Thailand Law Source

A Case Study on Land Law In Thailand


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


(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.