REVITALIZING
THE LAW AND DEVELOPMENT MOVEMENT
A
Case Study on Land Law In Thailand
PHLIP
VON MEHREN, J.D. |
TIM
SAWERS, J.D. |
MILBANK,TWEED,HADLEY
AND McCLOY
WASHINGTON, D.C. |
HODGSON,
RUSS, ANDREWS, WOODS & GOODYEAR
BUFFALO, N.Y. |
The
king collected taxes on paddy land and on other sources of bounty such
as fruit trees. Before the end of the Ayudhya period the government issued
documents to the farmers showing how much land they farmed, how many mango
trees they had, etc. These tax documents came to represent de facto proof
of the farmers' land-holding right.(30) At least by the end of the Ayudhya period commoners exercised ownership
rights in land as against other commoners; they bought and sold land,
devised and inherited land and borrowed against it. But if a farmer did
not make beneficial use of his land, he lost any claim he had to that
land.(31) As Lingat points out, this "use
it or lose it" policy helped to maximize land tax revenue, an important
financial resource throughout this period.(32)
Thus
throughout the Ayudhya period (about 1350-1767) and during the period
leading up to the Anglo-Siamese treaty of 1855, farmers' rights in the
land they tilled gradually increased. By the dawn of the modern era farmers
exercised virtually complete ownership rights over their land. But the
legal system, which was based upon the thammasat (natural law)
and recognized the king as the divine embodiment of law, held the king
to be owner of all land. Certainly this legal fiction represented no threat
to the farmer's tenure by 1855.(33) If political
and economic events had been different after 1855 perhaps the Thai legal
system might have developed its own distinctive approach to the "use
it or lose it" problem. But, as the next section of this chapter
shows, the events of the second half of the nineteenth century forced
Thailand to adopt many western ideas, including a European legal system
and a western theory of title. The Thai farmer's ancient usufructory right
was further refined, but was then pushed to the periphery.
B. Modern law
1.
19th Century
The
Anglo-Siamese Treaty of 1855, commonly known as the Bowring Treaty after
the governor of Hongkong who negotiated it,(34) opened up Thailand to foreign trade on London's terms. Because he saw
this treaty as the only way to avoid colonization, King Mongkut (Rama
IV, 1851-1868) agreed, among other things, to limit import duties to three
percent ad valorem and export taxes to an average of five percent.(35) Similar commercial treaties with many foreign countries followed the Bowring
Treaty. All of these treaties called for extraterritoriality for nationals
of the foreign country in Thailand because of the perceived backwardness
of the Thai legal system. The Bowring Treaty was the death knell for the
traditional order, including the self-sufficient economy and the evolving
system of land tenure based on usufruct. Extraterritoriality and the threat
of colonization combined to move the Thai monarchy toward modernization
of the legal system.
Thai
rice became very popular abroad.(36) As
the price of rice rose dramatically,(37) the demand for land increased.(38) This
caused problems with the farmer's traditional mode of borrowing against
his land, one of his main sources of loans. The principal method of borrowing
against land was the old Chinese financing instrument khaifak,
often translated into English as "sale with right of redemption."
Professor Feinerman has shown that the khaifak transaction is not
really captured when translated into western languages because western
legal systems have no equivalent of khaifak.(39) He has also conveyed the rich variety of forms this Chinese instrument
took in China and Vietnam. For instance, in China and Vietnam there was
sometimes a period of time after the exchange of money and rights in land
before the "seller" could exercise his right to redeem.(40) Also, because title did exist in these two societies, the "seller"
sometimes had the right to redeem the land even after the end of the redemption
period.(41)
We
believe the Thai khaifak transaction was simpler than its Chinese
and Vietnamese cousins. There is no evidence at all of any interval between
the khaifak transaction and the beginning of the redemption period.
Furthermore, ancient Thai law clearly gave the land to the "buyer"
if the "seller" failed to redeem within the redemption period
(see appendix, page x). while it is clear from Professor Feinerman's article
that in China and Vietnam the "buyer" took possession of the
land,(42) in the Thai context it is not
clear at all whether the "buyer" or "seller" had possession
of the land after the khaifak transaction. We believe that because
of the abundance of land and shortage of manpower in Thailand at this
time the "seller" usually continued to farm his land. For our
present purposes it is not necessary to resolve this puzzle, but for clarity
of presentation we assume the "seller" remained on his land.
Despite its drawbacks we sometimes refer to the khaifak transaction
as "sale with right of redemption" for the same reason.
