5th Topic.agrarian

8/13/2019 5th Topic.agrarian

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Republic Act No. 1199 August 30, 1954

AN ACT TO GOVERN THE RELATON! "ET#EEN LAN$HOL$ER! AN$ TENANT! O% AGRC&LT&RAL LAN$!'LEA!EHOL$! AN$ !HARE TENANC()

*ART

GENERAL *ROV!ON!

!ECTON 1. Title.- This Act shall be known as the "Agricultural Tenancy Act of the Philippines."

!ectio+ . Purposes.- It is the purpose of this Act to establish agricultural tenancy relations between landholders andtenants upon the principle of school justice; to afford adequate protection to the rights of both tenants and landholders; toinsure an equitable division of the produce and incoe derived fro the land; to provide tenant- farers with incentives togreater and ore efficient agricultural production; to bolster their econoic position and to encourage their participation inthe developent of peaceful! vigorous and deocratic rural counities.

!ectio+ 3.Agricultural Tenancy Defined.- Agricultural tenancy is the physical possession by a person of land devotedto agriculture belonging to! or legally possessed by! another for the purpose of production through the labor of the forerand of the ebers of his iediate far household! in consideration of which the forer agrees to share the harvestwith the latter! or to pay a price certain or ascertainable! either in produce or in oney! or in both.

!ectio+ 4. Systems of Agricultural Tenancy; Their Definitions.- Agricultural tenancy is classified into leaseholdtenancy and share tenancy.

hare tenancy e#ists whenever two persons agree on a joint undertaking for agricultural production wherein one partyfurnishes the land and the other his labor! with either or both contributing any one or several of the ites of production!the tenant cultivating the land personally with the aid of labor available fro ebers of his iediate far household!and the produce thereof to be divided between the landholder and the tenant in proportion to their respectivecontributions.

$easehold tenancy e#ists when a person who! either personally or with the aid of labor available fro ebers of hisiediate far household! undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single persontogether with ebers of his iediate far household! belonging to or legally possessed by! another in consideration of

a price certain or ascertainable to be paid by the person cultivating the land either in percentage of the production or in afi#ed aount in oney! or in both.

!ectio+ 5. Definitions of Terms.- As used in this Act%

&a' A tenant shall ean a person who! hiself and with the aid available fro within his iediate farhousehold! cultivates the land belonging to! or possessed by! another! with the latter(s consent for purposes ofproduction! sharing the produce with the landholder under the share tenancy syste! or paying to the landholdera price certain or ascertainable in produce or in oney or both! under the leasehold tenancy syste.

&b' A landholder shall ean a person! natural or juridical! who! either as owner! lessee! usufructuary! or legalpossessor! lets or grants to another the use or cultivation of his land for a consideration either in shares under theshare tenancy syste! or a price certain or ascertainable under the leasehold tenancy syste.

&c' Agricultural year is the period of tie necessary for the raising of seasonal agricultural products! including thepreparation of the land! and the sowing! planting and harvesting of the crop% )rovided! however! That in the caseof coconuts! citrus! coffee! raie! and other crops where ore than one harvest is obtained fro one planting! thewords "agricultural year" shall ean the period of tie fro the preparation of land to the first harvest andthereafter fro harvest to harvest. In both cases! the period of tie ay be shorter or longer than a calendar year

&d' *ar ipleents include hand tools or achines ordinarily eployed in a far enterprise.

&e' +ork anials include anials ordinarily eployed in a far enterprise. The words include carabaos! horses!bullocks! etc.


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&f' )ulling of the seedlings is a phase of far work in which seedlings are uprooted fro the seed bedsiediately before transplanting.

&g' *inal harrowing in the last stage in pulveri,ing the soil into fine particles in readying the field for thetransplanting of the seedlings.

&h' eaping is the cutting of rice stalks.

&i' arvesting shall ean the gathering of the fruits or produce of a crop other than rice.

&j' )iling into sall stacks used as a ter in rice share tenancy shall ean the piling into several sall stackswithin the tenant(s holdings of reaped and bundled stalks containing the grain! preparatory to their transportationto the place designated for their threshing.

&k' )iling into big stacks used as a ter in rice share tenancy shall ean the piling into one huge stack of theseveral sall stacks of reaped and bundled stalks containing grain! which constitute the entire harvest of thetenant fro his holdings! preparatory to threshing.

&l' )roven far practices include those sound faring practices which have attained general acceptance throughusage or are officially recoended by the /epartent of Agriculture and 0atural esources.

&' *air rental value is an aount of oney not in e#cess of allowable depreciation plus si# per cent interest perannu on the investent coputed at its arket value% )rovided! however! That the fair rental value for the workanial or anials and far ipleents required to produce the crop shall not e#ceed five per cent of the grossharvest for the anial or anials and five per cent for ipleents% And! provided! further! That whenever a tractoror power and the necessary ipleents are utili,ed interchangeably with work anials in the sae holding duringthe sae agricultural year the rental shall not e#ceed ten per cent for the cobined services.

&n' Iediately after as used in this Act shall be inclusive of the last day of harvesting! threshing or processingand the ne#t five days thereafter.

&o' Iediate far household includes the ebers of the faily of the tenant! and such other person orpersons! whether related to the tenant or not! who are independent upon hi for support and who usually helphi operate the far enterprise.

&p' Incapacity eans any cause or circustances which prevents the tenant fro fulfilling his contractualobligations and those iposed by this Act.

&q' Inspect eans to e#aine and observe. owever! such e#ainations and observations shall not include anyacts of intiidation or coercion.

&r' Au#iliary crop is any product raised other than the crop to which the cultivation of the land is principallydevoted; and e#cluding the produce of the lot referred to in ection twenty-si#.

!ectio+ -. Tenancy Relationship; Its Definition.- Tenancy relationship is a juridical tie which arises between alandholder and a tenant once they agree! e#pressly or ipliedly! to undertake jointly the cultivation of land belonging tothe forer! either under the share tenancy or leasehold tenancy syste! as a result of which relationship the tenantacquires the right to continue working on and cultivating the land! until and unless he is dispossessed of his holdings forany of the just causes enuerated in ection fifty or the relationship is terinated in accordance with ection nine.

!ectio+ . Tenancy Relationship; How established; Security of Tenure.- Tenancy relationship ay be establishedeither verbally or in writing! e#pressly or ipliedly. 1nce such relationship is established! the tenant shall be entitled tosecurity of tenure as hereinafter provided.

!ectio+ /. Limitations of Relation.- The relation of landholder and tenant shall be liited to the person who furnishesland! either as owner! lessee! usufructuary! or legal possessor! and to the person who actually works the land hiself withthe aid of labor available fro within his iediate far household.


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!ectio+ 9. Seerance of Relationship.- The tenancy relationship is e#tinguished by the voluntary surrender of the landby! or the death or incapacity of! the tenant! but his heirs or the ebers of his iediate far household ay continueto work the land until the close of the agricultural year. The e#piration of the period of the contract as fi#ed by the parties!and the sale or alienation of the land do not of theselves e#tinguish the relationship. In the latter case! the purchaser ortransferee shall assue the rights and obligations of the forer landholder in relation to the tenant. In case of death of thelandholder! his heir or heirs shall likewise assue his rights and obligations.

!ectio+ 10. !ontracts; "ature and !ontinuity of !onditions.- The ters and conditions of tenancy contracts! asstipulated by the parties or as provided by law! shall be understood to continue until odified by the parties. 2odifications

of the ters and conditions of contracts shall not prejudice the right of the tenant to the security of his tenure on the landas deterined in ection si#! seven! and forty-nine.

!ectio+ 11. #reedom to !ontract in $eneral.- The landholder and the tenant shall be free to enter into any or all kindsof tenancy contract! as long as they are not contrary to law! orals or public policy. 3#cept in case of fraud! error! force!intiidation or undue influence! when such contract is reduced to writing and registered as hereinafter provided! the lattershall be conclusive evidence of what has been agreed upon between the contracting parties! if not denounced oripugned within thirty days after its registration.

aid contract shall be contrary to law! orals and public policy;

A. In hare Tenancy

&a' If the tenant is to receive less than the corresponding share for the different contributions be ade to theproduction of the far as hereinafter provided.

&b' If it is stipulated that the tenant or any eber or his iediate far household shall without copensationperfor any work or render any service not connected with the tenant(s duties and obligations provided under this

Act.

4. In $easehold Tenancy

&a' If the tenant-lessee is to pay to the landholder! lessor! as a consideration for the use of the land! an aount ine#cess of that hereinafter provided for the kind and class of land involved.

&b' If the tenant-lessee is to pay the landholder-lessor a consideration in e#cess of the aount prescribed as fairrental value! as deterined pursuant to the provisions of this Act! for the use of work anials! services and5orfar ipleents belonging to the landholder-lessor! in case it is agreed between the parties that the latter shallfurnish any or all of these ites of production.

&c' If it is stipulated that! as a condition precedent to the coenceent or continuance of the lease! the tenant-lessee shall rent work anials! services or far ipleents! or shall ake use of any store or services operatedby the landholder-lessor or any other person! or that the landholder-lessor ay ipose fines! deductions and5orassessents! or that the tenant-lessee shall! without copensation! perfor any work or render any service notconnected with the tenant(s duties and obligations provided under this Act.

