G.R. No. 45834 ; August 10, 1938
SOICHI FURUGEN TRANSPORTATION, petitioner-appellant, vs. THE PUBLIC SERVICE COMMISSION, respondent-appellee.

FACTS

Soichi Furugen, a Japanese subject, applied to the Public Service Commission for approval of freight and passenger rates for his launches, Tatraco 7 and Kentucky, operating in Davao. After hearings, the Commission dismissed his application and ordered the suspension of the launches’ operation as public services. Furugen appealed, arguing he had a vested right to operate the launches as he was doing so before the 1935 Constitution and Commonwealth Act No. 146 took effect, and that the Commission lacked jurisdiction to suspend operations.

ISSUE

1. Whether the Public Service Commission has the power to suspend the operation of vessels.
2. Whether Furugen is entitled to continue operating his launches as a public service, thereby requiring the Commission to rule on the reasonableness of his submitted rates.

RULING

1. No, the Public Service Commission exceeded its jurisdiction in ordering the suspension. Under Section 13 of Commonwealth Act No. 146 , the Commission’s jurisdiction over ships is limited to the fixing of freight and passenger rates. The exclusive authority over the registration, documentation, and operation of vessels resides with the Bureau of Customs under the Revised Administrative Code.
2. The case is remanded to the Commission for further proceedings. The Court held that if Furugen can prove his launches were operated as a public service before the 1935 Constitution took effect (November 15, 1935), the constitutional prohibition against aliens operating public utilities would not apply, and the Commission would then have to rule on the reasonableness of his rates. The evidence presented (certificates of ownership and a charter party) did not establish such prior operation. The appealed decision was reversed, and the Commission was ordered to hold a new hearing for Furugen to present additional evidence on this pivotal fact.

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