Section 1. There is hereby granted to "Philippine Aerial Taxi
Company, Incorporated," hereinafter referred to as the grantee, a
franchise to establish, operate and maintain an air transport service,
for the transportation of passengers, mail and property by means of
aircraft, in or between the following provinces: Manila, Baguio,
Camarines Norte, and Cagayan. Manila and Baguio shall be understood to
mean the cities of Manila and Baguio or any point near the same.
Sec. 2. Excepting cases of force majeure and
whenever weather conditions permit, the grantee shall maintain a
regular air service between Manila and Baguio, with not less than one
regular daily round trip during the months from December to April, both
inclusive, and at least two round trips weekly during the rest of the
year, and on the other lines with at least one regular round trip every
two months.
Sec. 3. The grantee shall fix just, reasonable and
uniform rates for the transportation of passengers and freight, subject
to the supervision and approval of the Public Service Commission. Any
order of the Public Service Commission made under this section shall be
subject to review by the Supreme Court in the same manner as the
decisions of said Commission in other cases.
All aircraft used by the grantee shall be licensed by the Government of
the Philippines and, together with its accessories and equipment, shall
be at all times modern, safe and first class; it shall be provided with
a radio transmitting set and, whenever the voyage is in excess of three
hours, it shall carry a pilot and an assistant and shall have as many
life preserved as there shall be passengers.
The service and equipment of the grantee shall be at all time subject
to inspection and supervision by the Department of Public Works and
Communications whose decisions shall be binding until revoked or
annulled by the courts for excess or abuse of jurisdiction.
The grantee shall comply with the provisions of Act Numbered
Thirty-nine hundred and nine, as amended by Act Thirty-nine hundred and
ninety-six, and the regulations promulgated thereunder from time to
time.
Sec. 4. Subject to such terms and conditions as
the Philippine Government may prescribe, the grantee may use such
landing and replenishment facilities on land or water as may be
maintained or owned by the Government within the Philippines on the
grantee's lines, excepting those which, in the opinion of said
Government, may not be used by the grantee because of military or naval
considerations, and, reciprocally, the Philippine Government shall have
the right to use the landing and replenishment facilities on land or
water maintained or owned by the grantee in the Philippines.
Sec. 5. The grantee shall have the right, at its
terminals and landing fields, as well as in its aircrafts, to
construct, operate and maintain stations or transmitting sets for
wireless telegraphy and direction finding, and other radio aids to air
navigation using such wave lengths as shall be in accordance with the
rules and regulations made from time to time by the Philippine
Government; but the wireless communication facilities shall be used
solely for receiving and transmitting weather forecasts and messages
relating to the grantee's aircraft and other matters in connection with
the grantee's services.
Sec. 6. The grantee is authorized to enter into
transportation contracts with the Philippine Government, including the
carrying of mail, upon terms and conditions to be mutually agreed upon.
In the absence of an agreement, the rates shall be fixed by the Public
Service Commission. The grantee shall give preferential attention to
contracts with the Philippine Government.
Sec. 7. In case of war, insurrection, domestic
trouble, public calamity or national emergency, the Philippine
Government upon order of its Chief Executive, shall have the right to
take over and operate the equipment of the grantee, paying for such use
or damages.
Sec. 8. The grantee shall be subject to the laws
of the Philippines now existing or hereafter enacted.
Sec. 9. With the approval of the Chief Executive
of the Philippine Government, and subject to the limitations and
procedure prescribed by law, the grantee shall be authorized to
exercise the right of eminent domain as may be reasonably necessary for
its stations, landing fields, hangars, docks, ramps, wireless stations
and other structures in connection with the grantee's activities.
No private property shall be taken for any purpose by the grantee
without proper condemnation proceedings and just compensation paid or
tendered therefor, and any authority to take and occupy land contained
herein shall not apply to the taking, use or occupation of any land
except such as is required for the actual purposes for which this
franchise is granted.
Sec. 10. The grantee shall not issue stock or
bonds except in exchange for actual cash or for property at least equal
in value to the par value of the stock or bonds so issued, and shall
not declare stock or bond dividends.
Sec. 11. It shall be unlawful for the grantee to
use, employ, or contract for the labor of persons held in involuntary
servitude.
Sec. 12. The grantee shall hold the Insular,
provincial, and municipal governments of the Philippines harmless from
all claims, accounts, demands, or actions arising out of accidents or
injuries, whether to property or to persons, caused by the operation of
the service under the franchise hereby granted.