!ectio+ 1. #orm and Registration of !ontract.- A contract of tenancy in writing! in order to be conclusive as evidence!shall be drawn in quadruplicate in the language or dialect known to all the parties thereto and signed or thub-arked

both by the landholder or his authori,ed representative! and the tenant hiself! before two witnesses! one to be chosenby each party. If any of the parties does not know to read! one of the witnesses! to be chosen by hi! shall read thecontents of the docuent to hi. 3ach of the contracting parties shall retain a copy of the contract and the third and fourthcopies shall be delivered to the unicipal treasurer of the unicipality where the land which is the subject-atter of thecontract is located! who shall file and register the third copy in his office and forward the fourth copy to the court% )rovidedThat in order that a tenancy contract ay be registered! it shall be the duty of the unicipal treasurer and tenant!respectively! and to place an annotation on each copy of the fact of registration in his office! stating the date! tie andplace of registration as well as the entry or registration nuber.

The for of contract shall be unifor and shall be prepared and furnished by the court. The contracting parties shallacknowledge the e#ecution of the contracting before the unicipal treasurer or justice of the peace or the ayor of theunicipality where the land is situated. 0o fees or staps of any kind shall be paid or required.


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+hen one of the parties is unable to read! in case of doubt the burden of proof to show that he understood the ters ofthe contract shall rest upon the other party who is able to read.

!ectio+ 13. Registry of Tenancy !ontracts.- *or the purposes of this Act! the unicipal treasurer of the unicipalitywherein the land which is the subject-atter of a tenancy contract is situated shall keep a record of all such contractsentered into within his jurisdiction! to be known as "egistry of Tenancy 6ontracts." e shall keep this registry togetherwith a copy of each contract entered therein! and ake annotations on said registry of all subsequent acts relative to eachcontract! such as its renewal! novation! cancellation! etc.% )rovided! That the unicipal treasurer shall not charge any feefor the registration of said contracts or of any subsequent acts relative thereto! none of which shall be subject to the

docuentary stap ta#.

!ectio+ 14. !hange of System.- The tenant shall have the right to change the tenancy contract fro one of sharetenancy to the leasehold tenancy and vice versa and fro one crop-sharing arrangeent to another of the share tenancy.If the share tenancy contract is in writing and is duly registered! the right ay be e#ercised at the e#piration of the periodof the contract. In the absence of any written contract! the right ay be e#ercised at the end of the agricultural year. Inboth cases the changed to the leasehold syste shall be effective one agricultural year after the tenant has served noticeof his intention to change upon the landholder.

!ectio+ 15. Interest on Loans or Adances.- 1n all loans or advances obtained by the tenant fro the landholder inconnection with the cultivation! planting! harvesting and other incidental e#penses for the iproveent of the cropplanted! as well as loans or advances for the subsistence of the tenant and his faily! the interest which ay be stipulatedshall not e#ceed eight per centu per calendar year% )rovided! That on all loans or advances other than oney! such as

grain or other agricultural products! ade coputed on the basis of the current price of the produce at the tie it wasloaned. 7iolation of the provisions of this section shall be punished in accordance with the 8sury $aw.

!ectio+ 1-. %emorandum of Loans or Adances.- Any obligation referring to any aount either in oney or in kind!including the payent of interest! which the tenant ay have received fro tie to tie as loan or advance fro thelandholder! shall be void unless the sae! or soe note or eorandu thereof! be in writing in a language or dialectknown to the party charged! and subscribed by said party! or by his authori,ed agent.

!ectio+ 1. #orm of #inal Accounting.- The final accounting between landholder and tenant at the end of eachagricultural year shall be effected within ten days after the threshing in case of rice and within the sae period of tieafter the harvest or gathering of the fruits in the case of crops. In case of crops which have to be said in processed for!the final accounting shall be within five days after the sale is consuated and the sales receipt shall be e#hibited to thetenant.

The accounting shall be ade to appear in a not or eorandu written in a language or dialect known to the tenant andsigned by both parties in the presence of two witnesses who shall be selected by each party. 3ach of the contractingparties shall be furnished with a copy of said note or eorandu and such final accounting! once duly signed by bothparties and two witnesses! shall be deeed conclusive evidence of its contents! e#cept in case of fraud! error! force!intiidation or undue influence. +hen one of the parties is unable to read! the burden of proof! in case of doubt! to showthat he understood the accounting! shall rest upon the other party who is able to read.

In the absence of a written accounting in accordance with the preceding paragraph! the tenant ay! within three yearsfro the date of the threshing of the crop in question! petition the 6ourt to copel the landholder to render an accountingof the sae in accordance with this section.

!ectio+ 1/. Settlement of Debts.- 1nce the accounting is ade! any aount of oney which the landholder ay have

advanced to the tenant for e#penses of cultivation! harvesting or gathering of the crop or for his own private use! as wellas any aount of grain or agricultural products advanced for his subsistence and that of his faily! shall be paid by thetenant out of his share either in grain or in oney! at the option of the latter; )rovided! That such grain or agriculturalproducts shall be appraised in oney according to their current arket value at the place where the land is located at thetie of their delivery to the tenant% )rovided! further! That in case his share is not sufficient! his outstanding debt shall bereduced to oney and shall bear an interest of not ore than ten per cent per annu% And provided! finally! That thereaining debts of the tenant once converted into oney shall not again be converted into kind. aid outstanding debtoney ay! however! be paid in oney or in agricultural products appraised at the local current arket price at the tieof payent.

!ectio+ 19. &'emption from Lien and(or Attachment.- Twenty-five per centu of the tenant(s share of the produce ofthe land in share tenancy! or of the entire produce in leasehold tenancy! one work anial and one of each kind of far


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ipleent belonging to the tenant! provided that the value of such work anial and ipleents do not e#ceed fivehundred pesos! shall be e#ept fro lien and attachent.

!ectio+ 0. )se of *fficial +eights and %easures.- In all transactions entered into between the landholder and thetenant concerning agricultural products the official weights and easures of the 9overnent shall be used.

!ectio+ 1. &,ectment- .iolation; /urisdiction.- All cases involving the dispossession of a tenant by the landholder orby a third party and5or the settleent and disposition of disputes arising fro the relationship of landholder and tenant! aswell as the violation of any of the provisions of this Act! shall be under the original and e#clusive jurisdiction of such court

as ay now or hereafter be authori,ed by law to take cogni,ance of tenancy relations and disputes

*ART

THE !HARE !(!TE

CHA*TER Co22o+ *oisio+s

!ECTON . Rights of the Tenant.-

&:' The tenant shall be free to work elsewhere whenever the nature of his far obligation warrants his teporaryabsence fro his holdings.

&' The tenant shall! aside fro his labor! have the right to provide any of the contributions for productionwhenever he can do so adequately and on tie.

&


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&a' 6ruel! inhuan or offensive treatent on the part of the landholder of his representative toward the tenant orany eber of his iediate far household.

&b' 0on-copliance on the part of the landholder with any of the obligations iposed upon hi by the provisionsof this Act or by the contract.

&c' If the landholder or his representative copels the tenant or any eber of his iediate far household todo any work or render any service not in any way connected with his far work! or even without copulsion if nocopensation is paid.

&d' 6oission of a crie by the landholder or his representative against the tenant or any eber of hisiediate far household.

!ectio+ 4. Prohibitions to Tenant-

&:' It shall be unlawful for the tenant! whenever the area of his holdings is five hectares or ore! or is sufficientsi,e to ake hi and the ebers of his iediate far household fully occupied in its cultivation! to contract towork at the sae tie on two or ore separate holdings belonging to different landholders under any syste oftenancy! without the knowledge and consent of the land-holder with who he first entered into tenancyrelationship.

&' It shall be unlawful for a share-tenant to eploy a sub-tenant to furnish labor or any phase of the work requiredof hi under this Act! e#cept in cases of illness or any teporary incapacity on his part! in which eventuality thetenant or any eber of his iediate far household is under obligation to report such illness or incapacity tothe landholder. )ayent to the sub-tenant! in whatever for! for services rendered on the land under thiscircustance! shall be for the account of the tenant.

&


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&:' The landholder shall not dispossess the tenant of his holdings e#cept for any of the causes enuerated inection fifty! and without the cause having been proved before! and the dispossession authori,ed by! the court;otherwise! he shall! aside fro the penalty of fine and5or iprisonent provided for any violation of this Act! beliable to the tenant for daages to the e#tent of the landholder(s right under ection twenty-two of this Act.

&' The landholder shall be responsible for the payent of ta#es levied by the 9overnent upon the land which isthe subject-atter of the contract and it shall be unlawful to ake the tenant bear in part of all of the sae! eitherdirectly or indirectly.

&&a' hereof.

!ectio+ 31. !ost of #ertili0er1 etc2; when to be Adanced by the landholder.- +henever the use of fertili,er or theapplication of insect! disease and rodent control easures is directed by the landholder! he shall advance their cost!which shall be deducted fro the gross produce.

