AGRARIAN LAW by Barte INTRODUCTION A.

DEFINITIONS AND TERMS Reform presupposes that something is defective, hence, needs reformation and cor rection. Land Reform denotes a broad concept of conventional and revolutionary m easures intended to correct certain defects in the relationship between landowne r and tiller regarding their rights and obligations in the cultivation and manag ement of landholding. Agrarian Reform refers not only to land reform but also em braces a full range of measures designed to improve the relationship between lan downer and tiller, employer and employee, corporate management and stockholders, cooperatives and members, and other farmers' organizations including their econom ic, social and political relations with the community and the government. Commen ts: Under the Comprehensive Agrarian Reform Law of 1998 (R.A. No. 6657), Agraria n Reform is defined as the redistribution of lands, regardless of crops or fruit s produced, to farmers and regular farmworkers who are landless, irrespective of tenurial arrangement. AGRARIAN STRUCTURE Refers to that complex set of relationships within the agricultural sector betwe en tenure structure, production structure and structure for supporting services.

1. Land Tenure Structure is a concept that connotes one or more types of land te nure system regulating the rights to ownership and control and usages of land an d the duties accompanying such rights. a. Agricultural Tenancy refers to the man ner of holding agricultural lands. b. Share Tenancy under this system of landhol ding, tillers work the land as sharecroppers entitled to share in the produce of the land. c. Leasehold Tenancy is a tenurial system which was instituted by R.A . No. 3844 (Code of Agrarian Reforms) characterized by lessor and lessee relatio nship which is created either by written or oral agreement between the parties o r impliedly by acceptance of benefits by the landowner, or by an act of cultivat ion thru the toleration of the owner. Comments: Leasehold relationship abolished the share tenancy system under the Rice Share Tenancy Act of 1933 as amended, P .D. No. 27 was issued by then President Ferdinand Marcos which aside from uphold ing the leasehold relationship, likewise ordained the emancipation of tenant-far mers from the bondage of the soil, and considered them ipso facto owners of the lands they till primarily devoted to rice and corn. P.D. No. 27 (Tenants Emancip ation Decree) likewise fixed the retention limit for the landowner an area not e xceeding seven (7) hectares, provided, that such landowner is cultivating or wil l now cultivate the land, and furthermore, that he does not own other agricultur al lands of more than seven (7) hectares. d. Amortizing Owner a tenant-farmer wh ose status had been raised automatically by operation of law from leasehold tena nt to that of amortizing owner, who makes repayments of the purchase price of th e land he tills to the Land Bank. e. Full Owner or Owner-Cultivator is an amorti zing owner (tenant-farmer) who has completed full payment of his amortization to the Land Bank of the Philippines, and is therefore entitled to a certificate of title under the Torrens System. Comments: Under R.A. No. 3844, as amended by R. A. No. 6389, there are three shifts in the conversion of the tenurial status of tenant-farmer to full owner, namely: share tenant to leaseholder to amortizing o wner, and from amortizing owner to full owner (owner-cultivator). An amortizing owner by operation of law (P.D. No. 27) is entitled to an Emancipation Patent wh ich serves as a farmholder's provisional title of

ownership to the land upon completion of his amortization repayments to the Land Bank, or to the Landowner in cases of farmers who have been amortizing their la nds with the landowner. f. Owner-Cultivator is the term applied to a tenant farm er who has attained the status of full owner and qualified beneficiary under the Agrarian Reform Law of the Philippines. 2. Production Structure is a concept th at refers to the use of the land, nature and method of farm operation, and the p rocess of production. 3. Structure for Supporting Services is an agrarian reform measure designed to help the tenant tiller in the availment of credit facilitie s, marketing of his products, supplying of seeds, insecticides, fertilizers, irr igation, storage, processing and other technical assistance / services in direct bearing to reforms of tenure and production structures. HISTORICAL BACKGROUND Even before the Spaniard came into these Island, the idea of private ownership o f land was not prevalent. Land was commonly owned by the community or barangay, cultivated communally or individually by members of the barangay. When the Spani ard came in 1521, common ownership of land slowly took the backseat, and private property became dominant, paving the way to Encomienda system. The encomienda w as a vehicle used to collect taxes from Filipinos, who tilled the land and surre ndered part of their produce to the encomendero as tribute in the form of agricu ltural crops, poultry, woven mats, etc. Towards the end of the 18 th century, th ere was a mad scramble for wealth thru world trade. Thus, encomienda were replac ed by haciendas. CONSTITUTIONAL MANDATES ON AGRARIAN REFORM The state shall promote a just and dynamic social order that will free the peopl e from poverty through policies adequate social services, promote full employmen t, a rising standard of living, and an improve quality of life for all. The stat e shall promote a comprehensive rural development and agrarian reform.

