AGRARIAN LAW NOTES (UNGOS)Chapter 2 The Tenant Emancipation LawPD No. 27

Applicability of the Law

The Tenant Emancipation Law supplements the CARL. Applies only to private agricultural lands primarily devoted to rice and corn under share tenancy or lease-tenancy.

Transfer of Lands to Tenants

PD No. 27 provides that:The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated. --- shall be deemed owner does not mean automatic transfer of title or ownership of the land to the tenant or lessee. There has to be full payment of just compensation before the landowner could be divested of his land, otherwise, the land would be taken without just compensation.

The tenant farmer is entitled to:a. 5 hectares (not irrigated)b. 3 hectares (irrigated)

The land transfer under PD No 27 is effected in 2 stages, namely:

1. Issuance of a Certificate of Land Transfer (CLT)Significance of the CLT: does not vest upon tenant-beneficiary ownership over the land but merely qualifies the tenant-beneficiary to possess the land and comply with certain conditions preparatory to ownership. If tenant-beneficiary complies with the conditions, he is issued an EP.

2. Issuance of Emancipation Patent (EP)Significance of an EP: vests upon the farmer-beneficiary absolute ownership over the landholding. It is a conclusive authority for the issuance of TCT or COT in his name.

EPs become indefeasible and imprescriptible after 1 year from its registration with the Office of the Registry of Deeds, subject to conditions, limitations and qualifications under CARL, the Property Registration Decree and other laws.

Jurisdiction over cancellation of EPs: Secretary of the DAR

EP may be cancelled on the following grounds: (FAN-SIM)a. Failure to pay 3 annual amortizationb. Abandonment of the landc. Neglect or misuse of landd. Sale, transfer or conveyance of the right to use the lande. Illegal conversion of the landf. Misuse or diversion of financial and support services.

Tenant-beneficiary cannot sell or transfer ownership of the land acquired under the Tenant Emancipation Law, EXCEPT to the Government or by hereditary succession. PD No. 27 expressly provides:

Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulation.

Tenant-farmer will pay the Land Bank

Farmer-beneficiary + heirs === pay the Land Bank

Total costs of the land + interest rate 6% p/a for 20 years in 20 equal annual amortizations

EP will be issued to the Farmer-beneficiary after full payment of the amortizations. (EO No. 228)

Payment of Just Compensation to Landowner through the following modes (at the option of the landowner)

a. Direct Payment to the landowner by the farmer-beneficiaries (in cash or in any kinds)b. Payment by the Land Bank with 10% payable in cash immediately and the balance payable in Land Bank bonds over a 10-year period

With 1/10 of the face value maturing every year until the 10th year

c. Other modes prescribed by the Presidential Agrarian Reform Council

Retention Right of Landowner

The landowner is entitled retain an area of not more than 7 hectares, is he is cultivating or will cultivate it.

Personal cultivation by the landowner is not required cultivation can be done indirectly (ie. Labor Administration)

Jurisdiction over retention or exemption issues: Secretary of the DAR because they pertain to administrative implementation of agrarian law.

Chapter 3 The Code of Agrarian ReformsRA No. 3844

History of the Code of Agrarian Reforms

Code of Agrarian Reforms was initially denominated as Agricultural Land Reform Code Administrative Bill submitted by President Diosdado Macapagal. It was signed into law on August 8, 1963.

Objectives of the Code of Agrarian Reforms

To create a system of owner-cultivatorship and economic family-size as basis of Philippine agriculture

Code of Agrarian Reforms supplements the CARL, CARL did not repeal the Code of Agrarian Reforms.

Salient features of Code of Agrarian Reforms

a. Abolish the share tenancy system and replaced it with agricultural landb. Established a bill of rights for agricultural workersc. Established the DAR as the machinery for the acquisition and distribution of agricultural landd. Established the LB as financial arm of the agrarian reform program

Code of Agrarian Reforms supplements the CARL

***Share Tenancy where 2 or more persons agree on a joint undertaking for agricultural production wherein 1 party furnishes the land and the other his labor.

In agricultural leasehold = the farmer cultivates the land belonging to, or possessed by, another with the latters consent for a price in money or in produce in both.

The Code of Agrarian Reforms abolished share tenancy. All share tenancy arrangements were automatically converted to lease-hold.

