Act No. 2039






By authority of the United States, be it enacted by the Philippine Commission, that:

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 Thomas D. Aitken, the right and authorization to construct, maintain, and operate in the City of Manila and municipalities of the Province of Rizal a plant for the manufacture of gas, together with the necessary pipes, house installation, and meters requisite or convenient for the proper maintenance of a modern gas plant or system designed for the furnishing of gas for heat, lighting, and power.


SEC. 2.  The said Thomas D. Aitken shall hereafter be referred to as the grantee.


SEC. 3.  (a) The grantee shall have the right and authority, and is hereby authorized, subject to the laws and ordinances now in force, or that hereafter may be in force, not inconsistent herewith, to make in the manner and in the locations designated by the city engineer in the City of Manila and by the district engineer in the Province of Rizal all needful excavations and constructions in or upon any of the streets, thoroughfares, bridges, and public places designated in the next succeeding paragraph for the purpose of laying, placing, removing, and repairing gas mains and connections for the manufacture, generation, conduction, and distribution of gas for said gas system and in the manner and locations approved by the proper authorities, and for building, maintaining, and operating houses, works, and storage tanks therefor.


(b)      The streets, thoroughfares, bridges, and public places upon which the grantee is authorized to make such excavations and place etc. mains are as follows:


On all streets, thoroughfares, and public places wherein it shall be deemed necessary or convenient by the grantee for the maintenance and conduct of a complete gas service:  Provided, however, That the laying and installing of the mains and pipes shall be compulsory on the part of the grantee on any and all streets, thoroughfares, or public places along which a consumption of thirty cubic meters of gas per annum per meter of main pipe shall be guaranteed, and subscriptions for said amount shall be deemed a sufficient guaranty for the purpose of this section:  And provided further, That the grantee shall, within the time provided for the beginning of the operation of the plant by section eleven hereof, have constructed and in operation at least fifty kilometers of main pipe lines.  Plans for the use of the streets and laying of mains and conduits shall be subject to the approval of the city engineer in the City of Manila and of the district engineer in the Province of Rizal.


Mains may be placed on or under such bridges in the said City of Manila as may be indicated by the city engineer, and on or under such bridges in the Province of Rizal as may be indicated by the district engineer.


(c)      All reasonable or necessary and proper changes in the routes of the pipe lines of the grantee may be made by the grantee with the approval and consent of the city engineer of the City of Manila, or of the district engineer of the Province of Rizal, as the case may be.


(d)      The grantee shall hold the City of Manila, the Province of Rizal, and the municipalities of the said province harmless from any and all claims, accounts, demands, or actions which may arise out of accidents or injuries, whether to property or persons, caused by the construction, installation, or operation of the plant, and shall place all streets, thoroughfares, roads, and public places upon which excavations have been made or pipes laid, in the same condition in which they were before making said excavations or laying said pipes.


SEC. 4.  The gas manufactured shall be produced by the use of manufacture of coal, crude oil, or water, or any combination of these elements, but the grantee shall have the right and authority to modify, improve, and “change such method in such manner as the progress of science and improvements in the manufacture of gas may make reasonable and proper”:  Provided, however, That the service shall be in with the laws and ordinances now in force, or that hereafter may be in force.


SEC. 5.  There shall be installed in each house, building, or place using gas of the grantee’s manufacture or production, one or more meters, as may be necessary, at the grantee’s expense.


The meter system employed may be either the ordinary system or that known as the prepayment meter system at the option of the consumer.


SEC. 6.  The quality of the gas furnished to consumers shall not be less than five thousand French calories for one cubic meter of Quality of gas.


SEC. 7.  (a) The price charged by the grantee shall not be more than ten centavos per cubic meter:  Provided, however, That those consumers using the prepayment meter, by a payment of two centavos a cubic meter of gas used in addition to the ten centavos aforesaid, and guaranteeing the grantee an annual consumption of at least two hundred cubic meters of gas, shall have furnished and installed, in addition to the first installment of pipes made by the grantee, a cooking stove and first installation of incandescent burners without extra cost:  And provided further, That until the grantee has been reimbursed the cost of the installation and piping in the consumers’ premises including the meter, the grantee may charge in addition to the above, a rental for the ordinary (not prepayment) meters, as follows:


Where three lights are installed, twenty centavos per month.