The State shall, by law, undertake an agrarian reform program founded on the rig ht of the farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers, to receiv e a just share of the fruits thereof. (Art. XIII, Social Justice and Human Right s, Sec. 4). CONTEMPORANEOUS PRECEPTS AND MEASURES In order to implement the 1987 Constitution, Congress passed the Comprehensive A grarian Reform Law of 1988. (R.A. NO. 6657) which was signed into law by the Pre sident of the Phillippines on June 10, 1988, and took effect on June 15, 1988. T his is the main law on agrarian reform in the Philippines today. The CARL provid es that all other laws on agrarian reform not contrary or inconsistent with the provisions of this Act shall have suppletory effect. LAND REFORM MEASURES RETRACED Treaty of Paris (1898) the confiscation of friar lands and distributed among pea sants by the independent government of Malolos during the Philippine Revolution. Philippine Bill (1902) Limited private individual landholdings to 16 hectares, and corporate landholdings to 1,024 hectares. Land Registrations Act (1902) Land owners were required to register their landholdings and acquire Torrens titles t o land properties. Friar Land Act Instituted transfer of friar lands to the tena nts to diffuse the peasant unrest. Rice Share Tenancy Act (Public Act No. 4054) - which provided for a 50-50 sharing of the crop, an interest rte ceiling of 10 percent per crop year, and safeguards against arbitrary dismissal of tenants by landlords. Commonwealth Act.No. 278 of 1938 to buy farms and large estates for s ubletting to bonafide occupants with an option to buy, thru the National Land Se ttlement Administration (NLSA). Sugar Cane Tenancy Contracts Act. (Act. No. 4113 ) makes it a duty of the sugar central to exhibit to the tenant the receipts of the number of tons milled by the landowner thereat.

Commonwealth Act. No. 103 created the Court of Industrial Relations (CIR) which exercised jurisdiction over disputes arising from relationship between agricultu ral workers and landowners. Commonwealth Act. No. 213 deals with the right to fo rm legitimate labor organizations and to enter into collective bargaining agreem ents between management and labor. Commonwealth Act No. 178 which improved the p rovision of Act No. 4054 the Rice Share Tenancy Act, giving more teeth and prote ction to the rights of tenants of agricultural lands. Republic Act. No. 34 amend ed certain Sections of the Rice Share Tenancy Act providing for a 70 30 crop sha ring method. Republic Act No. 1160 established the National Resettlement and Reh abilitation Administration (NARRA) of landless dissidents and other landless far mers. Republic Act No. 1199 (Agricultural Tenancy Act) infused an added boost to the tenurial rights of tenant tiller. Land Reform Act (R.A. No. 1400, 1955) - g uaranteed the expropriation of all tenanted landed estates. It set a retention l imit of 300 hectares for individually owned estates, and 600 hectares for corpor ate owned estates. Republic Act. No. 1267 An Act Creating the Court of Agrarian Relations to try and decide all matters arising from the relationship of persons in the cultivation and use of agricultural lands. Republic Act. No. 3844 marked the abolition of share tenancy and / or the system of share cropping between la ndowner and tenant, and the automatic conversion of share tenants into leasehold ers. Republic Act No. 6389 (Code of Agrarian Reforms) an improvement of R.A. No. 3844, this amendatory Act featured the creation of the Department of Agrarian R eforms (DAR). Agrarian Reform Special Fund Act (Rep. Act. No. 6390) provided for a special account and financial support for the Agrarian Reform Program of the government. Presidential Decree No. 2 declaring the entire nation as a land refo rm area. Presidential Decree No. 27 decreeing the emancipation of the tenants, t ransferring to them the ownership of the land they till.