Extent of application of the leasehold principles under the Code of Agrarian Reforms

Form of Lease Contract

No particular form is required The lease agreement can be oral or written Lessor need not to be the owner of the land Lessor can be a usufructuary or a legal possessor of such civil law lessee. Parties agree to reduce their agreement in writing, the agricultural leasehold contract shall be: a. Drawn in quadruplicate in a language or dialect known to the agricultural lesseeb. Signed or thumb-marked both by agricultural lessee and lessor before 2 witnesses, to be chosen by each party. c. Acknowledge before the municipal court of the municipality where the land is situatedd. Registered with the Municipal Treasurer

**agricultural lessee = cant read = contents of the document shall be read and explained to him by his witness.

**Municipal Treasurer = custodian of agricultural lease contracts. **contracts = kept and recorded in the Registry of Agricultural Leasehold Contracts.

Terms and Conditions of the lease contract

The agricultural lessee and lessor are FREE TO ENTER INTO ANY KIND OF TERM, CONDITION OR STIPULATION in a leasehold contract, as long as they are not contrary to law, morals or public policy.

Mode of Payment of rental

In money or; Should be paid within a reasonable time from threshing or processing in produce; Should be paid immediately after threshing or processing or BOTH

Term of the lease: INDEFINITEi.e. until the lease is terminated for cause REASON: agricultural lessee-farmers are entitled to security of tenure.

Expiration of lease contract does not terminate the leasehold relation because agricultural leasehold relationship is not an ordinary contractual relation. REASON: agricultural lessees re entitled to security of tenure. (Sec 10 of the Code of Agrarian Reforms)

Neither expiration of the lease contract authorizes the landowner to increase the rentals, unless the landowner introduces capital improvements to increase its productivity to the consequent increase in production due to said improvements.

Transfer of ownership of the land does not terminate the leasehold relation. The buyer or transferee becomes the lessor.

Death or incapacity of the lessee does not terminate the leasehold relation. The lessor must choose the successor from among the following, if they are willing to personally cultivate the landholding:a. Surviving spouseb. Eldest direct descendant by consanguinityc. Next eldest descendant or descendants in the order of their age.

***If none above exists or if above persons are not willing to cultivate the land, the leasehold relations is EXTINGUISHED (Sec 9 of Code of Agrarian Reforms)

When agricultural leasehold is extinguished

a. Abandonment of the landholding without the knowledge of the agricultural lessor

2 Essential Elements1. Intent to abandon2. Actual act of abandonment

b. Voluntary surrender of the landholding by the agricultural lessee

To constitute a ground for extinguishment of the lease:1. Surrender of the landholding must be voluntary on the part of the farmer-lessee2. Farmer-lessee must serve 3 months advance notice.

c. Absence of the persons to succeed the lessee, in the event of death or permanent incapacity of the lessee.

The Agricultural lessee may terminate the leasehold for any of the following causes:

a. Cruel, inhumane or offensive treatment of the agricultural lessee or any of his immediate farm household by the agricultural lessor. b. Non-compliance on the part of the agricultural lessor with any of his obligations under the Code of Agrarian Reforms or lease contractc. Compulsion of the agricultural lessee or any member of the farm household by the agricultural lessor to render any service not connected with farm work or even without compulsion if no compensation is paid. d. Commission of a crime by the agricultural lessor or his representativese. Voluntary surrender due to circumstances more advantageous to him and his family.

Dispossession

The lessee may disposed of the landholding on the following grounds:a. Land has been declared by the appropriate government agency to be suited for residential, commercial, industrial or some other urban purposes.b. Failure of the agricultural lessee to substantially comply with any of the terms and conditions of the lease contract or any provisions of the Code of Agrarian Reforms. c. Agricultural lessee planted crops or used the landholding for a purpose other than what had been agreed upond. Agricultural lessee failed to adopt proven farm practicese. The land or other substantial permanent improvement thereon is substantially damaged or destroyed or unreasonably deteriorated through the fault or negligence of the agricultural lessee. f. Agricultural lessee does not pay the lease rental when it falls dueg. The lessee employed a sub-lessee on his landholding

The dispossession is NOT AUTOMATIC. The land-owner-lessor should file the corresponding petition with DAR Board and prove its existence of the grounds for dispossession.

Obligations of agricultural lessor and agricultural lessee

Agricultural LessorAgricultural Lessee

(1) keep the agricultural lessee in peaceful possession and cultivation (2) keep intact such permanent useful improvements existing on the landholding at the start of the leasehold relation

***intended to protect the interest of the agricultural lessee against harassment by the agricultural lessor. Useful improvements are considered as an important part of the consideration of the leasehold contract and to remove or destroy them = violation thereof. (1) cultivate and take care of the farm(2) inform agricultural lessor within reasonable time of any trespass committed by 3rd persons upon the farm(3) take reasonable care of the work animals and farm implements delivered to him by the agricultural lessor \(4) keep his farm and growing crops attended to during the work season. (5) Notify the agricultural lessor at least 3 days before date of harvesting or threshing(6) Pay the lease rental when it falls due

***destroying any improvement on the landholding is a violation of the agricultural lessees obligation to take care of the farm, crops, and other improvements on the landholding with the diligence of a good father of a family.

