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[Act No. 3487, (1928-12-08)](
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[ Act No. 3487, December 08, 1928 ]


Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the same:

SECTION 1. Subject to the conditions established in this Act and the provisions of Act Numbered Thirty-one hundred and eight and amendments, applicable thereto, there is hereby granted to Vicente Saldana, for a period of fifty years from the approval of this Act, the right, privilege, and authority to construct, maintain, and operate a water supply system for the purpose of distributing water for sale within the limits of the municipality of Samal, Province of Bataan, Philippine Islands. For this purpose, the grantee shall have the right and privilege to drill, maintain, and operate artesian wells on land owned or duly acquired by him for said purpose within the aforesaid limits, to install and maintain on said land hydraulic pumps moved by steam or otherwise, if necessary, and adequate tanks at suitable heights for storing the water from said artesian wells, and to install, lay, and maintain above or below the ground on the right of way duly acquired by said grantee, or below the ground on all the streets, public thoroughfares and public places and along or under the bridges within said limits, water mains, pipes, and conduits, and all other necessary apparatus and appurtenances for the furnishing and distribution of the water contained in said tanks, and to supply, sell, and furnish water to any person, corporation or public or private concern within said limits for provincial, municipal, domestic, or manufacturing uses and for any other use to which water may be put, and to charge and collect a schedule of prices and conventional rates for  the use of said water: Provided, That the grantee shall not exercise any right or privilege under this franchise nor commence any construction thereunder unless and until he shall have obtained from the Public Service Commission a certificate showing the public necessity and convenience of the exercise of such rights and privileges and such construction, in accordance with Act Numbered Thirty-one hundred and eight, as amended, and shall have filed such certificate with the Secretary of Commerce and Communications upon accepting the terms and conditions of this franchise: And provided, further, That if the grantee does not file the proper application for said certificate with the Public Service Commission within three months from the date of the approval of this Act, this franchise shall become null and void.

SEC. 2. All water mains and pipes situated within the  strong-material zone of the municipality of Samal, Province of Bataan, as now or hereafter established by law, shall be placed at least forty-five centimeters below the surface of the ground as far as the upper part of such mains or pipes is concerned. The water mains or pipes between the storage tanks and the source of supply and said limits of the strong-material zone of the municipality may be put above the ground on the grantee's right of way except where they cross a street or public place, in which case they shall be placed below the ground at the depth above mentioned. The construction and laying of the mains and pipes shall be done in a workmanlike manner, in accordance with a plan previously approved by the district engineer, and whenever it shall be necessary to change the level in any part thereof in order to avoid interference with any public sewer or drain constructed or to be constructed, the grantee herein shall forthwith change such portion of said mains and pipes as the district engineer may direct in writing, and said grantee shall supply water to any applicant for the same,  within fifteen days after the date of his application, in the order of the date of his application up to the limit of the capacity of the system of said grantee, to be determined by the district engineer on the application of said grantee; and should the demand for water at any time increase beyond the capacity of the system of said grantee to supply the same, the capacity of said system shall be increased by said grantee to meet such demand, in accordance with the decision of the Public Service Commission or its lawful successor : Provided, That the distribution system pipes shall be  installed, laid, maintained, and operated only on such streets and public places of the municipality as the district engineer may, with the approval of the municipal council, designate: And provided, further, That the grantee in furnishing water to applicants therefor, as stated, shall make all connections with his mains and shall be entitled to demand and charge therefor the cost of the labor and material used in making the same.

SEC. 3. All apparatus and appurtenances used by the grantee shall be modern and first class in every respect, and the water mains and pipes shall, as above provided, be placed at a depth of at least forty-five centimeters under the surface of the street, measured from such surface to the upper part of such mains or pipes, and when laid in streets or public places, they shall be so placed and maintained as not to interfere in any manner with the unrestricted use of such public places and streets: Provided, That in the maintenance and operation of his water supply system, the grantee shall always be subject to such reasonable regulations as the Public Service Commission or its legal successor may promulgate in the premises.