Where five lights are installed, thirty centavos per month.

Where ten lights are installed, fifty centavos per month.

Where twenty lights are installed, seventy-five centavos per month.

Where fifty lights are installed, one peso per month.

Where one hundred lights are installed, one peso and fifty centavos per month.

Where two hundred lights are installed, two pesos per month.


The books and records of the grantee shall be so kept as to enable the Auditor to ascertain the facts with reference to such cost and reimbursement.


The meters used shall be first approved by the city engineer of the City of Manila or district engineer for the Province of Rizal, as the case may be, and may be tested by such persons at any time, for which purpose the testing apparatus of the grantee shall at all times be available to these officers.  Costs incurred in inspecting and repairing the said meters after installation shall be paid by the grantee unless such repairs may have been necessitated by the carelessness or design of the consumer.


(b)      It is further provided that instead of the maximum rate of ten centavos per cubic meter as above provided, the following scale of charges shall be imposed as a maximum rate upon all consumers using quantities as herein provided: 


Amount used in cubic meters.


Maximum charge in cubic meters.


First 500.

Excess of 500 up to and including 1,000

Excess of 1,000 up to and including 2,000.

Excess of 2,000 up to and including 5,000

Excess of 5,000 up to and including 10,000

Excess of over 10,000

501 to 1,000

P 0.10

P 0.09





1,001 to 2,000



P 0.84




2,001 to 5,000




P 0.08



5,001 to 10,000





P 0.74


10,001 and over






P 0.07


The word consumer as used above shall be interpreted to mean single individuals, corporations, firms, partnerships, or combinations of individuals, where but one meter is used.  The quantities of gas passing through more than one meter can not be combined in order to receive the benefit of the above rates.


(c)      If, during three consecutive years, the average net earnings of the grantee exceed ten per centum per annum on his invested capital, the maximum rate for the ensuing year or years shall be reduced one-half centavo per cubic meter, and thereafter if in any year the net earnings of the grantee exceed ten per centum on his invested capital, the said maximum rate shall for the succeeding year or years be reduced one-half centavo per cubic meter, and this shall continue until one uniform rate of seven centavos per cubic meter shall have been reached:  Provided, That in no year shall such reduction be made unless the excess has been sufficient so that the reduction of one-half centavo would not have reduced the net earnings of the grantee for the previous year below ten per centum.


SEC. 8.  The rates to be charged as fixed and determined in this franchise shall at all times be subject to revision and regulation by the Board of Rate Regulation created by Act Numbered Seventeen hundred and seventy-nine, or any successor of said Board duly or legally created.


SEC. 9.  The grantee shall pay annually on the fifth day of January of each year to the City of Manila and to the municipalities in the Province of Rizal in which gas is sold, two and one-half per centum of the gross receipts within said city and municipalities, respectively, during the preceding year.   Said payment shall be in lieu of all taxes, Insular, provincial, and municipal, except taxes on the real estate, buildings, plant, machinery, and other personal property belonging to the grantee.

SEC. 10.  The grantee shall keep a record of all gas and other products sold and collections made.   The books and accounts of the grantee shall be kept in the City of Manila and shall be subject to inspection and audit by the proper municipal authorities and the Insular Auditor.


The accounts when audited and approved as herein provided shall be final and conclusive evidence of the liability of the grantee under the provisions of section nine.


SEC. 11.  The grantee shall begin the construction of his plant in the City of Manila within nine months from the date of the granting of the permission to construct by the municipal authorities, and shall begin operation of the plant within fourteen months after the expiration of the said nine months, unless prevented by an act of God, or the public enemy, usurped or military power, martial law, riot, civil commotion or inevitable cause, and shall thereafter maintain a first-class gas, heat, light, and power service.


SEC. 12.  Within ninety days after the passage of this Act the grantee shall pay to the Insular Treasurer the sum of one hundred thousand pesos for and in consideration of the franchise herein granted, which shall be distributed as follows:  Two-sixths to the Insular Government; three-sixths to the City of Manila; and one-sixth to remain in the Insular Treasury for four years, after which it shall be apportioned by the Governor-General equally between the municipalities of the Province of Rizal in which the gas service has been established.


