in and between said provinces, cities, 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, avenues, and sidewalks of said provinces, cities, 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, their successors or assigns, shall be located in the places designated by provincial, city, 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, their successors or assigns, to paint poles except in cities and centers of population 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 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, city, or municipal authorities, the grantees, 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, their successors or assigns, to relocate conduits, poles, and wires and to raise or remove wires or other conductors when the public interest so requires in order to enable Insular, provincial, city, or municipal authorities to prosecute and complete any public work.

Should the grantees, their successors or assigns, fail, refuse, or neglect within a reasonable time to relocate their poles, conduits, or wires or other conductors or to raise their wires or other conductors when so directed by the proper Insular, provincial, city, or municipal authorities, then said authorities may relocate said poles, conduits, or wires or other conductors or raise said wires or other conductors at the expense of the grantees, their successors or assigns: 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 whenever more than two hundred and fifty pairs of wires or other conducts in cables are carried on one line of poles, said cables shall be placed underground.

SECTION 2. 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, their successors or assigns, under such regulations and orders as may be prescribed by Insular, provincial, city, for 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, cities, 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 shall wherever disturbed, altered, or changed be repaired and replaced in a good, substantial, and workmanlike manner by said grantees, their successors or assigns, to the satisfaction of the Insular, provincial, city, or municipal authorities, as the case may be. Should the grantees, their 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, city, 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, their successors or assigns, then the Insular, provincial, city, or municipal authorities, as the case 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, their successors or assigns.

SECTION 3. All telegraph and telephone lines and systems for the transmission of messages and signals by means of electricity owned, maintained, or operated by the grantees, their successors or assigns shall be maintained and operated at all times in a complete, modern, first-class style as understood in the United States, and it shall be the further duty of said grantees, their successors or assigns, to modify, improve, and change such telephone and telegraph system, or system for the transmission of messages 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. TCAScE

SECTION 4. The grantees, 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 city of Manila and in each of the municipalities of the various provinces 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 Insular Treasurer all of the books and accounts of the grantees, their successors 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.

SECTION 5. The grantees, their successors or assigns, shall be liable to pay the same taxes on their real estate, buildings, and personal property exclusive of the franchise as other persons or corporations are now or hereafter may be required by law to pay. The grantees, their successors or assigns, shall further pay to the Insular Treasurer each year, within ten days after the audit and approval of the accounts as prescribed in section four of this Act, two per centum of all gross receipts of the telephone, telegraph, or other electrical transmission business transacted under this franchise by the grantees, their successors or assigns, and the percentage shall be in lieu of all taxes on the franchise or earnings thereof.

SECTION 6. As a guaranty that the franchise has been accepted in good faith and that within eighteen months from the date of the passage of this Act, the grantee, or 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 his franchise one thousand telephones in the city of Manila, the said grantees shall deposit at the time of such acceptance, with the Insular Treasurer, fifty thousand pesos or negotiable bonds of the United States or other securities, approved by the Governor-General, of the face value of fifty 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 Governor-General and all interest accruing and due on such deposit shall be collected by the Insular Treasurer and paid to the grantees, 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 Governor-General, the interest on such bonds or securities shall be collected by the Insular Treasurer and paid over to the grantees, their successors or assigns, on demand. Should the said grantees, their successors or assigns, for any cause other 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 passage of this Act, 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 passage of this Act one thousand telephones in the city of Manila according to the terms of this franchise, then the deposit prescribed by this section 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, their successors or assigns. Should the said grantees, their successors or assigns, begin the business of transmitting messages by telephone and be ready to operate according to the term of this franchise one thousand telephones in the city of Manila within eighteen months from the date of the passage of this Act, then and in that event the deposit prescribed by this section shall be returned by the Insular Government to the grantees, their successors or assigns.

SECTION 7. The books and accounts of the grantees, their successors or assigns, shall be subject to official inspection at any and all times by the Insular Auditor or his authorized representatives.

SECTION 8. The rights herein granted shall not be exclusive, and the right and power to grant to any corporation, association, or person other than the grantees franchises for the telephone, 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 Act shall be so placed as not to impair the efficient and effective transmission of messages or signals under this franchise: And provided further, That the grantees of this franchise may be required by the Philippine Commission to remove, relocate, or replace 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 their successors or assigns to the grantees of this franchise or their successors or assigns.

SECTION 9. The grantees, their successors or assigns, shall hold the Insular, provincial, city, 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, their successors or assigns.

SECTION 10. The city of Manila and the municipalities in which the grantees, their 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 poles of the grantees, their successors or assigns, for the purpose of installing, maintaining, and operating a fire and police telephone alarm system, but the wires of such fire and police 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, their successors or assigns.

SECTION 11. Within ninety days after the date of the passage of this Act the grantees shall file with the Executive Secretary of the Philippine Islands their written acceptance of the franchise granted by this Act and of all the terms and conditions thereof, and the grantees shall begin the construction of their telephone system in the city of Manila within six months from the date of such acceptance and shall begin the business of transmitting messages by telephone and be fully equipped and ready to operate one thousand telephones in said city within eighteen months from the date of the passage of this Act unless prevented by act of God, the public enemy, usurped or military power, martial law, riot, civil commotion, or inevitable cause.

The failure, refusal, or neglect to comply with any of the terms and conditions required of the grantees, their successors or assigns, by this Act, 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.

