Comprehensive Agrarian Reform Law and the Agricultural Tenancy Act of the Philippines

Section 1

This Act shall be known as the "Agricultural Tenancy Act of the Philippines."

Section 2

It is the purpose of this Act to establish agricultural tenancy relations between landholders and tenants upon the principle of school justice; to afford adequate protection to the rights of both tenants and landholders; to insure an equitable division of the produce and income derived from the land; to provide tenant- farmers with incentives to greater and more efficient agricultural production; to bolster their economic position and to encourage their participation in the development of peaceful, vigorous and democratic rural communities.

Section 3

Agricultural tenancy is the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain or ascertainable, either in produce or in money, or in both.

Section 4

Agricultural tenancy is classified into leasehold tenancy and share tenancy. Share tenancy exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their respective contributions. Leasehold tenancy exists when a person who, either personally or with the aid of labor available form members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a fixed amount in money or in produce or in both. (as amended)

Section 5

As used in this Act: (a) A tenant shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or possessed by, another, with the latter's consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system. (b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee, usufructuary, or legal possessor, lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system, or a price certain or ascertainable under the leasehold tenancy system. (c) Agricultural year is the period of time necessary for the arising of seasonal agricultural products, including the preparation of the land, and the sowing, planting harvesting and, whenever applicable, threshing of the crop: Provided, however, That in the case of coconuts, citrus, coffee, ramie, and other crops where more than one harvest is obtained from one planting, the words "agricultural year" shall mean the period of time from the preparation of the land to the first harvest and thereafter from harvest to harvest. In both cases, the period of time may be shorter or longer than a calendar year. (as amended) (c-1) Beginning of the agricultural year is the time the first farm operation for the production of the principal crop is performed, such as, seed-bed preparation in the case of rice. (as inserted) (d) Farm implements include hand tools or machines ordinarily employed in a farm enterprise. (e) Work animals include animals ordinarily employed in a farm enterprise. The words include carabaos, horses, bullocks, etc. (f) Pulling of the seedlings is a phase of farm work in which seedlings are uprooted from the seed beds immediately before transplanting. (g) Final harrowing in the last stage in pulverizing the soil into fine particles in readying the field for the transplanting of the seedlings. (g-1) Broadcasting is the strewing or the scattering of seeds directly to the landholding in lieu of transplanting. (as inserted) (g-2) Ratooning as the cutting of the straw close to the ground at harvesting time after all the standing water has been drained out to allow the young tillers to sprout out the rootstocks and develop into mature normal bearing plants in three or four months with the aid of fertilizer, manure or compost. (as inserted) (h) Reaping is the cutting of rice stalks. (i) Harvesting shall mean the gathering of the fruits or produce of a crop other than rice. (j) Piling into small stacks used as a term in rice share tenancy shall mean the piling into several small stacks within the tenant's holdings of reaped and bundled stalks containing the grain, preparatory to their transportation to the place designated for their threshing. (k) Piling into big stacks used as a term in rice share tenancy shall mean the piling into one huge stack of the several small stacks of reaped and bundled stalks containing grain, which constitute the entire harvest of the tenant from his holdings, preparatory to threshing. (l) Proven farm practices include those sound farming practices which have attained general acceptance through usage or are officially recommended by the Department of Agriculture and Natural Resources. (m) Fair rental value is an amount of money not in excess of allowable depreciation plus six per cent interest per annum on the investment computed at its market value: Provided, however, That the fair rental value for the work animal or animals and farm implements required to produce the crop shall not exceed five per cent of the gross harvest for the animal or animals and five per cent for implements: And, provided, further, That whenever a tractor or power and the necessary implements are utilized interchangeably with work animals in the same holding during the same agricultural year the rental shall not exceed ten per cent for the combined services. (n) Immediately after as used in this Act shall be inclusive of the last day of harvesting, threshing or processing and the next five days thereafter. (o) Immediate farm household includes the members of the family of the tenant, and such other person or persons, whether related to the tenant or not, who are independent upon him for support and who usually help him operate the farm enterprise. (p) Incapacity means any cause or circumstances which prevents the tenant from fulfilling his contractual obligations and those imposed by this Act. (q) Inspect means to examine and observe. However, such examinations and observations shall not include any acts of intimidation or coercion. (r) Auxiliary crop is any product raised other than the crop to which the cultivation of the land is principally devoted in each agricultural year; and excluding the produce of the lot referred to in section twenty-two, paragraph three. (as amended) (s) Suited for mechanization shall mean that more than 60% of the tenants' labor as provided for in this Act shall be displaced by farm machinery and that the employment of mechanized implements will lower the cost of production. (as inserted)

Section 6

Tenancy relationship is a juridical tie which arises between a landholder and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of land belonging to the former, either under the share tenancy or leasehold tenancy system, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land, until and unless he is dispossessed of his holdings for any of the just causes enumerated in Section fifty or the relationship is terminated in accordance with Section nine.

