• When an obligation, regardless of its
source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is
breached, the contravenor can be held
liable for payment of interest in the
concept of actual and compensatory
damages, subject to the rule that - when
the judgment of the court awarding a
sum of money becomes final and
executory, the rate of legal interest, shall
be 12% per annum from such finality
until its satisfaction. (Spouses Cruz v. Sun
Holidays, Inc.)
• In the event that the goods are lost,
destroyed or deteriorated, it is
presumed to have been at fault or to
have acted negligently, unless it proves
that it observed extraordinary diligence.
The extraordinary diligence in the
vigilance over the goods tendered for
shipment requires the common carrier
to know and to follow the required
precaution for avoiding damage to, or
destruction of the goods entrusted to it
for sale, carriage and delivery. It requires
common carriers to render service with
the greatest skill and foresight and "to
use all reasonable means to ascertain
the nature and characteristics of goods
tendered for shipment, and to exercise
due care in the handling and stowage,
including such methods as their nature
requires." (A.F. Sanchez Brokerage, Inc.
v. Court of Appeals)
• Travel agency is not a common carrier.
Contract between the travel agency and
its client is one for services and not one
of carriage. (Crisostomo v. Court of
Appeals)
• A certificate of public convenience is not
a requisite for the incurring of liability
under the Civil Code provisions
governing common carriers. That
liability arises the moment a person or
firm acts as a common carrier, without
regard to whether or not such carrier has
also complied with the requirements of
the applicable regulatory statute and
implementing regulations and has been
granted a certificate of public
convenience or other franchise. (De
Guzman v. Court of Appeals)
Common carriers are responsible for the
loss, destruction or deterioration of the
goods which they carry, unless the same
is due to any of the following causes
only: FAACO
(1) Flood, storm, earthquake,
lightning, or other natural
disaster or calamity;
(2) Act of the public enemy in war,
whether international or civil;
(3) Act or omission of the shipper or
owner of the goods;
(4) The character of the goods or
defects in the packing or in the
containers; and
(5) Order or act of competent
public authority.
• The test for determining whether a party
is a common carrier of goods is: EUMT
1. He must be engaged in the
business of carrying goods for
others as a public employment,
and must hold himself out as
ready to engage in the
transportation of goods for
person generally as a business
and not as a casual occupation;
 2. He must undertake to carry
goods of the kind to which his
business is confined;
3. He must undertake to carry by
the method by which his
business is conducted and over
his established roads: and
4. The transportation must be for
hire.
(First Philippine Industrial Corp. v. Court
of Appeals)
• The registered owner of a motor vehicle
is primarily responsible for the damage
caused to the vehicle of the plaintiff but
the registered owner has a right to be
indemnified by the real or actual owner
of the amount that he may be required
to pay as damage for the injury caused
to the plaintiff-appellant.
The principle upon which this doctrine is
based is that in dealing with vehicles
registered under the Public Service Law,
the public has the right to assume or
presume that the registered owner is
the actual owner thereof, for it would be
difficult for the public to enforce the
actions that they may have for injuries
caused to them by the vehicles being
negligently operated if the public should
be required to prove who the actual
owner is. (Erezo v. Jepte)
• The kabit system is an arrangement
whereby a person who has been granted
a certificate of public convenience
allows other persons who own motor
vehicles to operate them under his
license, sometimes for a fee or
percentage of the earnings.
Although the parties to such an
agreement are not outrightly penalized
by law, the kabit system is invariably
recognized as being contrary to public
policy and therefore void and inexistent
under Art. 1409 of the Civil Code. (Lim v.
Court of Appeals)
• The parties herein operated under an
arrangement, commonly known as the
"kabit system" whereby a person who
has been granted a certificate of public
convenience allows another person who
owns motor vehicles to operate under
such franchise for a fee.
A certificate of public convenience is a
special privilege conferred by the
government. Abuse of this privilege by
the grantees thereof cannot be
countenanced. The "kabit system" has
been identified as one of the root causes
of the prevalence of graft and corruption
in the government transportation
offices. (Teja Marketing v. Intermediate
Appellate Court)
• It is a fundamental principle that the
court will not aid either party to enforce
an illegal contract, but will leave them
both where it finds them. Having
entered into an illegal contract, neither
can seek relief from the courts, and each
must bear the consequences of his acts.
(Lita Enterprises, Inc. v. Intermediate
Appellate Court)
• The main purpose of vehicle registration
is the easy identification of the owner
who can be held responsible for any
accident, damage or injury caused by the
vehicle. Easy identification prevents
inconvenience and prejudice to a third
party injured by one who is unknown or
unidentified. (Villanueva v. Domingo)
• An employer may be held solidarily liable
for the negligent act of his employee.To
exempt from liability the owner of a
public vehicle who operates it under the
"boundary system" on the ground that
he is a mere lessor would be not only to
abet flagrant violations of the Public
Service Law, but also to place the riding
public at the mercy of reckless and
irresponsible drivers. (Spouses
Hernandez v. Spouses Dolor)
or it was at fault or acted negligently
would stand.
No device, whether by stipulation,
posting of notices, statements on
tickets, or otherwise, may dispense with
or lessen the responsibility of the
common carrier. (Spouses Pereña v.
Spouses Zarate)

• Even if the vehicle has already been sold,

leased, or transferred to another person
at the time the vehicle figured in an
accident, the registered vehicle owner
would still be liable for damages caused
by the accident. The policy behind the
rule is to enable the victim to find
redress by the expedient recourse of
identifying the registered vehicle owner
in the records of the Land
Transportation Office. (FEB Leasing and
Finance Corp. v. Spouses Baylon)

• The essential feature of the public use is

not confined to privileged individuals,
but is open to the indefinite public. It is
this indefinite or unrestricted quality
that gives it its public character.

The common carrier should "carry the

passengers safely as far as human care
and foresight can provide, using the
utmost diligence of very cautious
persons, with a due regard for all the
circumstances." To successfully fend off
liability in an action upon the death or
injury to a passenger, the common
carrier must prove his or its observance
of that extraordinary diligence;
otherwise, the legal presumption that he