Grant of Franchise to William H. Allen and J.H. Brown (Telephone and Telegraph Systems)

May 18, 1907

ACT NO. 1658

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 considerations and conditions herein contained to William H. Allen and J. H. Brown, 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 systems and of 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 or 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 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 Insular, city, 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, their successors or assigns, to relocate conduits, poles, or wires, or to raise or remove wires or other conductors, the said grantees, their successors or assigns, shall have the right of appeal to the Governor-General, whose decision in the matter shall be final and conclusive.

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 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 Insular, provincial, city, 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 a city or municipal center, said wires or conductors shall be placed in one cable; and that whenever more than one hundred pairs of wires or other conductors in cables are carried on one line of poles, said cables shall be placed underground: And provided further, That the grantees, their successors or assigns, under this franchise, shall install in the city of Manila, within eighteen months from the date of the passage of this Act, underground conduit equivalent to at least one hundred and twenty thousand feet on single conduit: 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 impair the efficient and effective transmission of messages or signals under the franchise granted to the Philippine Islands Telephone and Telegraph Company, or to impair the efficient and effective transmission of message or signals of any other company whose poles are erected, whose wires and cables are strung, or whose conduits are actually laid at the time the 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.

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 unlawful for the grantees, their successors or assigns, under such regulations and orders as may be prescribed by Insular, provincial, city, 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, city, 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, 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 distributed 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 systems, 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.

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 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 said 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 grantees, or their successors or assigns, will have constructed, or reinforced concrete or other material approved by the Director of Public Works, a main central building in the city of Manila, which building, including the site on which it is constructed, shall cost not less than eighty thousand pesos, and the structure itself not less than sixty thousand pesos; that they will have placed an underground conduit equivalent to one hundred thousand feet of single conduit; that they 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 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 said 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 construct the building or lay the conduit prescribed by this Act within eighteen months after its passage, or 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: Provided, That a reasonable extension of time, for proper cause shown, may be granted by the Governor-General for the completion of the work.

Should the said grantees, their successors or assigns, construct the building and lay the conduit as prescribed by this Act and begin the business of transmitting messages by telephone and be ready to operate according to the terms 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 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 Act 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 may be required by the Governor-General 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 of this franchise, 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 telegraph or telephone alarm system, but the wires of such telegraph or telephone, fire, and police alarm 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. In consideration of the city of Manila permitting drainage into the new sewers of the city from the ducts of the grantees, their successors or assigns, and in consideration of the said city permitting the grantees, their successors or assigns, to hang their wires and cables on its poles, the said grantees, their successors or assigns, shall give to the city free of charge the exclusive use of one duct throughout its underground conduits for its fire and police alarm wires: Provided, however, That any drainage from the ducts into the sewers shall be under reasonable rules and regulations prescribed by the Municipal Board of Manila, and in case permission to drain from the ducts into the sewers is not granted to the grantees of this franchise, or their successors or assigns, before construction work is commenced, then no free use of the duct shall be required as aforesaid: And provided further, That in case the grantees, their successors or assigns, shall hang their wires and cables on the poles of the said city of Manila, they shall be so placed, strung, stretched, and insulated as not to interfere with the efficient transmission of fire and police alarm messages and signals by the city of Manila, and the placing, stringing, stretching, and insulating of the wires and cables of the grantees, their successors and assigns, on poles of the city of Manila shall be done in accordance with regulations prescribed by the city of Manila.

SECTION 11. Within sixty days after the passage of this Act the grantees shall file with the Secretary of Commerce and Police 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 eight 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 at least 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. The time during which the grantees are prevented from carrying out the terms and conditions of this franchise by any of the causes cited herein shall be added to the time allowed by the franchise for compliance with its provisions.

SECTION 12. 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 ten pesos;

(b) Subscribers having residence telephones on an individual and metallic circuit, and unlimited exchange switching, shall pay monthly in advance flat rate of not to exceed five pesos;

(c) Subscribers for telephones, residence or otherwise, 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 sixty-five per centum of the rate charged subscribers for residence or other telephones, respectively, having individual and metallic circuits.

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

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 the maintenance, operation, and other necessary expenses.

 

SECTION 14. The grantees may transfer, sell, or assign this franchise to the Automatic Telephone Construction Company, formed and organized under the laws of the State of California, and such company shall have the right to buy and to own said franchise, but the grantees shall not transfer, sell, 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 is 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 said persons, firm, company, corporation, or other commercial or legal entity.

Unless otherwise authorized by the Governor-General, the person, firm, company, corporation, or other commercial or legal entity to which this franchise may be transferred, sold, or assigned shall operate the automatic telephone system in the city of Manila during the life and under the terms of this franchise, and the property of the person, firm, company, corporation, or other commercial or legal entity concerned shall be security for the carrying out of the terms of this section and of this franchise; and for the failure to operate the automatic telephone system in the city of Manila in accordance with the terms of this franchise, and for the period for which this franchise is granted, all property of the grantees, or their successors or assigns, in the city of Manila shall become the property of the Government of the Philippine Islands as liquidated damages.

SECTION 15. 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 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 stocks 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 16. 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 17. This Act shall take effect on its passage.

Enacted: May 18, 1907