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[Act No. 3407, (1927-12-05)](
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[ Act No. 3407, December 05, 1927 ]


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 its amendments, applicable thereto, there is hereby granted to the company known as Ilagan Electric and Ice Plant, Incorporated, for a period of fifty years from the approval of this Act, the right, privilege, and authority to construct, maintain, and operate on all the streets, public thoroughfares, and public places within the limits of the municipality of Ilagan, Isabela, poles, wires, and all other necessary apparatus and appurtenances for the transmission and distribution of electric current for electric power, heat, and light and any other use to which electricity may be put, and to furnish electric power, heat, and light within said municipality of Ilagan, Province of Isabela, for municipal, domestic, or manufacturing uses and for any other use to which electricity may be put, and to charge and collect a schedule of prices and conventional rates for the use of same: Provided, That said prices shall always be subject to rules provided by act of the Philippine Legislature or by the entities or authorities authorized by law, and shall in no case exceed thirty centavos per kilowatt.

SEC. 2. The poles erected by the grantee shall be of such a height as to maintain the wires stretched on the same at a distance of at least twenty feet above the level of the ground and shall be of such appearance as not to disfigure the streets, and shall be placed in accordance with a plan approved by the provincial or municipal authorities, represented by the provincial governor or municipal president, as the case may be, and said grantee shall supply electric power, heat, and light to any applicant for the same, within fifteen days after the date of his application, and as between such applicant and other like applicants, in the order of the date of his application, up to the limit of the capacity of the plant of said grantee, to be determined by the electrical engineer of the Public Service Commission, on the application of said company or grantee, and should the demand for electric power, heat, and light at any time increase beyond the capacity of the plant of said grantee to supply the same, the capacity of said plant shall be increased by said grantee to meet such demand, in accordance with the decision of the Public Service Commission or its legal successor: Provided, however, That in case the point at which the electric light, heat, or power is to be supplied, is more than eighty meters from the lines or wires operated by said grantee, the latter shall not be obliged to furnish said service.

SEC. 3. All apparatus and appurtenances used by the grantee shall be modern and first class in every respect, and said wires shall be insulated and carefully connected and fastened so as not to come in direct contact with any object through which a "ground" could be formed, and shall be stretched so as not to interfere with the free use of said streets and public thoroughfares nor cause any injury to the public, danger of fire, or damage and inconvenience to the owners of property: Provided, That in  the maintenance and operation of its plant and system for the transmission and distribution of electric current, the miss grantee shall always be subject to such reasonable regulations as the municipal council of Ilagan and the provincial board of Isabela may promulgate in the premises, and also to the regulations prescribed by the National Electric Code of America: Provided, further, That the grantee shall  whenever the Philippine Legislature, upon recommendation or of the Public Service Commission or its legal successor, so directs, place said wires in underground pipes or conduits at its own expense, and without any cost and prejudice to the municipality above mentioned.

SEC. 4. Whenever it shall be necessary in the erection of said poles to take up any portion of the sidewalks or dig up the ground of the public streets or thoroughfares, then the said grantee shall, after said poles are erected, 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 erection of said poles, 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 Isabela 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 poles, such change shall be made by the grantee, its successors or asigns, at their expense, without delay, and said poles shall be placed where directed by said provincial board or said municipal council.

SEC. 5. Whenever any person has obtained permission « to use any of the streets or public thoroughfares of the wir municipality above mentioned for the purpose of removing any building or in the prosecution of any municipal work or for any other just cause whatsoever, making it necessary to raise or remove any of said poles or electric wires which may obstruct the removal of said building or hinder the prosecution of said work, the said grantee, upon written notice by the municipal president of said municipality  served upon said grantee at least forty-eight hours in advance, shall raise or remove any of said wires which may hinder the prosecution of such work or obstruct the removal of said building so as to allow the free and unobstructed passage of said building and the free and unobstructed prosecution of said work, and the person or entity at whose request the building has been moved or the construction undertaken, shall pay one-half of the actual cost of removing or raising and of replacing the poles, wires, and other overhead or underground conductors. The notice shall be served in the usual form, and in case of the refusal or failure of the grantee to comply with such notice, said municipal president, with the proper approval of the municipal council first had, shall order such poles or wires to be raised or removed at the expense of said grantee, for the purpose aforesaid: Provided, however, That the grantee may appeal from any such decision to the provincial board of Isabela, whose decision shall be final.

