Law Summary

1. Franchise Grant

• Legal Principle/Provision: The Act grants a franchise to Lizarraga Hermanos to establish, construct, maintain, and operate a railroad between Kabankalan and Hog, Occidental Negros.
• Key Definitions:
  • Grantee: Refers to Lizarraga Hermanos.
• Requirements/Procedures:
  • The franchise is valid for ninety-nine years.
  • Must obtain a certificate of public necessity from the Public Utility Commission before the franchise takes effect.
  • Application for the certificate must be made within three months of the Act's approval.
• Timeframes:
  • If the application is not made within three months, the franchise is null and void.
• Penalties: None specified for the initial failure to apply, but the franchise lapses.

2. Special Conditions

• Legal Principle/Provision: Acceptance of the franchise is contingent on the grantee's adherence to specific political conditions.
• Key Definitions: None additional.
• Requirements/Procedures:
  • The grantee must acknowledge the messages from the President of the United States and the Philippine Assembly regarding political aspirations, and commit not to support anti-government propaganda.
  • This commitment must extend to the grantee's administrators, agents, successors, and assigns.
• Penalties: Failure to comply may lead to revocation of the franchise.

3. Rights and Powers of the Grantee

• Legal Principle/Provision: Enumerates the rights, powers, and exemptions granted to the grantee.
• Key Definitions: None additional.
• Requirements/Procedures:
  • Right of way through public lands with Governor-General approval.
  • Ability to cross or occupy public roads with necessary permissions.
  • Right to acquire land necessary for operations via purchase or expropriation.
• Important Details:
  • The grantee can transfer or lease the franchise with conditions.
  • Exempt from certain taxes and duties for imports necessary for railroad construction.
• Penalties: None specified.

4. Duties and Obligations of the Grantee

• Legal Principle/Provision: Lists the responsibilities the grantee must fulfill.
• Key Definitions: None additional.
• Requirements/Procedures:
  • Install gates at crossings, maintain telegraph lines, and carry mail free of charge.
  • Equip locomotives with safety devices and adhere to speed limits.
  • Establish reasonable baggage allowances and maintain detailed records of operations.
• Timeframes:
  • Notify the Director of Public Works before opening sections of the railroad.
• Penalties: None specified for failure to comply with these duties.

5. Restrictions of the Franchise

• Legal Principle/Provision: Outlines limitations imposed on the franchise.
• Key Definitions: None additional.
• Requirements/Procedures:
  • The grantee must allow other railroads to cross its line under proper indemnity.
  • Subject to amendments by the Philippine Legislature.
• Important Details:
  • Restrictions on the issuance of stock or bonds.
  • Upon termination, land rights revert to the relevant government authorities.

6. Railroad Standards and Conditions

• Legal Principle/Provision: Specifies construction standards for the railroad.
• Key Definitions: None additional.
• Requirements/Procedures:
  • Maximum grade of 2% and minimum curve radius of 200 meters.
  • Use of quality materials in construction, including steel rails and wooden ties.
• Penalties: None specified.

7. Financial Obligations and Deposits

• Legal Principle/Provision: Requires a financial deposit related to the franchise.
• Key Definitions: None additional.
• Requirements/Procedures:
  • A deposit of fifty pesos per kilometer must be made within 120 days of acceptance of the franchise terms.
  • This deposit will be forfeited if construction begins later than two years or is not completed within five years, unless hindered by force majeure.
• Penalties: Forfeiture of the deposit under specified conditions.

8. Earnings and Government Compensation

• Legal Principle/Provision: Establishes compensation to be paid to the government based on earnings.
• Key Definitions: None additional.
• Requirements/Procedures:
  • The grantee must pay a percentage of gross earnings to the Insular Treasury.
• Important Timeframes:
  • 0.5% for the first 30 years, 1% for the next 50 years, and 2% thereafter.
• Penalties: Non-compliance may lead to government audits and potential penalties.

9. Acceptance Timeline

• Legal Principle/Provision: Specifies the timeframe for the grantee's acceptance of the franchise.
• Key Definitions: None additional.
• Requirements/Procedures:
  • Acceptance must be filed within 60 days after obtaining the necessary certificate.
• Penalties: Failure to accept within the timeframe renders the franchise ineffective.

10. Effective Date

• Legal Principle/Provision: States when the Act takes effect.
• Key Definitions: None additional.
• Requirements/Procedures:
  • The Act will take effect upon approval.
• Penalties: None specified.

Key Takeaways

• Lizarraga Hermanos is granted a 99-year franchise to operate a railroad with specific rights and obligations.
• The franchise is contingent upon compliance with political conditions and various operational standards.
• Financial deposits and government compensation are mandated, with strict adherence to timelines and protocols for acceptance and operation.
• The Act is subject to amendments and regulatory oversight by the Philippine government authorities.