Sec. 13. In consideration of the franchise and
rights hereby granted, the grantee shall pay to the Insular Government
during the first ten years of the life of this franchise a tax of one
percent of the gross revenue derived by the grantee from its operation
under this franchise; and during the last fifteen years of the life of
this franchise a tax of two per cent of such gross revenue. Such tax
shall be due and payable quarterly and shall be in lieu of all taxes,
of any kind, nature or description, levied, established or collected by
any municipal, provincial or Insular authority. The grantee shall pay
the tax on its real property in conformity with existing law.
Sec. 14. The grantee shall keep account of the
gross receipts of the business transacted by it and shall furnish to
the Insular Auditor and the Insular Treasurer a copy of such account
quarterly, during the month next following the close of the quarter.
For the purpose of auditing accounts so rendered to the Insular Auditor
and Treasurer, all the books and accounts of the grantee, and
duplicates thereof, shall be kept in the Philippines, and shall be
subject to the inspection of the Insular Auditor or his authorized
representatives. The audit and approval of such accounts by the Bureau
of Audits shall be final and conclusive evidence as to the amount of
said gross receipts, except that the grantee shall have the right to
appeal to the courts of the Philippines and the Supreme Court of the
United States, under the terms and conditions provided in the laws of
the Philippines and the Act of the United States Congress of March
twenty-fourth, nineteen hundred and thirty-four.
The words "gross receipts" are herein defined as the total receipts
obtained by the grantee from its operation under this franchise.
Sec. 15. This franchise is granted with the
understanding that the grantee is a corporation sixty per cent of the
capital stock of which is the bona fide property of citizens of the
Philippines and/or the United States, and that the interest of such
citizens in its capital stock or in the capital of the company with
which it may merge shall at no time be allowed to fall below such
percentage, under the penalty of the cancellation of this franchise.
Sec. 16. This franchise shall not be interpreted
to mean an exclusive grant of the privileges herein provided
for.
Sec. 17. This franchise is granted with the
understanding that it shall be subject to amendment, alteration, or
repeal by the Philippine Legislature or, pending the inauguration of
the Commonwealth of the Philippines, by the Congress of the United
States.
Sec. 18. The term of this franchise shall be
twenty-five years from the date of the acceptance of this Act by the
grantee.
Sec. 19. This franchise shall not be valid unless
the grantee accepts the same within six months after its approval,
filing such acceptance in writing with the Secretary of Public Works
and Communications.
Sec. 20. The grantee shall execute a bond of two
thousand pesos in favor of the Philippine Government, in a form and
with sureties satisfactory to the Secretary of Public Works and
Communications, conditioned upon the establishment and operation of any
of the lines to Camarines Norte and Cagayan which the grantee may
decide to operate within one year from the acceptance of this
franchise. If the grantee shall fail to execute such bond and commence
operation on any of said lines within the term mentioned, the franchise
shall be ipso facto cancelled as regards the line abandoned. After a
year of satisfactory operation of a bonded line, the bond thereof shall
be cancelled by the Secretary of Public Works and Communications.
Sec. 21. The grantee shall not, without the
previous approval of the Philippine Legislature, lease, transfer, grant
the usufruct of, sell or assign this franchise and the rights and
privileges acquired thereunder to any person, firm, company,
corporation, or other mercantile or legal entity, nor merge with any
other company or corporation organized for the same or any other
purpose. Any corporation to which this franchise may be sold,
transferred or assigned or with which the grantee may merge, with the
approval above mentioned, shall be subject to the corporation laws of
the Philippines now existing or hereafter enacted, and any person,
firm, company, corporation or other commercial or legal entity to which
this franchise is validly sold, transferred or assigned or with which
the grantee may merge, 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 this franchise had been originally granted
to the said person, firm, company, corporation or other commercial or
legal entity.
Sec. 22. The abandonment by the grantee, for one
year, of any of the lines covered by this franchise shall give rise to
the cancellation of the franchise as regards the line so abandoned,
upon judicial proceedings instituted by the Secretary of Public Works
and Communications.
Sec. 23. If the grantee should commit any
substantial violation of any provision of this Act, it shall forfeit
all its privileges, franchises and grants to engage in business in the
Philippines upon an action or proceeding instituted for said purpose in
any competent court by any officer of the Philippine Government, or by
virtue of a complaint filed by any Philippine citizen, in conformity
with such rules and regulations as the Philippine Legislature may
prescribe, and it shall, besides, be deemed guilty of a violation of
the law and shall be punished by a fine of not more than twenty
thousand pesos, in proceedings identical with those provided for
ordinary civil cases.
Sec. 24. Upon the termination of this franchise by
repeal, forfeiture, annulment or expiration in due course, all public
land and other property and the right to occupy and use the same
granted to the grantee shall revert to the Philippine Government; and
all real property of the grantee not disposed of within two years after
the termination of the franchise shall likewise revert to said
Government.
Sec. 25. This Act shall take effect on its
approval.
Approved: November 14, 1935
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