Given the breadth of the aforequoted characterization of a common carrier, the Court has

considered as common carriers pipeline operators,18 custom brokers and

warehousemen,19 and barge operators20 even if they had limited clientèle.

KABIT SYSTEM
Unquestionably, 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.

Although not outrightly penalized as a criminal offense, the kabit system is invariably
recognized as being contrary to public policy and, therefore, void and in existent under Article
1409 of the Civil Code. It is a fundamental principle that the court will not aid either party to
enforce an illegal contract, but will leave both where it finds then.

Art. 1412. If the act in which the unlawful or forbidden cause consists does not constitute a
criminal offense, the following rules shall be observed: 
1. When the fault is on the part of both contracting parties, neither may recover
that he has given by virtue of the contract, or demand, the performance of the other's
undertaking.
(TEJA MARKETING VS IAC)

Erezo v. Jepte7: 
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. How would the public or third
persons know against whom to enforce their rights in case of subsequent transfers of the
vehicles? We do not imply by his doctrine, however, that the registered owner may not recover
whatever amount he had paid by virtue of his liability to third persons from the person to
whom he had actually sold, assigned or conveyed the vehicle.
Under the same principle the registered owner of any vehicle, even if not used for a public
service, should primarily be responsible to the public or to third persons for injuries caused the
latter while the vehicle is being driven on the highways or streets. The members of the Court are
in agreement that the defendant-appellant should be held liable to plaintiff-appellee for the
injuries occasioned to the latter because of the negligence of the driver, even if the defendant-
appellant was no longer the owner of the vehicle at the time of the damage because he had
previously sold it to another. What is the legal basis for his (defendant-appellant's) liability?
One of the principal purposes of motor vehicles legislation is identification of the vehicle and of
the operator, in case of accident; and another is that the knowledge that means of detection
are always available may act as a deterrent from lax observance of the law and of the rules of
conservative and safe operation.

A registered owner who has already sold or transferred a vehicle has the recourse to a
third-party complaint, in the same action brought against him to recover for the
damage or injury done, against the vendee or transferee of the vehicle. The
inconvenience of the suit is no justification for relieving him of liability; said
inconvenience is the price he pays for failure to comply with the registration that the
law demands and requires.

In synthesis, we hold that the registered owner, the defendant-appellant herein, is

primarily responsible for the damage caused to the vehicle of the plaintiff-appellee, but
he (defendant-appellant) 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

BOUNDARY SYSTEM

On the other hand, Article 2176 provides –

Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.

Article 2180 provides: Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their assigned
tasks, even though the former are not engaged in any business or industry.

Indeed 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 — reckless because the measure of their
earnings depends largely upon the number of trips they make and, hence, the speed at
which they drive; and irresponsible because most if not all of them are in no position to
pay the damages they might cause

REGISTERED OWNER FEB LEASING VS SPS BAYLON

SEC 5 ACT 4136 – VEHICLES SHOULD BE REGISTERED WITH LTO

Well-settled is the rule that the registered owner of the vehicle is liable for quasi-delicts
resulting from its use. Thus, 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
sale, transfer or lease of the vehicle, which is not registered with the Land
Transportation Office, will not bind third persons aggrieved in an accident involving the
vehicle. The compulsory motor vehicle registration underscores the importance of
registering the vehicle in the name of the actual owner.

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. The registered owner can be reimbursed by the actual owner,
lessee or transferee who is known to him. Unlike the registered owner, the innocent
victim is not privy to the lease, sale, transfer or encumbrance of the vehicle. Hence, the
victim should not be prejudiced by the failure to register such transaction or
encumbrance. As the Court held in PCI Leasing:

The burden of registration of the lease contract is minuscule compared to the chaos
that may result if registered owners or operators of vehicles are freed from such
responsibility. Petitioner pays the price for its failure to obey the law on compulsory
registration of motor vehicles for registration is a pre-requisite for any person to even
enjoy the privilege of putting a vehicle on public roads.

SPS PERENA VS SPS NICOLAS AND ZARATE

As earlier stated, the Pereñas, acting as a common carrier, were already presumed to
be negligent at the time of the accident because death had occurred to their passenger.
The presumption of negligence, being a presumption of law, laid the burden of evidence
on their shoulders to establish that they had not been negligent. 26 It was the law no less
that required them to prove their observance of extraordinary diligence in seeing to the
safe and secure carriage of the passengers to their destination. Until they did so in a
credible manner, they stood to be held legally responsible for the death of Aaron and
thus to be held liable for all the natural consequences of such death.