Proclamation No. 131 Instituting a comprehensive agrarian reform program which c overs, all public and private agricultural lands as provided in the Constitution . Executive Order No. 228 Declaring full landownership to qualified beneficiarie s covered by Presidential Decree No. 27. Executive Order No. 229 Providing for t he mechanisms for the implementation of the comprehensive agrarian reform progra m, creating the Presidential Agrarian Reform Council (PARC). Executive Order No. 129-A Modifying Executive Order No. 129, reorganizing and strengthening the Dep artment of Agrarian Reform. Republic Act No. 6657 - As primary agrarian land ref orm measure in the country today, its operation covers all public and private ag ricultural lands, including other lands of the public domain suitable for agricu lture.

CHAPTER I AGRICULTURAL LEASEHOLD CONCEPT A. AGRICULTURAL LAND REFORM CODE (Rep. Act. No. 3844) REPUBLIC ACT No. 3844 August 8, 1963 AN ACT TO ORDAIN THE AGRICULTURAL LAND REFO RM CODE AND TO INSTITUTE LAND REFORMS IN THE PHILIPPINES... REPUBLIC ACT No. 384 4 AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND REFOR MS IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES, APPROPRI ATE FUNDS THEREFOR AND FOR OTHER PURPOSES Section 1. Title - This Act shall be known as the Agricultural Land Reform Code. 1. PREFATORY STATEMENTS The thrust of this legislation is the drastic abolition of share tenancy system. It provided for the automatic conversion of the sharecropper to the status of a n agricultural lessee, governed by the system of agricultural leasehold which is established either: a. by agreement of the parties, whether oral or written, or b. by operation of law. The Agricultural Land Reform Code still finds applicati on to the following: a. areas which have not come within the operation and imple mentation of P.D. No. 27; b. agricultural laborers subject to the provisions of the Labor Code; c. organization and operation of the Land Bank; d. provisions on resettlements of farmers; e. right to pre-emption and redemption, with respect to land-owner's retained area, should such landowner decide to sell his tenanted / leased retained

area, the tenant has the preferential right to purchase and / or redeem the same in case the land is sold to a third person without the tenant's knowledge; f. rig ht of the tenant / lessee to 75% share from the standing crops; Three shifts in the mode of acquisition a. b. The automatic conversion of the status of share te nant to leaseholder characterized by payment of fixed rentals; The second shift which is the conversion of the leaseholder to amortizing owner, characterized by the Land Bank purchase of the property with a concomitant obligation imposed on the tenant-lessee to pay Land Bank on amortization basis the purchase price of the farmholding; The third shift which converts the status of an amortizaing own er into full owner or owner-cultivator upon full payment of the remaining balanc e of the amortization. c. Section 3. Composition of Code 1. An agricultural leasehold system to replace al l existing share tenancy systems in agriculture; 2. A system of crediting rental as amortization payment on purchase price; 3. A declaration of rights for agric ultural labor; 4. A machinery for the acquisition and equitable distribution of agricultural land; 5. An institution to finance the acquisition and distribution of agricultural land; 6. A machinery to extend credit and similar assistance to agricultural lessees, amortizing owners-cultivators, owners-cultivator and coop eratives; 7. A machinery to provide marketing, management and other technical as sistance and / or services to agricultural lessees, amortizing ownerscultivators , owner-cultivator, cooperatives; 8. A machinery for cooperative development; 9. A department for formulating and implementing projects of agrarian reform; 10. An expanded program of land 11. A judicial system to decide issues arising under this Code. 12. A machinery to provide legal assistance to agricultural lessees, amortizing owners-cultivator, and owners-cultivator. Repayment Scheme and Credi t Assistance

Jurisdiction on Agrarian Disputes All agrarian disputes are now under the cogniz ance of the Department of Agrarian Reform thru the Agrarian Reform Adjudication Board. The Department of Agrarian Reform Adjudication Board (DARAB) in turn dele gates its functions to the respective Regional and Provincial Adjudicators of th e DAR. Any decision, order, award or ruling of the DAR on any agrarian dispute, may be brought to the Court of Appeals on certiorari. Special Agrarian Courts Un der the present law (R.A. No. 6657) all controversies involving the determinatio n of just compensation and prosecution of all criminal offenses arising from vio lations of the provisions of this Act, fall under the original and exclusive jur isdiction of Special Agrarian Courts. Bureau of Agrarian Legal Assistance They s hall be responsible for the development of plans and programs for the extension of legal information to farmers; extension of legal services to them. DEFINITION OF TERMS Agricultural land means land devoted to any growth, including but not limited to crop lands, saltbeds, fishponds, idle land and abandoned land. Agricu ltural lessee means a person who by himself and with the aid available from with in his immediate farm household, cultivates the land belonging to, or possessed by, another with the latter's consent. Agricultural lessor means a person, lets or grants to another the cultivation and use of his land for a price certain. Agri cultural year means the period of time required for raising a particular agricul tural product. Farm implements means hand tools or machineries in a farm enterpr ise. Immediate farm household - means the members of the family of the lessee or lessor and other persons who are dependent upon him for support. Proven farm pr actices means sound farming practices. Personal cultivation means cultivation by the lessee or lessor in person.