SEC. 4. Whenever it shall be necessary in the laying of said mains or pipes to take up any portion of the sidewalks or dig up the ground of the sidewalks of public streets or thoroughfares, then the said grantee shall, after said mains or pipes are laid, without delay replace said sidewalks in the proper manner or arrange said streets or public thoroughfares, removing from the same all rubbish, dirt, refuse, or other material which may have been placed there, taken up or dug up in the laying of said mains or pipes, leaving them in as good condition as they were before the work was done; and whenever it shall become necessary, by reason of the extension of roads determined upon by the provincial board of Bataan, or by reason of the extension of streets or plazas determined upon by the municipal council of the municipality above mentioned to change the location of said mains or pipes, such change shall be made by the grantee, his successors or assigns, at their expense, without delay, and said mains or pipes shall be placed where directed by said provincial board or said municipal council.

SEC. 5. The grantee shall be liable to the municipality above named for any injury arising from any claims caused by accidents to person or property by reason of the construction under this franchise or of any neglect or omission to keep the said mains or pipes, artesian wells, hydraulic pumps, and tanks in a safe condition.

SEC. 6. The grantee shall have the right to acquire or obtain by grant, lease or purchase sufficient land for the drilling thereon of artesian wells, the placing of hydraulic pumps moved by steam or otherwise, and the erection of buildings and of tanks at suitable heights for the storage of the water from said artesian wells, and a right of way separate from all streets and public highways not to exceed ten meters in width, from the location of each tank to the limits of the strong-material zone of the municipality above mentioned, and in order to acquire such land or any part thereof he may institute proceedings in any competent court for the expropriation of all such land or any part thereof, as provided by law.

SEC. 7. Said grantee shall file his written acceptance of this franchise with the Secretary of Commerce and Communications within one hundred and twenty days from the date when he obtained the certificate required by section one of this Act, and shall commence work under the supervision and subject to the approval of the district engineer, in accordance with the plan, specifications, and estimates previously approved by the Public Service Commission, within six months' time from and after the date of filing such acceptance, unless prevented by act of God or force majeure, usurped or military power, martial law, riot, or civil commotion or other inevitable cause, and shall complete the system and have the same in operation within eighteen months from the date of such acceptance, and shall thereafter maintain a first-class water system and furnish first-class service to the public and to private consumers: Provided, That in consideration of the franchise hereby granted, the grantee shall pay quarterly into the municipal treasury of the municipality above named, one per centum of the gross earnings of his business during the first thirty years, and two per centum during the remaining twenty years of the life of this franchise.
SEC. 8. Upon the acceptance of this franchise as provided in the last preceding section, the grantee shall deposit in the Insular Treasury or with any of its agents in the Province of Bataan, one thousand pesos, or negotiable bonds of the United States or other securities approved by the Secretary of Commerce and Communications, of the face value of one thousand pesos, as an earnest of good faith and a guaranty that he will begin the water supply business and may be completely provided with the necessary equipment therefor and ready to begin operation in accordance with the terms of this franchise: Provided, however, That if such deposit is in cash, it may be made in some official depository of the Government in the name of the grantee and subject to the order of the Insular Treasurer, who shall retain the evidence of the deposit so made. In this case, as well as in the case of the deposit being made in negotiable bonds or other securities, as provided in this section, the interest of the cash deposit or of the bonds or securities deposited, if any, shall belong to the grantee.

In case such grantee shall fail, refuse, or neglect, unless prevented by fortuitous cause or force majeure, the public enemy, usurped or military power, martial law, riot, civil commotion, or other inevitable cause, to commence the work for the water supply service within six months from the date of the acceptance of this franchise, or shall fail to provide the necessary equipment and be ready to operate within eighteen months after the date of such acceptance, in accordance with the terms of this franchise, then the deposit prescribed in this section and in the possession of the Insular Treasurer, whether in cash, bonds, or other securities, shall be forfeited to the provincial government of Bataan, as damages for the breach of the implied contract involved in the acceptance of this franchise. In case the grantee begins to operate the water supply service, and is ready for operation under this franchise, within the time limits specified, the deposit provided for in this section shall, upon order of the Public Service Commission or its legal successor, be returned by the Insular Treasury to said grantee: Provided, That the time during which such grantee has been prevented by any of the causes above referred to from carrying out the terms and conditions of this franchise, shall be added to the time granted by this franchise for the fulfillment of its conditions.

