In yungtien and dien,we have transfers of ownership rights which may be regarded as special cases of land lease.Turning to the general case,by the lease of farm land is meant"the use of another person's agricultural land for the purpose of cultivation by oneself by paying a rent therefor"（Art.106）.Under the pre-reform land law,the following articles are worth noting:
Art.108.The lessee shall not,even with the consent of the lessor,sublease the whole or part of the leased farm land to another person.
Art.109.Any farm lease contract for a definite period shall,unless the lessor takes back the land for his own cultivation on the expiration of the contractual period,be deemed to have been renewed for an indefinite period,if the lessee continues to cultivate the said land.Art.114.Any farm lease contract for an indefinite period may be terminated……where the lessor takes back the farm land for his own cultivation.
Art.117.Where the farm land taken back by the lessor for his own cultivation is again offered for lease,the original lessee shall have preferential right to accept the lease.
The above articles set down three main points.First,subleasing was prohibited（Art.108）.But this did not prevent other disguised forms of subleasing such as joint tenancy.Second,the lessor could terminate the lease contract for his own cultivation（Art.109 and 114）.This in effect imposed no restriction on the length of lease other than the contracted length,since the term"owner cultivation"is vague enough to allow the hiring of farm hands to do the tilling.It was to this provision that"insecure"tenure was frequently attributed,providing a reason for the law to be condemned as out of date.And third,though preferential right to lease was allowed to the original lessee,there existed no restriction on the lessor's right to revise the original terms upon renewal of the contract.A provision for rent control is seen in Art.110 of the prereform land law,wherein"farm rent shall not exceed 8 percent of the value of the land."According to the lawmaker,however,"due to circumstances this had never been enforced."[8] This has given rise to the claim that tenants were totally unprotected and exploited by landowners.
Transferability and Delineation of Investment Rights
Investments in land and other assets attached to land owned by the lessor were protected by the Chinese civil code:
Civil Code,Art.432.The lessee shall keep and preserve the thing[property]leased with the solicitude of a good administrator.If the thing leased has productivity,he shall also preserve its productivity.
If the lessee acts contrary to the provisions of the preceding paragraph and thereby causes loss or damage to the thing leased,he shall be liable to pay compensation therefor.But he shall not be held responsible for any damage or change caused to the thing leased through its use,or through the enjoyment of the income accruing therefrom,in such ways as are agreed upon or as are in consonance with the inherent nature of the thing itself.
Civil Code,Art.462.Where agricultural implements,livestock,or other accessories are leased together with the farm land,an inventory of the same showing their respective values shall be made……If any accessory mentioned in the inventory be destroyed or lost owing to circumstances for which the lessee must be held responsible,he shall be liable to make it good.
Civil Code,Art.445.For the settlement of claims arising out of the lease contract,the lessor of an immovable property shall have the right of retention over the movables which belong to the lessee and are fixed to the said immovable property.But this provision shall not apply to movables that are not subject to attachment.
This last Article is thus conditional to Art.118 of Law:
The lessor shall not exercise the right of retention provided for in Art.445 of the Civil Code over such farm implements,livestock,fertilizers,and farm products of the lessee as are necessary for cultivation.
Investments in land by the lessee were protected by two Articles in Law,which read:
Art.119.By special improvements on farm land shall be meant improvements resulting from the increased application of labor and capital which,besides preserving the original qualities and utility of the land,increases its productivity or facilitates its cultivation.
The lessee may freely make the special improvement referred to in the preceding paragraph,but shall notify the lessor of the amount of the outlay incurred thereon.Art.120.When any farm land is returned to the lessor on the termination of the lease contract……the lessee may claim from the lessor repayment of the outlay incurred on the special improvements referred to in paragraph two of the preceding Article,but such repayment shall be limited to the cost of that part of the special improvements which has not lost its utility.
In the above articles the ownership of productive entities other than land was clearly delineated.It should be noted that,according to Art.120 above,no capital gain was explicitly allowed to the lessee for the"special improvements"made by the lessee.He might be compensated,of course,by adjusting the rental terms in the lease contract.
We may now briefly summarize the attributes of private farm land ownership in Taiwan before the reform.Although mineral rights which might be attached to land were denied as private,the right to farm was defined as exclusive.Investments might be made by the lessor or the lessee,and in either case the ownership of resources was clearly delineated.Transferability of land tenure rights was provided in the form of outright transfers,yungtien,dien,mortage,and land lease.Under land lease,compensating payments for farming investments made by either party were not restricted.We may,therefore,designate the farming resources,affected by the first phase of Taiwan land reform,as resources under a system of private property rights.[9]