CHA*TER Rice !67e Te+7+c8

!ECTON 3. Share 3asis.- The parties shall! on ricelands which produces a noral average of ore than forty cavanesper hectare for the three agricultural years ne#t preceding the current harvest! receive as shares in the gross produce!after setting aside the sae aount of palay used as seed! and after deducting the cost of fertili,er! pest and weedcontrol! reaping and threshing! the aount corresponding to the total equivalent of their individual contributions! coputedas follows;

6ontribution )articipation

:. $and


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!ectio+ 34. Reimbursement "ot Allowed2- 6ontributions or shares in the contribution to the production of the crop inthe for of cash! grain or services! once shouldered or rendered alone by one party ay not be reibursed by the otherparty after the phase or phases of work required in the joint undertaking shall have been copleted.

!ectio+ 35. Sharing of &'penses.- In case the landholder and the tenant agree to share equally in the e#penses of finalharrowing of field and transplanting! the latter ay engage the services of persons or helpers to perfor these phases offar work! provided the rates for each shall have been previously deterined and agreed upon between the landholderand the tenant. In case of disagreeent upon said rates! the party who undertakes to the corresponding share in theharvest! after deducting the e#penses of reaping.

!ectio+ 3-. #urther Rights of the Tenant.- In addition to the provision of ection twenty-two! the tenant shall have theright to%

:. /eterine when to scatter the seeds! to transplant the seedlings! and to reap the harvest! provided they shallbe in accordance with proven far practices and after due notice to the landholder.

. 6hoose the thresher which shall thresh the harvest whenever it is the best available in the locality and the bestsuited to the landholder(s and tenant(s needs and provided the rate charged is equal to or lower than the ratecharged by the owner of other threshers under siilar circustances% )rovided! further! That in cases where thereare ore than tenant the selection of the ajority of the tenants shall prevail% )rovided! finally! That if thelandholder is the owner of a thresher and is ready and willing to grant equal or lower rates under the saeconditions! the use of the landholder(s thresher shall be given preference.


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. 6are of the growing plants.

>. 9athering and bundling of the reaped harvest.

B. The piling of the bundles into sall stacks.

C. The preparation of the place where the harvest is to be stacked.

D. 9athering of the sall stacks and their transportation to the place where they are to be stacked.

:?. )iling into a big stack preparatory to threshing.

!ectio+ 39. Prohibition on Pre4Threshing.- It shall be unlawful for either the tenant or the landholder! without utualconsent! to reap or thresh a portion of the crop at any tie previous to the date set for its threshing. Any violation by eitherparty shall be treated and penali,ed in accordance with this Act and5or under the general provisions of law applicable tothe act coitted.

!ectio+ 40. Place of !rop Diision.- The division of the crop shall be ade in the sae place where the harvest hasbeen threshed and each party shall transport his share to his warehouse or barn! unless the contrary is stipulated by theparties.

CHA*TER !67e Te+7+c8 o+ Cops ot6e t67+ Rice

!ECTON 41. 3asis of Shares in !rops other than Rice.- The landholder and the tenant on lands which produce cropseither than rice shall be free to enter into any contract stipulating the ratio of crop division. In the absence of a stipulation!the custos of the place shall govern% )rovided! That whether the basis of division of the crop is the contract between theparties or the custos of the place! the share of the tenant for his labor in the production shall not less than thirty per centof the harvest or produce! after deducting the e#penses for harvesting and5or initial processing% )rovided! further! That incases where the share of the tenant is! according to local practices or custos prevailing at the tie of the approval ofthis Act! ore than the iniu herein set! the tenant(s share thus established by local practices or custos shall prevailand be considered the iniu.

*ART

THE LEA!EHOL$ TENANC(

!ECTON 4. Landholder4Lessor and Tenant4Lessee1 Defined.Any person! natural or juridical! either as owner!lessee! usufructuary or legal possessor or agricultural land! who lets! leases or rents to another said property for purposesof agricultural production and for a price certain or ascertainable either in an aount of oney or produce! shall be knownas the landholder-lessor; and any person who! with the consent of the forer! tills! cultivates or operates said land!susceptible of cultivation by one individual! personally or with the aid of labor available fro aong his own iediatefar household! is a tenant-lessee.

!ectio+ 43. Rights and *bligations of Tenant4Lessee.- +ith the creation of the tenancy relationship arising out of thecontract between the landholder-lessor and tenant-lessee! the latter shall have the right to enter the preises of the land!and to the adequate and peaceful enjoyent thereof. e shall have the right to work the land according to his best

judgent! provided this anner and ethod of cultivation and harvest are in accordance with proven far practices.8pon terination of the relationship! he shall be entitled to one half of the value of the iproveents ade by hi!provided they are reasonable and adequate to the purposes of the lease.

The tenant-lessee shall pay the consideration stipulated in the lease contract provided it shall not e#ceed the liit fi#ed inection forty-si#. In the absence of stipulation! the consideration shall be that established in said ection forty-si#. eshall ake proper use of the land and the iproveents thereon and shall be under obligation to cultivate it as a goodfather of a faily! by doing all the work considered reasonable and necessary in accordance with proven far practices.e is likewise obliged to take reasonable care of the work anials and far ipleents that ay be delivered to hi bythe land-holder! in case it is agreed between the parties that the landholder-lessor shall furnish any or all of the.

!ectio+ 44. Rights of Landholder4lessor.- The landholder-lessor or his duly authori,ed representatives shall have theright to inspect the preises of the land which is the subject of the lease for the purpose of ascertaining the tenant(s


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copliance with the provisions of the contract and of this Act! but in no case shall he e#ercise any coercion! intiidationor violence in word or deed.

!ectio+ 45. %anner of Rental Payment.- )ayent of the consideration for the use of land ay be ade either in anaount certain or ascertainable in oney or in produce! or both.

!ectio+ 4-. !onsideration for the )se of Land.-

&a' The consideration for the use of ricelands! shall not be ore than thirty per centu of the gross produce for

first class lands and not ore than twenty-five per centu for second class lands. 6lassification of ricelands shallbe deterined by productivity% first class lands being those which yield ore than forty cavanes per hectare andsecond class lands being those which yield forty cavanes or less! the sae to be coputed upon the noralaverage harvest of the three preceding years.

&b' The consideration for agricultural land where e#ist fruit trees and other useful trees and plants! fro which thewhole or any portion of the produce of the said land is taken! shall not be ore than what have been specified inthe preceding section% )rovided! however! That additional considerations for the eployent of said trees anduseful plants! if the principal product is rice or other crops! shall be decided and specified by negotiation betweenthe landholder-lessor and the tenant-lessee; )rovided! further! That where the tenant-lessee! during the period ofthe lease and5or in consideration thereof! plants and5or takes care of said trees and plants! with the consent of thelandholder-lessor! the tenant-lessee shall be copensated by the latter in the anner agreed between the.

&c' The consideration for the use of sugar lands! fishponds! saltbeds and of lands devoted to the raising oflivestock shall be governed by stipulation between the parties.

!ectio+ 4. Rental of +or5 Animals1 etc21 and Applicability of Schedules.- 8pon agreeent of the parties! thetenant- lessee ay ake use of such work anials! far ipleents or services belonging to the landholder-lessor asare available for hire! the consideration of which shall be based on their fair rental value.

The rates on the fair rental value for the use of work anials! far ipleents and services! belonging to the landholder-lessor shall be those provided in chedules "A"! "4"! and "6"! which shall apply upon approval of this Act and shall reainin force! unless the ecretary of Agricultural and 0atural esources revises the sae in accordance with ection fifty-two.

!ectio+ 4/. Loans and Interests.- $oans! either in oney or in kind! obtained by a tenant-lessee fro the landholder

lessor shall be payable at the tie stipulated% )rovided! however! That this shall not be construed as prejudicing the rightof the borrower to repay his obligation before the date of aturity. The loan! unless it is otherwise stipulated! shall bepayable in oney at not ore than eight per cent interest per annu! coputed fro the date of the indebtedness wascontracted up to and including the date of payent. A note or eorandu to evidence such indebtedness shall bee#ecuted in accordance with the provisions of ection si#teen.

*ART V

!EC&RT( O% TEN&RE

!ECTON 49. &,ectment of Tenant.- 0otwithstanding any agreeent or provision of law as to the period! in all caseswhere land devoted to any agricultural purpose is held under any syste of tenancy! the tenant shall not be dispossessedof his holdings e#cept for any of the causes hereinafter enuerated and only after the sae has been proved before! and

the dispossession is authori,ed by! the court.

!ectio+ 50. !auses for the Dispossession of a Tenant.- Any of the following shall be a sufficient cause for thedispossession of a tenant fro his holdings%

&a' The bona fide intention of the landholder to cultivate the land hiself personally or through the eployent offar achinery and ipleents% )rovided! however! That should the landholder not cultivate the land hiself orshould fail to eploy echanical far ipleents for a period of one year after the dispossession of the tenant! itshall be presued that he acted in bad faith and the land and daages for any loss incurred by hi because ofsaid dispossession% )rovided! further! That the land-holder shall! at least one year but not ore than two yearsprior to the date of his petition to dispossess the tenant under this subsection! file notice with the court and shallinfor the tenant in wiring in a language or dialect known to the latter of his intention to cultivate the land hiself!


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either personally or through the eployent of echanical ipleents! together with a certification of theecretary of Agriculture and 0atural esources that the land is suited for echani,ation% )rovided! further! Thatthe dispossessed tenant and the ebers of his iediate household shall be preferred in the eployent ofnecessary laborers under the new set-up.