So
under the khaifak instrument the borrower-vendor remained on the
land and paid a large portion of its bounty to the lender-purchaser as
interest or rent. The borrower thus transformed himself from an owner
to a tenant, but retained the right to repurchase the land for a maximum
of ten years (see footnotes 24 & 25 and the text accompanying them,
this chapter). We presume that the khaifak financing instrument,
as applied in Thailand, was quite informal by western standards. We believe,
since land was readily available and still relatively cheap, that the
amount of money secured by the land was linked not so much to the value
of the land as to the value of the product of the land. Probably the amount
of money which changed hands using this old instrument was rather small
and the interest rate was high.
The
increased demand for land caused the value of land to rise in the second
half of the nineteenth century. As the price of land went up the need
for clarification of exactly who had rights in the land under the traditional
financial instrument rose with it.
King
Chulalongkorn (Rama V, 1868-1910) accomplished a complete transformation
and modernization of the Thai government using Western advisors and many
Western concepts. Threatened by the colonizing powers on all sides and
stung by the extraterritoriality granted foreign nationals on Thai soil,
Chulalongkorn moved the legal system out of its orbit around the king
and set it on the road towards a "formally rational," Western
system. At the heart of Chulalongkorn' s Chakri Reformation was the restructuring
of the judiciary. He reasoned that only by showing the colonizers that
Thailand was a "civilized" country (that is, that it had a Western
legal system) could he rid Thailand of the insulting extraterritorial
rights enjoyed by foreign nationals in Thailand.(43) Chulalongkorn hoped that by Westernizing the legal system he would take
away from England and France an often repeated excuse for colonization,
bringing "civilization" to "backward" countries, and
thereby avoid the fate of all of his neighbors. It also seems certain
that, as Engel points out,(44) Chulalongkorn
hoped to improve the lot of his subjects by Westernizing his legal system.(45)
Part
7
Endnotes:
(30)
Lingat, Robert (1935-40) Prawatsat kotmai thai (History of Thai
Law) vol. 2, 328.
(31) Id. 317-24.
(32) Id.
(33)
Indeed, in 1861 King Mongkut admitted in a backhanded manner that he did
not actually own all the land. On April 7th of that year King Mongkut
issued a royal decree declaring that if the king wanted to expropriate
the land of any commoner the king would have to pay the fair market price.
For an English translation of this royal decree see Chatthip Nartsupha
and Suthy Prasartset (1978) The Political Economy of Siam, 1851-1910 vol. 1 pp. 291-6.
(34)
This treaty is known to Thais as "the unequal treaty with England"
(santhisanya may samoephak kap angrit). Lingat, Robert (1935-40) Prawatsat kotmai thai (History of Thai Law) vol. 1, 3rd page of
introduction (no pagination in introduction).
(35)
Wyatt, David K. (1984) Thailand: a Short History 183.
(36)
Child, Jacob T. (1892) The Pearl of Asia 144.
(37) Prakat ngoen kha na tra daeng prot hai tang khang (Proclamation
allowing delayed payment of certain paddy taxes, 1864). Sathian Laiyalak et al., comp., (1935-53) Prachum kotmai prajam sok (Collected
Laws Arranged Chronologically, hereafter cited as PKPS) vol. 7
pg. 124. The Thai legal system has no official citation system. We have
cited Sathian Laiyalak's work wherever possible, but it covers a limited
period and Harvard's collection does not include the entire 69 volume
set. Where we have been unable to cite Prachum kotmai prajam sok we have depended upon the Thai custom of dating the law or naming it after
a previous law which it amends (e.g. Phraratchabanyat awk chanot thi
din chabap thi 2 [Royal decree on the issuance of title deed to land
#21 in this chapter's epilog).
(38)
Tomosugi, Takashi (1969) "The Land System in Central Thailand," Developing Economies, 7 (3): 291.
(39)
Feinerman, James "The Dien Transaction in China and Vietnam"
29-35 (unpublished manuscript).
(40) Id. 26-7.
(41) Id. at 8.
(42) Id. 23-4.
(43)
Engel, David M. (1975) Law and Kingship in Thailand during the Reign
of King Chulalongkorn 59. A Harvard Law School professor (and son-in-law
of President Woodrow Wilson), Francis B. Sayre, negotiated the treaties
which gained Thailand judicial autonomy in 1927. See Darling, Frank
C. (1970) "The Evolution of Law in Thailand," Review of Politics,
32 (2): 205.
(44)
Engel, David M. (1975) Law and Kingship in Thailand during the Reign
of King Chulalongkorn 59.
(45) Id. at 16. |