Section 7

Tenancy relationship may be established either verbally or in writing, expressly or impliedly. Once such relationship is established, the tenant shall be entitled to security of tenure as hereinafter provided.

Section 8

The relation of landholder and tenant shall be limited to the person who furnishes land, either as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with the aid of labor available from within his immediate farm household.

Section 9

The tenancy relationship is extinguished by the voluntary surrender or abandonment of the land by, or the death or incapacity of, the tenant: Provided, That in case of the tenant's death or incapacity, the tenancy relationship shall continue between the landholder and one member of the tenant's immediate farm household who is related to the tenant within the second degree by consanguinity and who shall cultivate the land himself personally unless the landholder shall cultivate the land himself personally or through the employment of mechanical farm implements, in accordance with section fifty hereof. Should the deceased or incapacitated tenant have two or more members of his immediate farm household qualified to succeed him, the landholder shall have the right to choose from among them who should succeed. The expiration of the period of the contract as fixed by the parties, or the sale, alienation or transfer of legal possession of the land does not of itself extinguish the relationship. In the latter case, the purchaser or transferee shall assume the rights and obligations of the former landholder in relation to the tenant, In case of death of the landholder, his heir or heirs shall likewise assume his rights and obligations. (as amended)

Section 10

The terms and conditions of tenancy contracts, as stipulated by the parties or as provided by law, shall be understood to continue until modified by the parties. Modifications of the terms and conditions of contracts shall not prejudice the right of the tenant to the security of his tenure on the land as determined in Section six, seven, and forty-nine.

Section 11

The landholder and the tenant shall be free to enter into any or all kinds of tenancy contract, as long as they are not contrary to law, morals or public policy. Except in case of fraud, error, force, intimidation or undue influence, when such contract is reduced to writing and registered as hereinafter provided, the latter shall be conclusive evidence of what has been agreed upon between the contracting parties, if not denounced or impugned within thirty days after its registration. Said contract shall be contrary to law, morals and public policy; A. In Share Tenancy (a) If the tenant is to receive less than the corresponding share for the different contributions be made to the production of the farm as hereinafter provided. (b) If it is stipulated that the tenant or any member or his immediate farm household shall without compensation perform any work or render any service not connected with the tenant's duties and obligations provided under this Act. B. In Leasehold Tenancy (a) If the tenant-lessee is to pay to the landholder, lessor, as a consideration for the use of the land, an amount in excess 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 excess of the amount prescribed as fair rental value, as determined pursuant to the provisions of this Act, for the use of work animals, services and/or farm implements belonging to the landholder-lessor, in case it is agreed between the parties that the latter shall furnish any or all of these items of production. (c) If it is stipulated that, as a condition precedent to the commencement or continuance of the lease, the tenant-lessee shall rent work animals, services or farm implements, or shall make use of any store or services operated by the landholder-lessor or any other person, or that the landholder-lessor may impose fines, deductions and/or assessments, or that the tenant-lessee shall, without compensation, perform any work or render any service not connected with the tenant's duties and obligations provided under this Act.

Section 12

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 thumb-marked both by the landholder or his authorized representative, and the tenant himself, before two witnesses, one to be chosen by each party. If any of the parties does not know to read, one of the witnesses, to be chosen by him, shall read the contents of the document to him. Each of the contracting parties shall retain a copy of the contract and the third and fourth copies shall be delivered to the municipal treasurer of the municipality where the land which is the subject-matter of the contract is located, who shall file and register the third copy in his office and forward the fourth copy to the court: Provided, That in order that a tenancy contract may be registered, it shall be the duty of the municipal treasurer and tenant, respectively, and to place an annotation on each copy of the fact of registration in his office, stating the date, time and place of registration as well as the entry or registration number. The form of contract shall be uniform and shall be prepared and furnished by the court. The contracting parties shall acknowledge the execution of the contracting before the municipal treasurer or justice of the peace or the mayor of the municipality where the land is situated. No fees or stamps of any kind shall be paid or required. When one of the parties is unable to read, in case of doubt the burden of proof to show that he understood the terms of the contract shall rest upon the other party who is able to read.