&b' +hen the current tenant violates or fails to coply with any of the ters and conditions of the contract or anyof the provisions of this Act% )rovided! however! That this subsection shall not apply when the tenant hassubstantially coplied with the contract or with the provisions of this Act.

&c' The tenant(s failure to pay the agreed rental or to deliver the landholder(s share% )rovided! however! That thisshall not apply when the tenant(s failure is caused by a fortuitous event or force ajeure.

&d' +hen the tenant uses the land for a purpose other than that specified by agreeent of the parties.

&e' +hen a share-tenant fails to follow those proven far practices which will contribute towards the proper careof the land and increased agricultural production.

&f' +hen the tenant through negligence perits serious injury to the land which will ipair its productive capacity.

&g' 6onviction by a copetent court of a tenant or any eber of his iediate faily or far household of acrie against the landholder or a eber of his iediate faily.

!ectio+ 51. 3urden of Proof.- The burden of proof to show the e#istence of a lawful cause for the ejectent of a tenantshall rest upon the landholder.

*ART V

!*ECAL *ROV!ON!

!ECTON 5. Duties of the Secretary of Agriculture and "atural Resources.- It shall be the duty of the ecretary ofAgriculture and 0atural esources to%

:. 6onduct such educational progras as circustances ay require adequately to acquaint tenants andlandholders with their rights and responsibilities under this Act.

. evise the rental rates provided for in chedules "A"! and "4"! whenever such revision is ade necessary bychanges in values and prices! so that the rental rates shall confor to the standard of fair rental value as definedin ection &'.


12/75

!ectio+ 55.Applicability of $eneral Laws.- The provisions of e#isting laws which are not inconsistent herewith shallapply to the contracts governed by this Act as well as to acts or oissions by either party against each other during! andin connection with! their relationship.

!ectio+ 5-. Doubts to 3e Soled in #aor of the Tenant.- In the interpretation and enforceent of this Act and otherlaws as well as of the stipulations between the landholder and the tenant! the courts and adinistrative officials shall solveall grave doubts in favor of the tenant.

!ectio+ 5. Penal Proision.- 7iolation of any of the provisions of this Act shall be punished with a fine not e#ceeding

two thousand pesos or iprisonent not e#ceeding one year! or both in the discretion of the 6ourt.

!ectio+ 5/. Separability of Proisions.- If for any reason! any section or provision of this Act shall be questioned in anycourt! and shall be held to be unconstitutional or invalid! no other section or provision of this Act shall be effected thereby.

!ectio+ 59. Repealing Proisions.- )ublic Act 0ubered *our thousand fifty-four! as aended by epublic Act0ubered Thirty-four! 6oonwealth Act 0ubered *ifty-three! 6oonwealth Act 0ubered *our hundred si#ty-oneas aended by epublic Act 0ubered *orty- four! and all laws! rules and regulations inconsistent herewith are herebyrepealed.

!ectio+ -0. &ffectie Date.- This Act shall take effect upon its approval.

Approved% August


13/75

!CHE$&LE C

The aounts to be charged by the landholder when he perfors services in the operation of the far enterprise shall notcurrent the rates in the locality where such services are rendered.

Approved% August 30, 1954


14/75

RE*&"LC ACT No. 3/44

AN ACT TO OR$AN THE AGRC&LT&RAL LAN$ RE%OR CO$E AN$ TO N!TT&TE LAN$ RE%OR! N THE*HL**NE!, NCL&$NG THE A"OLTON O% TENANC( AN$ THE CHANNELNG O% CA*TAL NTO N$&!TR(,

*ROV$E %OR THE NECE!!AR( *LEENTNG AGENCE!, A**RO*RATE %&N$! THERE%OR AN$ %OROTHER *&R*O!E!

*RELNAR( CHA*TER

TTLE$ECLARATON O% *OLC( AN$ CO*O!TON O% CO$E

!ectio+ 1.Title- This Act shall be known as the Agricultural $and efor 6ode.

!ectio+ .Declaration of Policy- It is the policy of the tate%

&:' To establish owner-cultivatorship and the econoic faily-si,e far as the basis of )hilippine agriculture and!as a consequence! divert landlord capital in agriculture to industrial developent;

&' To achieve a dignified e#istence for the sall farers free fro pernicious institutional restraints and practices

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15/75

!ectio+ 4.Abolition of Agricultural Share Tenancy- Agricultural share tenancy! as herein defined! is hereby declared tobe contrary to public policy and shall be abolished% )rovided! That e#isting share tenancy contracts ay continue in forceand effect in any region or locality! to be governed in the eantie by the pertinent provisions of epublic Act 0ubered3leven hundred and ninety-nine! as aended! until the end of the agricultural year when the 0ational $and efor6ouncil proclais that all the governent achineries and agencies in that region or locality relating to leaseholdenvisioned in this 6ode are operating! unless such contracts provide for a shorter period or the tenant sooner e#ercise hisoption to elect the leasehold syste% )rovided! further! That in order not to jeopardi,e international coitents! landsdevoted to crops covered by arketing allotents shall be ade the subject of a separate proclaation that adequateprovisions! such as the organi,ation of cooperatives! arketing agreeents! or other siilar workable arrangeents!have been ade to insure efficient anageent on all atters requiring synchroni,ation of the agricultural with theprocessing phases of such crops% )rovided! furtherore! That where the agricultural share tenancy contract has ceasedto be operative by virtue of this 6ode! or where such a tenancy contract has been entered into in violation of theprovisions of this 6ode and is! therefore! null and void! and the tenant continues in possession of the land for cultivation!there shall be presued to e#ist a leasehold relationship under the provisions of this 6ode! without prejudice to the rightof the landowner and the forer tenant to enter into any other lawful contract in relation to the land forerly under tenancycontract! as long as in the interi the security of tenure of the forer tenant under epublic Act 0ubered 3levenhundred and ninety-nine! as aended! and as provided in this 6ode! is not ipaired% )rovided! finally! That if a lawfulleasehold tenancy contract was entered into prior to the effectivity of this 6ode! the rights and obligations arisingtherefro shall continue to subsist until odified by the parties in accordance with the provisions of this 6ode.

!ectio+ 5.Establishment of Agricultural Leasehold Relation- The agricultural leasehold relation shall be established byoperation of law in accordance with ection four of this 6ode and! in other cases! either orally or in writing! e#pressly oripliedly.

!ectio+ -.Parties to Agricultural Leasehold Relation- The agricultural leasehold relation shall be liited to the personwho furnishes the landholding! either as owner! civil law lessee! usufructuary! or legal possessor! and the person whopersonally cultivates the sae.

!ectio+ .Tenure of Agricultural Leasehold Relation- The agricultural leasehold relation once established shall conferupon the agricultural lessee the right to continue working on the landholding until such leasehold relation is e#tinguished.The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefro unlessauthori,ed by the 6ourt for causes herein provided.

!ectio+ /.Extinguishment of Agricultural Leasehold Relation- The agricultural leasehold relation established under this6ode shall be e#tinguished by%

&:' Abandonent of the landholding without the knowledge of the agricultural lessor;

&' 7oluntary surrender of the landholding by the agricultural lessee! written notice of which shall be served threeonths in advance; or

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16/75

transfers the legal possession of the landholding! the purchaser or transferee thereof shall be subrogated to the rights andsubstituted to the obligations of the agricultural lessor.

!ectio+ 11.Lessee#s Right of Pre$emption- In case the agricultural lessor decides to sell the landholding! the agriculturallessee shall have the preferential right to buy the sae under reasonable ters and conditions% )rovided! That the entirelandholding offered for sale ust be pre-epted by the $and Authority if the landowner so desires! unless the ajority ofthe lessees object to such acquisition% )rovided! further! That where there are two or ore agricultural lessees! each shallbe entitled to said preferential right only to the e#tent of the area actually cultivated by hi. The right of pre-eption underthis ection ay be e#ercised within ninety days fro notice in writing which shall be served by the owner on all lessees

affected.

!ectio+ 1.Lessee#s Right of Redemption- In case the landholding is sold to a third person without the knowledge of theagricultural lessee! the latter shall have the right to redee the sae at a reasonable price and consideration% )rovided!That the entire landholding sold ust be redeeed% )rovided! further! That where these are two or ore agriculturallessees! each shall be entitled to said right of redeption only to the e#tent of the area actually cultivated by hi. Theright of redeption under this ection ay be e#ercised within two years fro the registration of the sale! and shall havepriority over any other right of legal redeption.

!ectio+ 13.Affida%it Re&uired in Sale of Land Sub'ect to Right of Pre$emption- 0o deed of sale of agricultural land undercultivation by an agricultural lessee or lessees shall be recorded in the egistry of )roperty unless accopanied by anaffidavit of the vendor that he has given the written notice required in ection eleven of this 6hapter or that the land is notworked by an agricultural lessee.

!ectio+ 14.Right of Pre$emption and Redemption Not Applicable to Land to be Con%erted into Residential! ndustrial andSimilar Purposes- The right of pre-eption and redeption granted under ections eleven and twelve of this 6haptercannot be e#ercised over landholdings suitably located which the owner bought or holds for conversion into residential!coercial! industrial or other siilar non-agricultural purposes% )rovided! however! That the conversion be in good faithand is substantially carried out within one year fro the date of sale. hould the owner fail to coply with the abovecondition! the agricultural lessee shall have the right to repurchase under reasonable ters and conditions saidlandholding fro said owner within one year after the aforeentioned period for conversion has e#pired% )rovided!however! That the tenure of one year shall cease to run fro the tie the agricultural lessee petitions the $and Authorityto acquire the land under the provisions of paragraph :: of ection fifty-one.

