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The “kabit system” has been defined as an arrangement 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. (Lisa Enterprise Inc. v. IAC)
Is the ‘kabit system’ legal?
Although not penalized outright as a criminal offense, the “kabit system” is invariably recognized as
being contrary to public policy and, therefore, void and inexistent under Art 1409 of the Civil Code.
“Kabit System” has been identified as one of the root causes of graft and corruption in the government
transportation offices. It is a “pernicious system” that cannot be too severely condemned. It constitutes an
imposition upon the good faith of the government. It is an abuse of a certificate of public convenience,
which is a special privilege granted by the government (Teja Marketing v. IAC).
under such franchise for a fee. (Lisa Enterprise Inc. v. IAC)
Is the ‘kabit system’ legal?
Although not penalized outright as a criminal offense, the “kabit system” is invariably recognized as
being contrary to public policy and, therefore, void and inexistent under Art 1409 of the Civil Code.
“Kabit System” has been identified as one of the root causes of graft and corruption in the government
transportation offices. It is a “pernicious system” that cannot be too severely condemned. It constitutes an
imposition upon the good faith of the government. It is an abuse of a certificate of public convenience,
which is a special privilege granted by the government (Teja Marketing v. IAC).