Rights of agricultural lessor and agricultural lessee

Agricultural LessorAgricultural Lessee

(1) inspect and observe the extent of compliance of the T&C of the lease contract(2) propose a change in the use of the landholding to other agricultural purposes(3) require the agricultural lessee to adopt in his proven farm practices necessary to the conservations of the land(4) mortgage expected rentals**can exercise these rights as long as it does not interfere with the lessees peaceful possession of the land. (1) To have possession and peaceful enjoyment of the land(2) To manage and work on the land in a manner and method of cultivation and harvest which conforms to proven farm practices(3) To mechanize all farm work(4) To deal with millers and processors, attend issuance of quedans and warehouse receipts for the produce due him(5) To have a homelot within the land that he is leasing.

If the agricultural lessee (1) surrenders; (2) abandons; (3) validly ejected from his landholding, he is entitled to be indemnified for:

1. Cost and expenses incurred during cultivation2. For of the necessary and useful improvements made by him on the landholding which are tangible and have not yet lost their utility at the time of surrender or abandonment of the landholding.

Right of pre-emption

The agricultural lessee has the preferential right to buy the land actually cultivated by him under reasonable T&C.

If the agricultural lessor decides to sell the landholding, he should give notice to:a. DARb. All lessees affected

If agricultural lessee agrees with the T&Cs of the sale, he must give written notice to the agricultural lessor of his intention to exercise his RIGHT OF PRE-EMPTION, and thereafter tender payment of, or present a guarantee certificate from the Land Bank to the agricultural lessor.

If agricultural lessor refuses to accept such tender of payment, he may consign it with the court.

DISPUTES AS TO THE REASONABLENESS OF THE T&Cs may be brought by the (1) lessee or by (2) DAR to the PROPER COURT.

Right of Redemption

Land sold to 3rd person without knowledge of agricultural lessee = latter has the right to redeem the same at reasonable price and consideration (by filing a petition or request for redemption with DAR within 180 days from knowledge of the sale) Redemption Price = reasonable price of the land at the time of sale. DAR shall initiate, Land Bank shall finance, said redemption. (Sec 12 Code of Agrarian Reforms)

Rights of agricultural workers (same rights and opportunities in life as industrial workers)

1. Right to self-organization2. Right to engage in concerned activities3. Right to minimum wage4. Right to work for not more than 8 hours5. Right to compensation for personal injuries, death or illness6. Right to security of tenure

Acts which the agricultural lessor is forbidden to do:

1. To dispose the agricultural lessee of his landholding without just cause2. To require the agricultural lessee to assume, (directly or indirectly), the payment of taxes3. To require agricultural lessee to assume, (directly or indirectly), any part of the rent, canon, or other consideration which the agricultural lessor is obliged to pay to 3rd persons for the use of the land4. To deal with millers or processors without written authorization of the lessee5. To discourage (directly or indirectly) the formation of maintenance or growth of unions or organizations of agricultural lessees in the landholding

Acts which the agricultural lessee is forbidden to do:

1. To work additional landholdings belonging to a different agricultural lessor2. To employ a sub-lessee on his landholding

PURPOSE of the prohibition: to prevent agricultural lessee from dissipating his labor and efforts in various landholdings at the expenses of the first agricultural lessor.

Agricultural leasehold is PERSONAL in character = agricultural lesseemust personally work and cultivate the landholding.

To be enforceable, loans obtained by an agricultural lessee should be:1. Written in a language or dialect known to the agricultural lessee2. Signed or thumb-marked by the agricultural lessee or by his agent.

Properties of the lessee that are exempt from liens or execution

25% of the entire produce of the land under cultivation Work animals and farm implements EXCEPT upon judgement of its price or upon judgement of foreclosure of a mortgage

**the exemption cannot be waived for the reason that it intended to provide sustenance for the lessee and his family from one harvest to the next. (Maniego vs Castelo)

Prescription of action

Prescriptive period from filing an action to enforce the rights and obligations under the Code of Agrarian Reforms is 3 years from the times the cause of action accrued.

Department of Agrarian Reform

The Code of Agrarian Reforms re-named the Land Authority (implementing arm of the agrarian reform program) as the Department of Agrarian Reform.

Functions: See pages 176-177 of Ungos Book

Land Bank

Created by Code of Agrarian Reforms Financial arm of the agrarian reform program

Powers: See pages 178-180 of Ungos BookOra et Labora - 5