!ectio+ 15.Agricultural Leasehold Contract in (eneral- The agricultural lessor and the agricultural lessee shall be free toenter into any kind of ters! conditions or stipulations in a leasehold contract! as long as they are not contrary to law!

orals or public policy. A ter! condition or stipulation in an agricultural leasehold contract is considered contrary to law!orals or public policy%

&:' If the agricultural lessee is required to pay a rental in e#cess of that which is hereinafter provided for in this6hapter;

&' If the agricultural lessee is required to pay a consideration in e#cess of the fair rental value as defined herein!for the use of work anials and5or far ipleents belonging to the agricultural lessor or to any other person; or

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17/75

!ectio+ 1.)orm and Registration of Contract- hould the parties decide to reduce their agreeent into writing! theagricultural leasehold contract shall be drawn in quadruplicate in a language or dialect known to the agricultural lesseeand signed or thub-arked both by the agricultural lessee personally and by the agricultural lessor or his authori,edrepresentative! before two witnesses! to be chosen by each party. If the agricultural lessee does not know how to read!the contents of the docuent shall be read and e#plained to hi by his witness. The contracting parties shallacknowledge the e#ecution of the contract before the justice of the peace of the unicipality where the land is situated.0o fees or staps of any kind shall be required in the preparation and acknowledgent of the instruent. 3ach of thecontracting parties shall retain a copy of the contract. The justice of the peace shall cause the third copy to be delivered tothe unicipal treasurer of the unicipality where the land is located and the fourth copy to the 1ffice of the Agrarian6ounsel.

3#cept in case of istake! violence! intiidation! undue influence! or fraud! an agricultural contract reduced in writing andregistered as hereinafter provided! shall be conclusive between the contracting parties! if not denounced or ipugnedwithin thirty days after its registration.

!ectio+ 1/.Registration of Leasehold Contract- The unicipal treasurer shall! upon receipt of his copy of the contract!require the agricultural lessee and agricultural lessor to present their respective copies of the contract! and shall cause tobe annotated thereon the date! tie and place of registration as well as its entry or registration nuber.

!ectio+ 19.Registry of Agricultural Leasehold Contracts- The 2unicipal Treasurer of the unicipality wherein the land issituated shall keep a record of all such contracts drawn and e#ecuted within his jurisdiction! to be known as "egistry of

Agricultural $easehold 6ontracts". e shall keep this registry together with a copy of each contract entered therein! and

ake annotations on said registry of all subsequent acts relative to each contract! such as its renewal! novation!cancellation! etc. 0o registration fees or docuentary staps shall be required in the registration of said contracts or ofany subsequent acts relative thereto.

!ectio+ 0.*emorandum of Loans- 0o obligation to pay oney on account of loans including interest thereon obtainedby the agricultural lessee fro the agricultural lessor or his representative shall be enforceable unless the sae or aeorandu thereof be in writing in a language or dialect known to the agricultural lessee! and signed or thub-arkedby hi! or by his agent.

!ectio+ 1.Exemption from Lien and+or Execution- The following shall be e#ept fro lien and5or e#ecution against theagricultural lessee%

&:' Twenty-five per centu of the entire produce of the land under cultivation; and

&' +ork anials and far ipleents belonging to the agricultural lessee% )rovided! That their value does note#ceed one thousand pesos. 4ut no article or species of property entioned in this ection shall be e#ept froe#ecution issued upon a judgent recovered for its price or upon a judgent of foreclosure of a ortgagethereon.

!ectio+ .,se of Accepted Standards of -eights and *easures- In all transactions entered into between theagricultural lessee and the agricultural lessor concerning agricultural products the official or! upon agreeent of theparties! the accepted standards of weights and easures shall be used.

!ectio+ 3.Rights of Agricultural Lessee in (eneral- It shall be the right of the agricultural lessee%

&:' To have possession and peaceful enjoyent of the land;

&' To anage and work on the land in a anner and ethod of cultivation and harvest which confor to provenfar practices;

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18/75

!ectio+ 4.Right to a .ome Lot- The agricultural lessee shall have the right to continue in the e#clusive possession andenjoyent of any hoe lot he ay have occupied upon the effectivity of this 6ode! which shall be considered as includedin the leasehold.

!ectio+ 5.Right to be ndemnified for Labor- The agricultural lessee shall have the right to be indenified for the costand e#penses incurred in the cultivation! planting or harvesting and other e#penses incidental to the iproveent of hiscrop in case he surrenders or abandons his landholding for just cause or is ejected therefro. In addition! he has the rightto be indenified for one-half of the necessary and useful iproveents ade by hi on the landholding% )rovided! Thatthese iproveents are tangible and have not yet lost their utility at the tie of surrender and5or abandonent of the

landholding! at which tie their value shall be deterined for the purpose of the indenity for iproveents.

!ectio+ -./bligations of the Lessee- It shall be the obligation of the agricultural lessee%

&:' To cultivate and take care of the far! growing crops! and other iproveents on the landholding as a goodfather of a faily and perfor all the work therein in accordance with proven far practices;

&' To infor the agricultural lessor within a reasonable tie of any trespass coitted by third persons upon thefar! without prejudice to his direct action against the trespasser;

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19/75

&=' 6oission of a crie by the agricultural lessor or his representative against the agricultural lessee or anyeber of his iediate far household; or

&' 7oluntary surrender due to circustances ore advantageous to hi and his faily.

!ectio+ 9.Rights of the Agricultural Lessor- It shall be the right of the agricultural lessor%

&:' To inspect and observe the e#tent of copliance with the ters and conditions of their contract and theprovisions of this 6hapter;

&' To propose a change in the use of the landholding to other agricultural purposes! or in the kind of crops to beplanted% )rovided! That in case of disagreeent as to the proposed change! the sae shall be settled by the6ourt according to the best interest of the parties concerned% )rovided! further! That in no case shall anagricultural lessee be ejected as a consequence of the conversion of the land to soe other agricultural purposeor because of a change in the crop to be planted;

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20/75

!ectio+ 33.*anner! Time and Place of Rental Payment- The consideration for the lease of the land shall be paid in anaount certain in oney or in produce! or both! payable at the place agreed upon by the parties iediately afterthreshing or processing if the consideration is in kind! or within a reasonable tie thereafter! if not in kind.

In no case shall the agricultural lessor require the agricultural lessee to file a bond! ake a deposit or pay the rental inadvance! in oney or in kind or in both! but a special and preferential lien is hereby created in favor of the agriculturallessor over such portion of the gross harvest necessary for the payent of the rental due in his favor.

!ectio+ 34.Consideration for the Lease of Riceland and Lands De%oted to /ther Crops- The consideration for the lease

of riceland and lands devoted to other crops shall not be ore than the equivalent of twenty-five per centu of theaverage noral harvest during the three agricultural years iediately preceding the date the leasehold was establishedafter deducting the aount used for seeds and the cost of harvesting! threshing! loading! hauling and processing!whichever are applicable% )rovided! That if the land has been cultivated for a period of less than three years! the initialconsideration shall be based on the average noral harvest during the preceding years when the land was actuallycultivated! or on the harvest of the first year in the case of newly-cultivated lands! if that harvest is noral% )rovided!further! That after the lapse of the first three noral harvests! the final consideration shall be based on the average noraharvest during these three preceding agricultural years% )rovided! furtherore! That in the absence of any agreeentbetween the parties as to the rental! the a#iu allowed herein shall apply% )rovided! finally! That if capitaliproveents are introduced on the far not by the lessee to increase its productivity! the rental shall be increasedproportionately to the consequent increase in production due to said iproveents. In case of disagreeent! the 6ourtshall deterine the reasonable increase in rental.

!ectio+ 35.Exemption from Leasehold of /ther 1inds of Lands - 0otwithstanding the provisions of the precedingections! in the case of fishponds! saltbeds! and lands principally planted to citrus! coconuts! cacao! coffee! durian! andother siilar peranent trees at the tie of the approval of this 6ode! the consideration! as well as the tenancy systeprevailing! shall be governed by the provisions of epublic Act 0ubered 3leven hundred and ninety-nine! as aended.

!ectio+ 3-.Possession of Landholding2 Exceptions- 0otwithstanding any agreeent as to the period or future surrenderof the land! an agricultural lessee shall continue in the enjoyent and possession of his landholding e#cept when hisdispossession has been authori,ed by the 6ourt in a judgent that is final and e#ecutory if after due hearing it is shownthat%

&:' The agricultural lessor-owner or a eber of his iediate faily will personally cultivate the landholding orwill convert the landholding! if suitably located! into residential! factory! hospital or school site or other useful non-agricultural purposes% )rovided; That the agricultural lessee shall be entitled to disturbance copensation

equivalent to five years rental on his landholding in addition to his rights under ections twenty-five and thirty-four!e#cept when the land owned and leased by the agricultural lessor! is not ore than five hectares! in which caseinstead of disturbance copensation the lessee ay be entitled to an advanced notice of at least one agriculturalyear before ejectent proceedings are filed against hi% )rovided! further! That should the landholder notcultivate the land hiself for three years or fail to substantially carry out such conversion within one year after thedispossession of the tenant! it shall be presued that he acted in bad faith and the tenant shall have the right todeand possession of the land and recover daages for any loss incurred by hi because of saiddispossessions.