Work animals means animals ordinarily employed in a farm enterprise. Agrarian di spute means any controversy relating to terms, tenure or condition of employment , or concerning an association or representation of persons in negotiating, main taining, changing or seeking to arrange terms on conditions of employment. Agric ultural owner-cultivator means any person who, personally cultivates his own lan d. Fair rental value means the value not in excess of allowable depreciation plu s 6% interest per annum. Incapacity means any cause or circumstance which preven ts the lessee from fulfilling his contractual and other obligations under the Co de. Modes of Land Tenure Allowed under R.A. No. 3844 1. Leasehold system charact erized by a tenant farmer personally and actually cultivating the farmholding un der a leasehold relationship whereby the lessee pays a fixed amount of rental wh ether in cash or in kind to the lessor. 2. Share tenancy 3. Owner-cultivatorship 4. Cooperative-cultivatorship which is a form of agrarian relationship among me mbers of a cooperative who work and live on the land as tillers in common. 5. La bor administration which employs laborers and workers on a daily wage basis, and engaged in a large scale plantation farming of permanent crops by their respect ive managers. How Leasehold Relation is Established 1. by agreement of the parti es 2. by operation of law implementation of R.A. No. 3844 providing for the abol ition of share tenancy. Parties to Leasehold Relation 1. 2. the landholder the p erson who personally cultivates the land.

ESSENCE OF LEASEHOLD RELATION 1. It is essentially personal, in the sense that i t cannot be exercised by third persons other than the lessor himself, and the le ssee who personally cultivates the land; 2. It has the nature of an in rem or re al relationship, because it imposes a burden upon the land subject of the landho lding and continues to exist even by the death or incapacity of either party, or the expiration of the agreement. Tenurial Arrangement of Leasehold It makes it a penal offense to eject a tenant illegally from his holding except upon approva l of the court. Doctrine on security of land tenure Security of land tenure the a gricultural leasehold relation under this Code, shall not be extinguished by mer e expiration of the term or period in the leasehold contract, in case the agricu ltural lessor sells, alienates of transfers the legal possession of the landhold ing, the purchaser or transferee thereof shall be subrogated to the rights and s ubstituted to the obligations of the agricultural lessor. In order to possess the status of a de jure tenant, the following essential requisites must concur, to wit: 1. 2. 3. 4. 5. 6. the parties are the landowner and the tenant; the subject is agricultural land; there is consent; the purpose is agricultural production; there is personal cultivation; there is sharing of harvests. The absence of one does not make an occupant of a parcel of land or a cultivator thereof, a de jure tenant, hence cannot invoke the defense of security of tenur e. What then constitutes as family-size farm so as to give rise to tenancy relat ionship? Family-size farm an area of farmland that permits efficient use of labo r and capital resources of the farm family and will produce an income sufficient to provide a modest standard of living to meet a farm family's needs for food, cl othing, shelter, and education with possible allowance for payment of yearly