SEC. 13.  To secure the performance of the provisions of section eleven, the grantee shall, within nine months after the passage of this Act, deposit with the Insular Treasurer the sum of fifty thousand pesos in money or securities to be approved by the Governor-General:  Provided, however, That if the deposit be made in money the same shall be deposited at interest in some interest-paying bank and all interest accruing on such deposit shall be collected by the Insular Treasurer and paid to the grantee, his successors or assigns, on demand:  And provided further, That if the deposit made with the Insular Treasurer be negotiable bonds or other interest-bearing securities the interest on the same shall be collected by the Insular Treasurer and paid over to the grantee, his successors or assigns, on demand:  Provided, That the said sum of fifty thousand pesos shall be repaid by the said Treasurer to the grantee in the event of the faithful performance by the grantee of all the conditions of this franchise and of all the obligations herein imposed on the grantee whenever, within the period hereinbefore fixed, three-fourths of the plant, including at least fifty kilometers of pipe lines, covered by this franchise shall have been constructed.

If, however, the grantee shall, within the time required, fail to perform the obligations of his contract, then the Insular Treasurer shall by appropriate action recover as liquidated damages for the breach thereof the sum of fifty thousand pesos so deposited.

SEC. 14.  In the event of any competing gas company receiving either a franchise from the Insular Government or permission and authority from the Municipal Board of the City of Manila to conduct a similar business in the City of Manila as that of the grantee, in which franchise or permission to construct there shall be any term or terms tending to place the grantee at any disadvantage, then such term or terms shall ipso facto become part of the terms hereof and shall operate equally in favor of the grantee as in the case of the said competing company.

SEC. 15.  Subject to the approval of the Governor-General, the grantee may sell, transfer, or assign the franchise herein granted to a corporation formed or to be formed and organized in and under the laws of the Philippine Islands:  Provided, That said corporation shall offer and place on sale in the Philippine Islands, to citizens of the Philippine Islands, at a price not exceeding par, twenty-five per centum of the stock of said corporation.  The offer to sell said stock on said terms shall be duly advertised in the City of Manila, and shall remain open for six months after the date of such advertisement.  After the expiration of that time, any unsold part of said stock may be sold free from such restrictions. 

SEC. 16.  All the terms, conditions, and restrictions required and imposed by section seventy-four of the Act of Congress of July first, nineteen hundred and two, are hereby by reference incorporated in and made a part of this franchise, and the grantee and his successors and assigns take and hold said franchise at all times subject thereto.

SEC. 17.  No stocks or bonds shall be issued by any corporation owning or operating under this grant, 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; nor shall such corporation declare any stock or bond dividend; nor shall any person, company, or corporation receiving this franchise from the Government of the Philippine Islands, or from its grantee, use, employ, or contract for the labor of persons claimed or alleged to be held in involuntary servitude, and any person, company, or corporation violating this provision shall forfeit all charters, grants, franchises, and concessions for doing business in the Philippine Islands, and in addition be deemed guilty of an offense, and punished therefor as provided by law.

SEC. 18.  The franchise herein granted shall be subject to amendment, alteration, or repeal by the Congress of the United States, and upon the termination of this franchise by forfeiture, repeal, or expiration the right to use the streets and other public lands or places herein granted shall revert to the City of Manila, the Province of Rizal or the municipalities thereof, or the Insular Government, as the case may be.

SEC. 19.  If the grantee hereunder, or his successors or assigns, fail to accept this franchise, or pay therefor the sum of one hundred thousand pesos, or make a deposit of fifty thousand pesos, as herein provided, or to construct and put in operation the gas system herein specified within the time required by this Act, the Governor-General, after a hearing duly had, is hereby authorized to declare all the rights in this franchise of the grantee, his successors or assigns, at an end and thereafter to offer for sale to the highest and best bidder a franchise containing substantially the terms and conditions hereof.   At least three months’ public notice of such sale shall be given and the right shall be reserved to reject any and all bids.

SEC. 20.  The public good requiring the speedy enactment of this bill, the same shall take effect on its passage, in accordance with section one of Act Numbered Nineteen hundred and forty-five of the Philippine Legislature.

Enacted, February 3, 1911


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