&' The agricultural lessee failed to substantially coply with any of the ters and conditions of the contract orany of the provisions of this 6ode unless his failure is caused by fortuitous event or force ajeure;

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21/75

&B' The lessee eployed a sub-lessee on his landholding in violation of the ters of paragraph of ectiontwenty-seven.

!ectio+ 3.3urden of Proof- The burden of proof to show the e#istence of a lawful cause for the ejectent of anagricultural lessee shall rest upon the agricultural lessor.

!ectio+ 3/.Statute of Limitations- An action to enforce any cause of action under this 6ode shall be barred if notcoenced within three years after such cause of action accrued.

CHA*TER "LL O% RGHT! %OR AGRC&LT&RAL LA"OR

!ectio+ 39.Rights for Agricultural Labor- To enable the far workers to enjoy the sae rights and opportunities in life asindustrial workers! they shall enjoy the following%

&:' ight to self-organi,ation;

&' ight to engage in concerted activities;

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22/75

0o far eployer or anager shall copel a far worker to work during undays and legal holidays% )rovided! however!That should the far worker agree to work on said days! he shall be paid an additional su of at least twenty-five percentu of his regular copensation; )rovided! further! That the far eployer or anager shall not be held liable for anyclai for overtie work which he had not previously authori,ed! e#cept if the work rendered was to avoid daages tocrops! produce! work anials or ipleents! buildings or the like.

Any agreeent or contract between the far eployer or anager and the far worker contrary to the provisions of thisection shall be null and void.

!ectio+ 44.Right of Action for Damages- 0otwithstanding the provisions of e#isting laws to the contrary! Act 0ubered3ighteen hundred and seventy-four! as aended! entitled "An Act to e#tend and regulate the responsibility of eployersfor personal injuries and death suffered by their eployees while at work"! shall apply to far workers insofar as it ay beapplicable.

!ectio+ 45.Right to Compensation for Personal n'uries! Death! or llness- 0otwithstanding the provisions of e#istinglaws to the contrary! Act 0ubered Thirty-four hundred and twenty-eight! as aended! entitled "An Act prescribing thecopensation to be received by eployees for personal injuries! death or illness contracted in the perforance of theirduties"! shall apply to far workers insofar as it ay be applicable.

!ectio+ 4-.Right Against Suspension of Lay$off- The landowner! far eployer or far anager shall not suspend! lay-off or disiss any far worker without just cause fro the tie a far workers( organi,ation or group of far workers haspresented to the landowner a petition or coplaint regarding any atter likely to cause a strike or lockout and a copy

thereof furnished with the /epartent of $abor! or while an agricultural dispute is pending before the 6ourt of Agrarianelations. If it is proved during the said period that a worker has been suspended or disissed without just cause! the6ourt ay direct the reinstateent and the payent of his wage during the tie of his suspension or disissal or of anysu he should have received had he not been suspended or disissed! without prejudice to any criinal liability of thelandowner! far eployer or far anager as prescribed by ection twenty-four of 6oonwealth Act 0ubered 1nehundred and three! as aended.

!ectio+ 4./ther Applicable Pro%isions- All other e#isting laws applicable to non-agricultural workers in privateenterprises which are not inconsistent with this 6ode shall likewise apply to far workers! far labor organi,ations andagrarian disputes as defined in this 6ode! as well as to relations between far anageent and far labor and thefunctions of the /epartent of $abor and other agencies.

!ectio+ 4/.Exceptions to Preceding Section- The preceding ections of this 6hapter! e#cept ections forty! forty-one!

forty-two and forty-three shall not apply to far enterprises coprising not ore than twelve hectares.

CHA*TER LAN$ A&THORT(

ARTCLE Og7+i:7tio+ 7+; %u+ctio+s o< t6e L7+; Aut6oit8

!ectio+ 49.Creation of the Land Authority- *or the purpose of carrying out the policy of establishing owner-cultivatorshipand the econoic faily-si,e far as the basis of )hilippine agriculture and other policies enunciated in this 6ode! thereis hereby created a $and Authority! hereinafter called the Authority! which shall be directly under the control andsupervision of the )resident of the )hilippines. The Authority shall be headed by a 9overnor who shall be appointed bythe )resident with the consent of the 6oission on Appointents.

e shall be assisted by two /eputy 9overnors who shall be appointed by the )resident with the consent of the6oission on Appointents! each of who shall head such operating departents as ay be set up by the 9overnor.The 9overnor and the /eputy 9overnors shall hold office for five years.

!ectio+ 50.6ualifications and Compensation of (o%ernors- 0o person shall be appointed 9overnor or /eputy 9overnorof the Authority unless he is a natural-born citi,en of the )hilippines! with adequate background and e#perience in landrefor here and5or elsewhere! and at least thirty-five years of age.

The 9overnor shall receive an annual copensation of twenty-four thousand pesos; the /eputy 9overnors shall eachreceive an annual copensation of eighteen thousand pesos.


23/75

!ectio+ 51.Po7ers and )unctions- It shall be the responsibility of the Authority%

&:' To initiate and prosecute e#propriation proceedings for the acquisition of private agricultural lands as definedin ection one hundred si#ty-si# of 6hapter FI of this 6ode for the purpose of subdivision into econoic faily-si,e far units and resale of said far units to bona fide tenants! occupants and qualified farers% )rovided! Thatthe powers herein granted shall apply only to private agricultural lands subject to the ters and conditions andorder of priority hereinbelow specified%

a. all idle or abandoned private agricultural lands! e#cept those held or purchased within one year fro

the approval of this 6ode by private individuals or corporations for the purpose of resale and subdivisioninto econoic faily-si,e far units in accordance with the policies enunciated in this 6ode% )rovided!That the subdivision and resale shall be substantially carried out within one year fro the approval of this6ode;

b. all private agricultural lands suitable for subdivision into econoic faily-si,e far units! owned byprivate individuals or corporations worked by lessees! no substantial portion of whose landholding inrelation to the area sought to be e#propriated! is planted to peranent crops under labor adinistration!in e#cess of seventy-five hectares e#cept all private agricultural lands under labor adinistration andlands acquired under ection seventy-one of this 6ode; and

c. in e#propriating private agricultural lands declared by the 0ational $and efor 6ouncil or by the $andAuthority within a land refor district to be necessary for the ipleentation of the provisions of this

6ode! the following order of priority shall be observed%

:. idle or abandoned lands;

. those whose area e#ceeds :!?= hectares;

' To give econoic faily-si,e fars to landless citi,ens of the )hilippines who need! deserve! and are capableof cultivating the land personally! through organi,ed resettleent! under the ters and conditions the Authorityay prescribe! giving priority to qualified and deserving farers in the province where such lands are located;

&B' To reclai swaps and arshes! obtain titles thereto whenever feasible and subdivide the into econoicfaily-si,e fars for distribution to deserving and qualified farers;


24/75

&C' To undertake easures which will insure the early issuance of titles to persons or corporations who haveactually settled and cultivated disposable alienable lands of the public doain;

&D' To survey! subdivide and set aside lands or areas of landholdings under its adinistration for econoic faily-si,e fars! large-scale far operations! town sites! roads! parks! governent centers and other civiciproveents as circustances ay warrant and to subit subdivision survey plans conducted either by thegovernent or private surveyors on parcels of lands under its adinistration for verification and approval either bythe /irector of $ands or by the $and egistration 6oission;

&:?' To infor the Agricultural )roductivity 6oission and the 1ffice of the Agrarian 6ounsel of the probles ofsettlers and farers on lands under its adinistration;

&::' To acquire for agricultural lessees e#ercising their right of pre-eption under 6hapter I of this 6ode! anylandholdings entioned thereunder;

&:' To conduct land capability survey and classification of the entire country and print aps;

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25/75

The owner of the land e#propriated shall be paid in accordance with ection eighty of this Act by the $and 4ank andpursuant to an arrangeent herein authori,ed.

!ectio+ 5.Duty of Court in Expropriation Proceedings- In e#propriation proceedings! it shall be the duty of the 6ourt toinclude in its resolution or order of e#propriation a provision that the $and Authority shall! after taking possession of theland and after the subdivision thereof! allow the $and 4ank to have the title thereto for the purpose of paying the ownerthe just copensation therefor.

!ectio+ 5/.ssuance of Certificates of Title for Parcel or Lot- After the payent of just copensation on the land

e#propriated the $and 4ank shall cause the issuance of separate certificates of titles for each parcel or lot in accordancewith the subdivision survey ade under ection fifty-five.

!ectio+ 59.Prohibition Against Alienation and E'ectment- 8pon the filing of the petition referred to in ection fifty-threethe landowner ay not alienate any portion of the land covered by such petition e#cept in pursuance of the provisions ofthis 6ode! or enter into any for of contract to defeat the purposes of this 6ode! and no ejectent proceedings againstany lessee or occupant of the land covered by the petition shall be instituted or prosecuted until it becoes certain thatthe land shall not be acquired by the Authority.