installments on the land, and reasonable reserves to absorb yearly fluctuations in income. What now is the effect of the law to cultivator-tiller of a less than family-size farms? Such landholder-tiller or tiller-sharer, is at most consider ed as a mere caretaker before the eyes of the law who is not entitled to the sec urity of tenure. Should the landholding be sold or alienated to a new owner, wha t happens to the rights and obligations of the transferee and his heirs? The tra nsferee and his heirs are subrogated to the rights and obligations of the former landowner. However, the change of landowner cannot be allowed to raise the stat us of a mere caretaker or tiller sharer to that of an agricultural tenant and le aseholder. Causes for Extinguishment of Leasehold Relation 1. Abandonment of the landholding; 2. Voluntary surrender of the landholding; 3. Absence of successor or qualified heir, in case of death or permanent incapacity of the lessee; 4. J udicial ejectment of the lessee; 5. Acquisition by the lessee of the landholding ; 6. Termination of the leasehold under Sec. 28; 7. Mutual consent of the partie s; 8. Conversion of the landholding for non-agricultural purposes. Obligations o f the Lessees 1. To cultivate and take care of the farm as a good father of a fa mily 2. To inform the agricultural lessor any trespass committed by third person s upon the farm; 3. To take reasonable care of the work animals and farm impleme nts delivered to him by the agricultural lessor, he shall be held responsible an d made answerable therefore to the extent of the value of the work animals and / or farm implements at the time of the loss, death or destruction; 4. To keep hi s farm and growing crops attended to during the work season. In case of unjustif ied abandonment all of the expected produce, any upon order of the court be forf eited in favor of the agricultural lessor. 5. To notify the agricultural lessor at least three (3) days before the date of harvesting; 6. To pay the lease renta l to the agricultural lessor when it falls due.

Section 26, R.A. No. 3844, empowers the lessee to take direct action against any trespasser to the landholding without waiting for the response from the lessor. Prohibitions to Agricultural Lessee a. To contract to work additional lanholdin gs belonging to a different agricultural lessor; b. To acquire and personally cu ltivate a family-size farm without knowledge and consent of the agricultural les or; c. To employ a sub-lessee. Termination of Leasehold by the Lessee 1. 2. 3. 4 . 5. Cruel, inhuman or offensive treatment of the agricultural lessee by the agr icultural lessor; Non-compliance on the part of the agricultural lessor with any of the obligations imposed; Compulsion of the agricultural lessee by the agricu ltural lessor to do any work not in any way connected with farm work; Commission of a crime by the agricultural lessor against the agricultural lessee Voluntary surrender due to circumstances more advantageous to him and his family. Rights of the Agricultural Lessor 1. To inspect and observe the extent of compli ance of their contract and the provision of this Chapter; 2. To propose a change in the use of the landholding to other agricultural purposes. In case of disagr eement, the same shall be settled by the Court (Now Adjudication Board); 3. To a cquire the agricultural lessee, to adopt in his proven farm practices necessary to the conservation of the land, improvement of its fertility and increase its p roductivity: That in case of disagreement as to what proven farm practice the le ssee shall adopt, the same shall be settled by the court (now the DARAB); 4. To mortgage expected rentals. Obligations of the Lessor 1. To keep the lessee in pe aceful possession and cultivation of his landholding; 2. To keep intact the perm anent useful improvements existing on the landholding.

The lessee may seek relief from the nearest Regional Agrarian Reform Adjudicator s (RARAD) or the Provincial Agrarian Reform Adjudicators (PARAD) to compel the a gricultural lessor to comply with this obligation in case of refusal, neglect or resistance on the part of the lessor. Prohibition to the Agricultural Lessor 1. 2. 3. 4. 5. To dispossess the agricultural lessee of his landholding except upo n authorization by the court under Section 36. To require the agricultural lesse e to assume, the payment of the taxes on the landholding; To require the agricul tural lessee to assume, any part of the rent, to pay to third persons for the us e of the land; To deal with millers or processors without written authorization of the lessee; To discourage, the formation, maintenance or growth of unions or organizations of agricultural lessees in his landholding. Ground for Disposition of Agricultural Lessee 1. When the landholding is declare d by the Department Head to be suited for residential, commercial, industrial or some other urban purposes; 2. Failure to comply with any of the of the terms an d conditions of the contract of lease; 3. Planting of crops or used the landhold ing for a purpose other than what had been previously agreed upon; 4. Failure to adopt proven farm practices as determined under paragraph 3 of Section twenty-n ine; 5. When through fault or negligence of the lessee, the land or other substa ntial permanent improvement thereon is substantially damaged or destroyed or has reasonably deteriorated; 6. Failure to pay the lease rental when it falls due; 7. Employment of a sub-lessee. The above causes are grounds for ejectment of an agricultural lessee only after observance of due process. Lessee's Right of Pre-em ption and Redemption In case the agricultural lessor decide to sell the landhold ing, the agricultural lessee shall have the preferential right to buy the same u nder reasonable terms and conditions: each shall be entitled to said preferentia l right only to the extent of the area actually cultivated by him. The right of pre-emption may be exercised within one hundred eighty (180) days from notice in writing, which shall be served by the owner on all lessees affected and the Dep artment of Agrarian Reform.