Article 1732 of the Civil Code coincides neatly with the notion of public service under
the Public Service Act, which supplements the law on common carriers found in the Civil
Code. Public service, according to Section 13, paragraph (b) of the Public Service Act,
includes:

x x x every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientèle, whether
permanent or occasional, and done for the general business purposes, any common
carrier, railroad, street railway, traction railway, subway motor vehicle, either for
freight or passenger, or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service, steamboat, or
steamship line, pontines, ferries and water craft, engaged in the transportation of
passengers or freight or both, shipyard, marine repair shop, ice-refrigeration plant,
canal, irrigation system, gas, electric light, heat and power, water supply and power
petroleum, sewerage system, wire or wireless communications systems, wire or
wireless broadcasting stations and other similar public services.

DILIGENCE OF A GFOAF IN SELECTING AND SUPERVISION OF EMPLOYEES IS

NOT A DEFENSE IN A COMMON CARRIER.
Baliwag corp vs ca

Release of claims

We hold that since the suit is one for breach of contract of carriage, the Release of
Claims executed by him, as the injured party, discharging Fortune Insurance and
Baliwag from any and all liability is valid. He was then of legal age, a graduating
student of Agricultural Engineering, and had the capacity to do acts with legal effect
(Article 37 in relation to Article 402, Civil Code). Thus, he could sue and be sued even
without the assistance of his parents. 

Significantly, the contract of carriage was actually between George, as the paying
passenger, and Baliwag, as the common carrier. As such carrier, Baliwag was bound to
carry its passengers safely as far as human care and foresight could provide, and is
liable for injuries to them through the negligence or wilful acts of its employees (Articles
1755 and 1759, Civil Code). Thus, George had the right to be safely brought to his
destination and Baliwag had the correlative obligation to do so. Since a contract may be
violated only by the parties thereto, as against each other, in an action upon that
contract, the real parties in interest, either as plaintiff or as defendant, must be parties
to said contract 

For damage or injuries arising out of negligence in the operation of a motor vehicle, the
registered owner may be held civilly liable with the negligent driver either
1) subsidiarily, if the aggrieved party seeks relief based on a delict or crime under
Articles 100 and 103 of the Revised Penal Code; or 2) solidarily,  if the complainant
seeks relief based on a quasi-delict under Articles 2176 and 2180 of the Civil Code. It is
the option of the plaintiff whether to waive completely the filing of the civil action, or
institute it with the criminal action, or file it separately or independently of a criminal
action;15 his only limitation is that he cannot recover damages twice for the same act or
omission of the defendant.

PCI LEASING VS CA
For damage or injuries arising out of negligence in the operation of a motor vehicle, the
registered owner may be held civilly liable with the negligent driver either 1) subsidiarily, if the
aggrieved party seeks relief based on a delict or crime under Articles 100 and 103 of the
Revised Penal Code; or 2) solidarily, if the complainant seeks relief based on a quasi-
delict under Articles 2176 and 2180 of the Civil Code. It is the option of the plaintiff whether to
waive completely the filing of the civil action, or institute it with the criminal action, or file it
separately or independently of a criminal action; his only limitation is that he cannot recover
damages twice for the same act or omission of the defendant.
Under this policy, the evil sought to be avoided is the exacerbation of the suffering of victims of
tragic vehicular accidents in not being able to identify a guilty party. A contrary ruling will not
serve the ends of justice. The failure to register a lease, sale, transfer or encumbrance, should
not benefit the parties responsible, to the prejudice of innocent victims.
 o YES L. Corp is a common carrier. Article 1732 of the New Civil Code defines a
common a carrier as persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or
air, for compensation, offering their services to the public. With the given definition
it was held In De Guzman vs. Court of Appeals, that the given definition in Article 1732
does not distinguish between one whose principal business activity is the carrying of persons
or goods or both, and one who does such carrying only as an ancillary activit nor doest it
make any distinction h between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an occasional, episodic or
unscheduled basis. Further, it was ruled that Article 1732 does not distinguish between a
carrier offering its services to the general public, and one who offers services to limited
clientele. The concept of common carrier also coincide with the notion. “Public Service” under
Public Service Act.
o In the case at bar, The pumping of water from the ocean and transporting it to the
the pool of w is intertwined with its main business as to be
properly considered ancillary thereto. The said services was also then made available to the
friends of W who can afford to pay the same. These services are then considered available to
the public. Hence, L Corp may be properly characterized as common carrier.
Its ferry services are so intertwined with its main business as to be
properly considered ancillary thereto.

o ABC and GGG Corporation are common carriers. Article 1732 of the New Civil Code
defines a common a carrier as persons, corporations, firms or associations engaged in
the business of carrying or transporting passengers or goods or both, by land, water, or
air, for compensation, offering their services to the public. The test whetin Bascos vs CA
o Applying this principle to the case, ABC, hold