!ectio+ -0.Disposition of Expropriated Land- After separate certificates of titles have been issued in accordance withection fifty-eight! the $and Authority! on behalf of the epublic of the )hilippines and in representation of the $and 4ankas the financing agency! shall allot and sell each parcel or lot to a qualified beneficiary selected under ection fifty-five ofthis 6ode! subject to unifor ters and conditions iposed by the $and 4ank% )rovided! That the resale shall be at cost

which shall ean the purchase price not ore than si# per centu per annu! which shall cover adinistrative e#penses!and actual e#penses for subdivision! surveying! and registration% )rovided! further! That such cost shall be paid on thebasis of an aorti,ation plan not e#ceeding twenty-five years at the option of the beneficiary.

In case soe agricultural lessees working portions of agricultural lands acquired by the governent under this 6odeprefer to reain as lessees thereof! which preference shall be e#pressed in writing and attested by a representative of the1ffice of Agrarian 6ounsel! the resale and redistribution to the shall be deferred until such tie that such lessees areready and willing to assue the obligations and responsibilities of independent owners! which shall be anifested by awritten notice to this effect by the lessees and which shall oblige the $and Authority forthwith to allot and sell such portionsto such lessees under the sae unifor ters and conditions. )ending the sale! such lessees shall continue to work ontheir landholdings and receive the produce thereof! subject! however! to the requireent that they pay the $and 4ank theallowable rental established in ection thirty-four. The $and 4ank shall apply the rental to the si# percent added to theacquisition price and credit the balance to the acquisition cost in the nae of the lessee as partial payent for the land.

The $and Authority shall adinister said parcels of land during the period they are under lease. 6opetent anageentand adequate production credit shall be provided in accordance with the progra developed by the $and efor )rojectTea for such area.

!ectio+ -1./rgani4ation of Cooperati%e Associations- *or the purpose of ore efficient anageent! adoption ofodern far ethods and techniques! and spreading risk! either through diversification of far projects or utualassuption of risks the farer beneficiaries ay organi,e theselves into cooperative associations with the advice orassistance of the Agricultural )roductivity 6oission and in accordance with the guidelines established by said6oission for such associations.

!ectio+ -.Limitation on Land Rights- 3#cept in case of hereditary succession by one heir! landholdings acquired underthis 6ode ay not be resold! ortgaged! encubered or transferred until after the lapse of ten years fro the date of full

payent and acquisition and after such ten-year period! any transfer! sale or disposition ay be ade only in favor ofpersons qualified to acquire econoic faily-si,e far units in accordance with the provisions of this 6ode% )rovided!That a purchaser who acquired his landholding under a contract to sell ay secure a loan on the sae fro any privatelending institution or individual for an aount not e#ceeding his equity on said landholding upon a guaranty by the $and4ank.

!ectio+ -3.nscription of Specific Prohibition Against Resale and Subdi%ision of Landholding- 6ertificates of titles oflandholdings acquired by the $and Authority and resold to purchasers shall contain therein a specific inscriptionprohibiting further subdivision and the resale! transfer or encubrance of said landholdings e#cept as provided in thepreceding ection.


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!ectio+ -4.Exemption from Attachment- $ands acquired under the provisions of this 6hapter shall be e#ept froe#ecution and attachent! e#cept when the land itself is the property ortgaged! in accordance with ection si#ty-two ofthis 6ode.

!ectio+ -5.Precedence of Expropriation Cases- 3#propriation cases filed by the Authority under provisions of this6hapter shall take precedence over all other civil cases pending before the 6ourt and shall be terinated within a periodnot e#ceeding si# onths fro the date of filing.

ARTCLE

$istibutio+ o< Agicultu7l L7+;s o< t6e *ublic $o27i+

!ectio+ --.Title to Public Agricultural Land- 8pon reservation by the )resident of the )hilippines of public agriculturalland available for disposition by the $and Authority! such land shall be surveyed! titled and transferred to the $and 4ank!which shall reduce said title into individual titles for specific parcels or lots in accordance with the subdivision surveyconducted by the $and Authority under paragraph D of ection fifty-one% )rovided! however! That e#isting laws governingthe acquisition of public lands shall have been coplied with.

The $and Authority shall thereupon distribute in accordance with the provisions of this 6ode! each parcel or lot! subject tothe ters and conditions of the $and 4ank! to a beneficiary selected pursuant to ection seventy-one or in accordancewith paragraph < of ection fifty-one! to a beneficiary selected pursuant to paragraph < of ection one hundred twenty-eight.

!ectio+ -.Census of Settlements- The Authority shall take a census of all settleents already ade or started byfarers on their own initiative on public agricultural lands! forest lands! and on private titled lands which had been cleared!occupied and cultivated wholly or partially by the! with or without legal sanction. The census shall include! aong otherthings! the bona fide character of the settleents! the character of the settlers or farers! the e#act status of the landssettled! the feasibility of enlarging the settleents! particularly in connection with the resources of the land occupied andthe neighboring areas! actual and potential accessibility to arkets! as well as strategic location of the settleent withrespect to national security.

!ectio+ -/.Assistance to Settlers in Transporting Themsel%es and Their 3elongings- The Authority ay! in certainprojects! assist settlers in transporting theselves! their belongings! work anials and far equipent! if any! fro thecounities fro which they are igrating to the settleent areas reserved for the purpose and for subsistencenecessary until credit can be provided by governent financing agencies! or by any other credit institution by loaning tothe the full aount required for such purposes. These loans fro the $and Authority shall be non-interest bearing! shall

constitute a lien upon the land! and shall be aorti,ed over a period of ten years! payable annually beginning with the endof the third year! after the date of arrival in the settleent areas! subject to the right of the borrower to pay in the full at anytie prior to the aturity of the loan.

!ectio+ -9.Assistance to Settlers in Securing E&uipment- The Authority ay assist the settlers in securing equipent!supplies and aterials needed; or assist the cooperative associations of the new settlers in securing the ostadvantageous prices or ters on far ipleents and supplies needed.

!ectio+ 0.Pro%iding .ousing and Accommodations to Settlers- The Authority ay help provide housing and otheraccoodations for the new settlers upon their arrival in the settleent areas by the stationing the in properly surveyedand subdivided lots reserved for the purpose% help the organi,e counity activities; and cooperate with the 4ureau ofealth! the 4ureau of )ublic chools and other pertinent agencies of the 9overnent! in providing services necessary forthe proper establishent of counity facilities.

!ectio+ 1.Po7er of the Land Authority to Sell to .olders of 3onds ssued to )ormer Lando7ners -hose Lands .a%e3een Purchased for Redistribution- The $and Authority shall sell! for a price not less than the appraised value! anyportion not e#ceeding one hundred forty-four hectares in the case of individuals or one thousand twenty-four hectares inthe case of corporations of the public agricultural lands transferred to the $and 4ank which is suitable for large-scale faroperations to any holder! who is qualified to acquire agricultural lands through purchase! of bonds issued to forerlandowners whose lands have been purchased for redistribution under this 6ode! subject to the condition that thepurchaser shall! within two years after acquisition! place under cultivation at least thirty per centu of the entire areaunder plantation adinistration and the reaining seventy per centu within five years fro the date of acquisition. The9overnor of the $and Authority shall issue the title of said land upon showing that the purchaser has begun thedevelopent and cultivation of his land under plantation adinistration% )rovided! That public agricultural land sold as


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hereinabove specified shall not be the object of any e#propriation as long as the sae shall be developed and cultivatedfor large-scale production under far labor anageent! e#cept as allowed by the 6onstitution.

The selling price of the portion of the public agricultural land sold under this ection shall be credited to the 9overnent(ssubscription to the $and 4ank. As payent for the land sold under this ection! the $and 4ank shall accept as soleinstruents of payent the bonds issued pursuant to ection seventy-si#. Issued bonds accepted as payent for the landsold shall be cancelled to the e#tent of the aount paid.

All sales under this 6ode shall be subject to the provision of 6hapter 7 of the )ublic $and Act covering sales of public

agricultural lands insofar as they are not inconsistent with the provisions of this 6ode.

!ectio+ .Duplicate Records to be )urnished the 3ureau of Lands- The $and Authority shall furnish the 4ureau of$ands with the duplicate records of proceedings on applications for the sale or other disposition of public agricultural landsunder its adinistration.

!ectio+ 3.Transfer of Appropriations! Po7ers! )unctions! etc- The 0ational esettleent and ehabilitationAdinistration and the $and Tenure adinistration are hereby abolished and their powers and functions not inconsistentwith this 6ode! balances of all appropriations! funds! equipent! records and supplies! as well as agricultural lands! publicand private! under their adinistration! are hereby transferred to the Authority% )rovided! That the function of the $andTenure Adinistration with respect to the e#propriation of urban lands as provided by e#isting laws is hereby transferredto and all hereafter be undertaken by the )eople(s oesite and housing 6orporation.

In addition to the appropriations herein transferred there is hereby appropriated fro the general funds in the 0ationalTreasury not otherwise appropriated the su of five illion pesos! or so uch thereof as ay be necessary! to carry outthe purposes of this 6ode.