SEC. 9. This franchise is granted with the understanding and upon the condition that it shall be subject to amendment, alteration, or repeal by the Congress of the United States as provided in section twenty-eight of the Act of Congress approved August twenty-ninth, nineteen hundred and sixteen, entitled "An Act to declare the purpose of the people of the United States as to the future political status of the people of the Philippine Islands, and to provide a more autonomous government for those Islands," or by the Philippine .Legislature, and that it shall be subject, in all respects, to the limitations upon corporations and the granting of franchises contained in said Act of Congress, and that all lands or rights of use or occupation of lands secured by virtue of this franchise shall revert upon its termination to the insular, provincial, or municipal governments which were the owners thereof upon the date on which this franchise was granted, and all property of the grantee used in connection with this franchise shall become the property of the Insular Government.

SEC. 10. In case the grantee shall sell, convey, assign, or give in usufruct this franchise to any corporation, association, or company, said assignee shall be forbidden to issue stock or bonds under this franchise 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 upon prior authority of the Public Service Commission. Nor shall said corporation, association or company declare any stock or bond dividend.

SEC. 11. The books and accounts of the grantee shall always be open to the inspection of the provincial treasurer of Bataan or his authorized representative, and it shall be the duty of the grantee to submit to the provincial treasurer quarterly reports in duplicate showing the gross receipts and the net receipts for the quarter past and the general condition of the business, one of which shall be forwarded by the provincial treasurer to the Insular Auditor, who shall keep the same on file.

SEC. 12. The grantee shall pay on his real estate, buildings, plant, machinery, and other personal property the same taxes as are now or may hereafter be required by law from other persons.

SEC. 13. The grantee herein shall not, without the approval of the Philippine Legislature first had, lease, grant, sell, convey or give in usufruct this franchise and the property and rights acquired thereunder to any person or corporation : Provided, That for the purpose of such lease, grant, sale, conveyance, or giving in usufruct, it shall be necessary to file in the office of the Secretary of Commerce and Communications an agreement in writing by which the person or corporation in whose favor such lease, grant, sale, conveyance, or giving in usufruct is made, shall bind himself to comply with all existing terms and conditions.

SEC. 14. The Public Service Commission or its legal successor, after hearing the interested parties, upon notice and order in writing, shall have the power to declare the forfeiture of this franchise and all rights inherent in the same for failure on part of the grantee to comply with any of the terms and conditions thereof, unless such failure shall have been directly and primarily caused by the act of God, the public enemy, or force majeure. Against such declaration of forfeiture by the Public Service Commission or its legal successor, the grantee may apply for the remedies provided in section thirty-five of Act Numbered Thirty-one hundred and eight, as amended.

SEC. 15. At any time after twenty years from the date of this Act, the Government of the Philippine Islands or any political subdivision thereof to which the right may be assigned, may purchase, and the grantee shall sell thereto all of his artesian wells, hydraulic pumps, tanks, mains or pipes, buildings, real estate, and all other property used in the enjoyment of this franchise, at a valuation based in part upon the net earnings of the grantee and the actual value on the books, making the proper deduction for depreciation, in part on the actual cost of reproduction of said property less depreciation, and in part on the original cost thereof less depreciation, the valuation to be determined, after hearing evidence, by the Supreme Court of the Islands, sitting as a board of arbitrators, whose decision, by a majority of the members thereof, shall be final.

SEC.  16. The rates for the water service fixed by the grantee shall always be subject to regulation by act of the Philippine Legislature or by the authorities authorized by law.

SEC. 17. Wherever in this franchise the term "grantee"  is used, it shall be held and understood to mean and represent Vicente Saldaña, his representatives, successors, or assigns.

SEC. 18. This Act shall take effect on its approval.

Approved, December 8, 1928.