He must either tender payment of, or present a certificate from the Land Bank th at it shall make payment pursuant to Sec. 80 of this Code. If the latter refuses to accept such tender or presentment, he may consign it with the Court. Any dis pute as to reasonableness of the terms and conditions, may be brought by the les see or by the Department of Agrarian Reform to the proper Court of Agrarian Rela tions. Comments: The right of pre-emption as distinguished from redemption, is t he right to purchase the property from the agricultural lessor by the lessees wh ich is exercised before it is sold to a third person other than the lessee. The lessee may consign the purchase money with the Department of Agrarian Reform. Le ssee's Right of Redemption In case the landholding is sold to a third person witho ut the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: where there are two or more agricultural lessees, each shall be entitled to said right of redemption on ly to the extent of the area actually cultivated by him. The right of redemption under this Section may be exercised within one hundred and eighty days from not ice in writing. Upon the filing of the petition, the said period o one hundred a nd eighty days shall cease to run. Any petition shall be resolved within sixty d ays. The Department of Agrarian Reform shall initiate, while the Land Bank shall finance, said redemption as in the case of pre-emption. Right to Self-organizat ion The farmworkers shall have the right to self-organization and form, join or assist farmworkers' organizations of their own choosing for the purpose of collect ive bargaining through representatives of their own choosing. Bill of Rights for Agricultural Labor: 1. 2. 3. 4. Right to self organization; Right to engage in concerted activities. Right to minimum wage; Right to work for not more than eig ht hours;

5. Right to claim for damages for death or injuries sustained while at work; 6. Right to compensation for personal injuries; death or illness; 7. Right against suspension or lay-off. Comments: The right to self organization includes the rig ht to strike and hold picket in order to compel the management in the case of la rge scale plantations and multinational corporations to meet the demands of the farm workers for wage increase and better working conditions. Irrigation Facilit ies Permanent irrigation system may be constructed at the expense of the lessor: 1. Should the lessor refuse to bear the expenses, he should not be entitled to the increase in rental and shall upon the termination of the leasehold relations hip pay the lessee or his their the reasonable value of the improvements at the time of the termination; 2. Should the lessor bear expenses he shall be entitled to an increase in the rental proportionate to the resultant increase in product ion. Management of Irrigation System 1. 2. When constructed and operated by the government. Lessees either as individuals or groups shall allocate not more than 25% of their rental collection to the government. Irrigation systems installed and / or constructed at expense of landowner or agricultural lessor acquisition of these irrigation system shall be initiated by the DAR to be financed by the L and Bank. Lease of Ricelands and Lands Devoted to Other Crops 1. 25% of the average normal harvest shall be the amount of rental for ricelands or estimated normal harvest during the three (3) agricultural years immediately preceding the establishment of the leasehold after deducting the expenses for seeds, cost of harvesting, th reshing, loading, hauling and processing; Average normal harvest for three (3) p receding years. No agreement as to rental the court (now DAR) shall fix a provis ional rental until fixed rental is determined within (30) days from submission o f the case for decision. 2. 3. Amortization Payment for Land under Leasehold:

The rentals paid by the lessee to the lessor at the place agreed upon by the par ties shall be credited as amortization payments for the purchase price of the la ndholding titled by the leasee: a) When the landholding is expropriated by the g overnment; b) When it is redeemed. Whatever balance remaining after crediting as amortization the rental paid, the same may be finances by the Land Bank in the same ratio and mode of payment provided under Section 80 of the Code. Default on the Part of the Lessee: Should the lessee incur default in the payment of at le ast three (3) installments on the loan, the lender shall immediately notify the Land Bank and the DAR so that appropriate steps shall be taken by these agencies : a) to answer for the default in case the failure is due to fortuitous event b) to take over the ownership and administration of the landholding. Where the cas e of the default is attributable to the lessee, the DAR shall endeavor to substi tute the defaulting amortization owner. In case the default is due to fortuitous event, the Land Bank shall assume the payment of the balance and the farmer sha ll be released from his obligation. Period of Prescription An action to enforce any cause of action accruing under this Code (R.A. No. 3844) shall be brought wi thin the period of three (3) years.