SECTION 12. Until the grantees, their successors or assigns, shall have in operation four thousand telephones in the city of Manila the rates to be charged by the grantees, 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 not to exceed thirteen pesos, or at the option of the grantees, their successors or assigns, in lieu of such flat rate not to exceed ten centavos per switch, telephone rent free;

B. Subscribers for telephones other than residence telephones, having a party wire, with not exceeding two subscribers on the same line and unlimited exchange switching, shall each pay monthly in advance a flat rate of not to exceed nine pesos, or at the option of the grantees, their successors or assigns, in lieu of such flat rate, not to exceed ten centavos per switch, telephone rent free;

C. Subscribers for telephones other than residence telephones, having a party wire, with four or more subscribers on the same line and unlimited exchange switching, shall each pay monthly in advance a flat rate of not to exceed six pesos, or, at the option of the grantees, their successors or assigns, in lieu of such flat rate, not to exceed ten centavos per switch, telephone rent free;

D. Subscribers, having residence telephones on an individual and metallic circuit and unlimited exchange switching, shall pay monthly in advance a flat rate of not to exceed ten pesos;

E. Subscribers, having residence telephones on party wire, with two subscribers on the same line and unlimited exchange switching, shall each pay monthly in advance a flat rate of not to exceed seven pesos;

F. Subscribers having residence telephones on party wire, with four or more subscribers on the same line and unlimited exchange switching, shall each pay monthly in advance a flat rate of not to exceed five pesos: Provided, That these rates shall only apply within the following described limits in the city of Manila:

 Commencing at a point on the shore of Manila Bay, about one hundred and fifty feet distant in a northerly direction from the north line of Calle de Moriones, prolonged so as to intersect said shore, and running in a straight line from said point to a point about one hundred and fifty feet northwest of the junction of Calle Zurbaran and Calle Feliz, thence in a straight line to a point on the Estero de Valencio about one hundred feet north of Calle de Santa Mesa, thence following the center line of said estero to the center line of the Pasig River, thence following said center line of the Pasig River in a westerly direction to a point opposite the mouth of the Estero Paco, thence following the center line of the said Estero Paco to a point about one hundred and fifty feet south of the Paco Bridge, thence westerly in a straight line parallel with Calle de Herran to a point about one hundred and fifty feet east of Calle Nueva, thence in a southerly direction parallel with Calle Nueva to a point about two hundred feet north of the Estero de San Antonio, thence in a straight line in a southwesterly direction to the shore line of Manila Bay and thence along said shore line as now or hereafter existing to the point of beginning.

For each telephone line in the city of Manila running beyond said limits an additional charge of fifteen pesos per annum may be made for each additional quarter mile, or fraction thereof greater than one hundred and twenty feet, beyond said limits, such additional charge to be divided among the telephones on such line: Provided, however, That whenever there are twenty-five or more pairs of wires or conductors in use on any line of poles or conduits or portion thereof beyond said limits and in the city of Manila no mileage or extra compensation in addition to the maximum rates fixed above shall be charged to anyone for service on such wires or conductors or to anyone along said line of poles or conduits.

SECTION 13. The right is hereby reserved to the Government of the Philippine Islands to regulate the rates to be charged by the grantees, their successors or assigns, but any rates which may hereafter be fixed shall be sufficient to yield a reasonable return to the grantees, their successors or assigns, upon the capital invested after making due allowance for maintenance, operation, and other necessary expenses. ITAaHc

SECTION 14. 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 of the United States and such corporation shall have the right to buy and to own said franchise. Any corporation to which this franchise is sold, transferred, or assigned shall be subject to the corporation laws of the Philippine Islands now existing or hereafter enacted and shall be subject to all the terms, conditions, restrictions, and limitations of this franchise as fully and completely and to the same extent as if the franchise had been originally granted to said corporation.

SECTION 15. Should the grantees, their successors or assigns, purchase the franchise of the Sociedad de Telefonos de Manila, all rights and privileges acquired by such franchise, shall be considered as merged in this franchise, and the telephone system so purchased shall be maintained, operated, and conducted under the provisions, terms, conditions, restrictions, and limitations of this Act and the franchise under which the said Sociedad de Telefonos de Manila is now operating shall have no force or effect whatever after the purchase thereof by the grantees, their successors or assigns.

SECTION 16. No private property shall be taken for any purpose by the grantees of this franchise, their successors or assigns, without proper condemnation proceedings and 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 the franchise is granted. All lands or rights of use and occupation of lands granted to the grantees, 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, their successors or assigns. The grantees, their successors or assigns, shall not issue stock or bonds except in exchange for actual cash or for property at a fair valuation equal to the par value of the stock or bonds issued, and said grantees, their successors or assigns, shall not declare any stock or bond dividend. The grantees, their successors or assigns, shall not use, employ, or contract for the labor of persons claimed or alleged to be held in involuntary servitude. This franchise is granted subject to amendment, alteration, or repeal by the Congress of the United States.

SECTION 17. The public good requiring the speedy enactment of this bill, the passage of the same is hereby expedited in accordance with section two of "An Act prescribing the order of procedure by the Commission in the enactment of laws," passed September twenty-sixth, nineteen hundred.

SECTION 18. This Act shall take effect on its passage.

ENACTED, July 6, 1905.