SEC. 6. The grantee shall be liable to the municipality of Ilagan 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 poles and wires in a safe condition.

SEC. 7. Said grantee shall file its written acceptance of this franchise with the Secretary of Commerce and Communications within ninety days from the date when it obtained the certificate required by section one of this Act and shall commence work within six months' time from and after the date of filing such acceptance and 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 electric light, heat, and power service, and in consideration of the franchise hereby granted, the grantee shall pay quarterly into the municipal treasury of Ilagan one per centum of the gross earnings of its electrical business during the first twenty years, and two per centum during the remaining thirty years of the life of this franchise.

SEC. 8. At the time of filing the acceptance mentioned in the last preceding section, the grantee shall deposit in the Insular Treasury one thousand pesos Philippine currency as an earnest of the good faith of its application, and within six months thereafter it shall deposit in the Insular Treasury the additional sum of nine thousand pesos Philippine currency as a guaranty of the faithful performance of the conditions mentioned in this section, and in case said deposit of nine thousand pesos Philippine currency is not made within six months after the date of filing said acceptance, the sum of one thousand pesos already deposited shall be forfeited to the municipality of Ilagan. In case, after the deposit of said sum of nine thousand pesos, the work to be done under this franchise is not begun within the time specified, or is not completed within the time provided, both said deposits shall be forfeited to the municipality of Ilagan as damages for the breach of contract involved in the acceptance of the franchise, and this fran­chise shall become null and void. In case of the fulfillment of the conditions prescribed by this section, both said de­posits of one thousand and nine thousand pesos shall be returned by the Insular Treasurer to the grantee, upon proper certificate of the electrical engineer of the Public Service Commission of the fulfillment of said conditions: Provided, That if work shall be begun by the grantee within the time specified, the funds deposited may be returned to the grantee as the work progresses, in monthly or quarterly installments, in the discretion of the municipal authorities, in the proportion which the work done bears to the work to be done: Provided, further, That the Insular Treasurer may accept duly executed bonds of a fidelity company in lieu of the cash deposits by this section required.

SEC. 9. The municipality of Ilagan shall have the privilege, without compensation, of using the poles of the grantee for the purpose of installing, maintaining, and operating a telephone or fire and police alarm system, but the wires of such telephone or fire and police alarm system shall be placed and stretched in such manner as to cause no interference with or damage to the wires of the electric service of the grantee.

SEC. 10. 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 corporation 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. 11. The grantee is 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 grantee declare any stock or bond dividend.

SEC. 12. The books and accounts of the grantee shall 1$ always be open to the inspection of the provincial treasurer of Isabela 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. 13. The grantee shall pay on its 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. 14. The grantee herein shall not, without the approval of the Public Service Commission 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, granting, 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 the terms and conditions imposed upon the grantee by this franchise, and to accept the same subject to all existing terms and conditions: item Provided, further, That in case of any national emergency affecting and endangering the public safety and order, the Government of the Philippine Islands shall have the right to take possession of the electric light system, as provided in this Act, and operate the same until such emergency shall have passed.

SEC. 15. 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. 16. 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 its plant, poles, wires, buildings, real estates, 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 its true worth on the books, making the proper deduction for depreciation; in part on the cost of the actual reproduction of said property, less depreciation, and in part on the original cost of said property, less depreciation, of the valuation to be determined, after hearing evidence, by the Supreme Court of the Philippine Islands, sitting as a board of arbitrators, whose decision, by a majority of the members thereof, shall be final.

SEC. 17. Wherever in this franchise the term "grantee" is used it shall be held and understood to mean and represent the sociedad anonima denominated "Ilagan Electric and Ice Plant, Incorporated," its representatives, successors, and assigns.

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

Approved, December 5, 1927.