Section 13

For the purposes of this Act, the municipal treasurer of the municipality wherein the land which is the subject-matter of a tenancy contract is situated shall keep a record of all such contracts entered into within his jurisdiction, to be known as "Registry of Tenancy Contracts." He shall keep this registry together with a copy of each contract entered therein, and make annotations on said registry of all subsequent acts relative to each contract, such as its renewal, novation, cancellation, etc.: Provided, That the municipal treasurer shall not charge any fee for the registration of said contracts or of any subsequent acts relative thereto, none of which shall be subject to the documentary stamp tax.

Section 14

The tenant shall have the right to change the tenancy contract from one of share tenancy to leasehold tenancy and vice versa and from one crop sharing arrangement to another of the share tenancy. If the share tenancy contract is in writing and is duly registered, the right to change from one crop sharing arrangement to another or from one tenancy system to another may be exercised at least one month before the beginning of the next agricultural year after the expiration of the period of the contract, the right may be exercised at least one month before the agricultural year when the change shall be effected. (as amended)

Section 15

On all loans or advances obtained by the tenant from the landholder in connection with the cultivation, planting, harvesting and other incidental expenses for the improvement of the crop planted, as well as loans or advances for the subsistence of the tenant and his family, the interest which may be stipulated shall not exceed eight per centum per calendar year: Provided, That on all loans or advances other than money, such as grain or other agricultural products, made computed on the basis of the current price of the produce at the time it was loaned. Violation of the provisions of this section shall be punished in accordance with the Usury Law.

Section 16

Any obligation referring to any amount either in money or in kind, including the payment of interest, which the tenant may have received from time to time as loan or advance from the landholder, shall be void unless the same, or some note or memorandum thereof, be in writing in a language or dialect known to the party charged, and subscribed by said party, or by his authorized agent.

Section 17

The final accounting between landholder and tenant at the end of each agricultural year shall be effected within ten days after the threshing in case of rice and within the same period of time after the harvest or gathering of the fruits in the case of crops. In case of crops which have to be said in processed form, the final accounting shall be within five days after the sale is consummated and the sales receipt shall be exhibited to the tenant. The accounting shall be made to appear in a not or memorandum written in a language or dialect known to the tenant and signed by both parties in the presence of two witnesses who shall be selected by each party. Each of the contracting parties shall be furnished with a copy of said note or memorandum and such final accounting, once duly signed by both parties and two witnesses, shall be deemed conclusive evidence of its contents, except in case of fraud, error, force, intimidation or undue influence. When one of the parties is unable to read, the burden of proof, in case of doubt, to show that 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 may, within three years from the date of the threshing of the crop in question, petition the Court to compel the landholder to render an accounting of the same in accordance with this section.

Section 18

Once the accounting is made, any amount of money which the landholder may have advanced to the tenant for expenses of cultivation, harvesting or gathering of the crop or for his own private use, as well as any amount of grain or agricultural products advanced for his subsistence and that of his family, shall be paid by the tenant out of his share either in grain or in money, at the option of the latter; Provided, That such grain or agricultural products shall be appraised in money according to their current market value at the place where the land is located at the time of their delivery to the tenant: Provided, further, That in case his share is not sufficient, his outstanding debt shall be reduced to money and shall bear an interest of not more than ten per cent per annum: And provided, finally, That the remaining debts of the tenant once converted into money shall not again be converted into kind. Said outstanding debt money may, however, be paid in money or in agricultural products appraised at the local current market price at the time of payment.

Section 19

Twenty-five per centum of the tenant's share of the produce of the land in share tenancy, or of the entire produce in leasehold tenancy, one work animal and one of each kind of farm implement belonging to the tenant, provided that the value of such work animal and implements do not exceed five hundred pesos, shall be exempt from lien and attachment.

Section 20

In all transactions entered into between the landholder and the tenant concerning agricultural products the official weights and measures of the Government shall be used.

Section 21

All cases involving the dispossession of a tenant by the landholder or by a third party and/or the settlement and disposition of disputes arising from the relationship of landholder and tenant, as well as the violation of any of the provisions of this Act, shall be under the original and exclusive jurisdiction of such court as may now or hereafter be authorized by law to take cognizance of tenancy relations and disputes.