To carry out the land capability survey and classification entioned in paragraph : of ection fifty-one and ection onehundred thirty-two of this 6ode! there is hereby appropriated out of the unappropriated funds of the 0ational Treasury theaount of ten illion pesos.

CHA*TER VLAN$ "AN>

!ectio+ 4.Creation- To finance the acquisition by the 9overnent of landed estates for division and resale to sall

landholders! as well as the purchase of the landholding by the agricultural lessee fro the landowner! there is herebyestablished a body corporate to be known as the "$and 4ank of the )hilippines"! hereinafter called the "4ank"! which shallhave its principal place of business in 2anila. The legal e#istence of the 4ank shall be for a period of fifty years countingfro the date of the approval hereof. The 4ank shall be subject to such rules and regulations as the 6entral 4ank ayfro tie to tie proulgate.

!ectio+ 5.Po7ers in (eneral- To carry out this ain purpose! the 4ank shall have the power%

&:' To prescribe! repeal! and alter its own by laws! to deterine its operating policies! and to issue such rules andregulations as ay be necessary to achieve the ain purpose for the creation of the 4ank;

&' To adopt! alter and use a corporate seal;

&


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9overnent of the )hilippines in the course of liquidation of the business of the 4ank shall revert to the/epartent of Agriculture and 0atural esources; and

&>' To provide! free of charge! investent counselling and technical services to landowners whose lands havebeen acquired by the $and 4ank. *or this purpose! the $and 4ank ay contract the services of privateconsultants.

!ectio+ -.ssuance of 3onds- The $and 4ank shall! upon recoendation by the 4oard of Trustees and approval ofthe 2onetary 4oard of the 6entral 4ank! issue bonds! debentures and other evidences of indebtedness at such ters!

rates and conditions as the 4ank ay deterine up to an aggregate aount not e#ceeding! at any one tie! five ties itsunipaired capital and surplus. uch bonds and other obligations shall be secured by the assets of the 4ank and shall befully ta# e#ept both as to principal and incoe. aid incoe shall be paid to the bondholder every si# &>' onths frothe date of issue. These bonds and other obligations shall be fully negotiable and unconditionally guaranteed by the9overnent of the epublic of the )hilippines and shall be redeeable at the option of the 4ank at or prior to aturity!which in no case shall e#ceed twenty-five years. These negotiable instruents of indebtedness shall be ortgageable inaccordance with established banking procedures and practices to governent institutions not to e#ceed si#ty per centuof their face value to enable the holders of such bonds to ake use of the in investents in productive enterprises. Theyshall also be accepted as payents for reparation equipent and aterials.

The 4oard of Trustees shall have the power to prescribe rules and regulations for the registration of the bonds issued bythe 4ank at the request of the holders thereof.

!ectio+ .ssuance of Preferred Shares of Stoc5 to )inance Ac&uisition of Landed Estates- The $and 4ank shall issue!fro tie to tie! preferred shares of stock in such quantities not e#ceeding si# hundred illion pesos worth of preferredshares as ay be necessary to pay the owners of landed estates in accordance with ections eighty and eighty-one ofthis 6ode. The aount of shares that the 4ank ay issue shall not e#ceed the aggregate aount need to pay foracquired estates in the proportions prescribed in said ection eighty of this 6ode. The 4oard of Trustees shall include asa necessary part of the by-laws that it shall issue under ection seventy-five of this 6ode! such forula as it deesadequate for deterining the net asset value of its holdings as a guide and basis for the issuance of preferred shares. Theshares of stock issued under the authority of this provision shall be guaranteed a rate of return of si# per centu perannu. In the event that the earnings of the 4ank for any single fiscal year are not sufficient to enable the 4ank! afteraking reasonable allowance for adinistration! contingencies and growth! to declare dividends at the guaranteed rate!the aount equivalent to the difference between the 4ank(s earnings available for dividends and that necessary to pay theguaranteed rate shall be paid by the 4ank out of its own assets but the 9overnent shall! on the sae day that the 4ankakes such payent! reiburse the latter in full! for which purpose such aounts as ay be necessary to enable the

9overnent to ake such reiburseents are hereby appropriated out of any oneys in the 0ational Treasury nototherwise appropriated. The 4ank shall give sufficient notice to the 4udget 6oissioner and the )resident of the)hilippines in the event that it is not able to pay the guaranteed rate of return on any fiscal period. The guaranteed rate ofreturn on these shares shall not preclude the holders thereof fro participating at a percentage higher than si# per centushould the earnings of the 4ank for the corresponding fiscal period e#ceed the guaranteed rate of return. The 4oard ofTrustees shall declare and distribute dividends within three onths after the close of each fiscal year at the guaranteedrate unless a higher rate of return in justified by the 4ank(s earnings after aking reasonable allowance for adinistration!contingencies and growth! in which case dividends shall be declared and distributed at a higher rate. The capital gainsderived fro the sale or transfer of such shares and all incoe derived therefro in the for of dividends shall be fullye#ept fro ta#es.

!ectio+ /.Special (uaranty )und- In the event that the 4ank shall be unable to pay the bonds! debentures! and otherobligations issued by it! a fi#ed aount thereof shall be paid fro a special guaranty fund to be set up by the 9overnent!

to guarantee the obligation of the $and 4ank! and established in accordance with this ection! and thereupon! to thee#tent of the aounts so paid! the 9overnent of the epublic of the )hilippines shall succeed to all the rights of theholders of such bonds! debentures or other obligations% )rovided! however! That for the ne#t four years after theestablishent of the 4ank! the payent to the special guaranty fund should not e#ceed one illion pesos per year! afterwhich period! the 9overnent shall pay into the guaranty fund the su of five hundred thousand pesos each year untilthe cuulative total of such guaranty fund is no less than twenty percent of the outstanding net obligation of the $and4ank at the end of any single calendar year.

The guaranty fund shall be adinistered by the 6entral 4ank of the )hilippines in the anner ost consistent with itscharter. *or the purpose of such fund! there shall be appropriated annually the su of one illion pesos out of anyoneys in the 0ational Treasury not otherwise appropriated! until the total aount of twenty illion pesos shall have beenattained.


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!ectio+ 9.Recei%ing Payments and Time Deposits- The 4ank! under the supervision of the 2onetary 4oard andsubject to the provisions of the 9eneral 4anking Act! shall receive savings and tie deposits fro the sall landholders inwhose favor public lands or landed estates acquired by the $and Authority have been sold and! for this purpose! establishand aintain branches and offices in such areas as ay be necessary to service such deposits. The 2onetary 4oardshall supervise and authori,e the 4ank to receive savings and tie deposits fro the public in areas where facilities forsuch a service do not e#ist or cannot be adequately provided by other deposit institutions.

!ectio+ /0.*a5ing Payment to /7ners of Landed Estates- The $and bank shall ake payents in the for hereinprescribed to the owners of land acquired by the $and Authority for division and resale under this 6ode. uch payent

shall be ade in the following anner% ten per centu in cash and the reaining balance in si# percent! ta#-free!redeeable bonds issued by the 4ank in accordance with ection seventy-si#! unless the landowner desires to be paid inshares of stock issued by the $and 4ank in accordance with ection seventy-seven in an aount not e#ceeding thirty percentu of the purchase price.

In the event there is an e#isting lien on encubrance on the land in favor of any 9overnent institution at the tie ofacquisition by the $and 4ank! the bonds and5or shares! in that order! shall be accepted as substitute collaterals to securethe indebtedness.

The profits accruing fro payent shall be e#ept fro the ta# on capital gains.

!ectio+ /1.Capital- The authori,ed capital stock of the 4ank shall be one billion five hundred illion pesos divided intoninety illion shares with a par value of ten pesos each! which shall be fully subscribed by the 9overnent and si#ty

illion preferred shares with a par value of ten pesos each which shall be issued in accordance with the provisions ofections seventy-seven and eighty-three of this 6ode. 1f the total capital subscribed by the 9overnent! two hundredillion pesos shall be paid by the 9overnent within one year fro the approval of this 6ode! and one hundred illionpesos every year thereafter for two years for which purpose the aount of two hundred illion pesos is herebyappropriated upon the effectivity of this 6ode! and one hundred illion pesos every year for the ne#t two years thereafter!out of the funds in the 0ational Treasury not otherwise appropriated for the purpose% )rovided! That if there are notenough funds in the 0ational Treasury for the appropriation herein ade! the ecretary of *inance! with the approval ofthe )resident of the )hilippines! shall issue bonds or other evidence of indebtedness to be negotiated either locally orabroad in such aount as ay be necessary to cover any deficiency in the aount above-appropriated but not e#ceedingfour hundred illion pesos! the proceeds of which are hereby appropriated% )rovided! further! That the bonds to be issuedlocally shall not be supported by the 6entral 4ank% )rovided! finally! That there is autoatically appropriated out of theunappropriated funds in the 0ational Treasury such aounts as is necessary to cover the losses which shall includeaong other things loss of earnings occasioned by the liitation of the resale cost herein provided such that said aount

together with the adinistrative e#penses entioned in ection ninety hereof shall not e#ceed in the aggregate theequivalent of two and one-half per centu of its assets liited therein.

!ectio+ /.(o%ernment Shares- All shares of stock in the 4ank subscribed or owned by the 9overnen

Documents

5th Topic.agrarian