Upholding Contractual Obligations in Agrarian Reform: The Binding Effect of Deeds of Assignment

The Binding Effect of a Deed of Assignment

A landowner who accepts payment and signs a deed of assignment in an agrarian reform case cannot later demand a higher price for the same land. In Heirs of Roque F. Tabuena v. Land Bank of the Philippines (G.R. No. 180557, September 26, 2008), the Supreme Court affirmed that a voluntarily executed deed, coupled with the passage of time, bars a claim for increased valuation. The ruling clarifies how contractual obligations and procedural rules apply in agrarian compensation disputes.

The Facts of the Case

The petitioners were landowners whose 26.25-hectare riceland in Sorsogon was placed under the coverage of Presidential Decree No. 27, the agrarian reform decree. The Department of Agrarian Reform (DAR) valued the property at P4,398.00 per hectare, totaling P105,572.48. The landowners executed a Deed of Assignment of Rights in favor of the Land Bank of the Philippines (LBP) on October 10, 1979, acknowledging receipt of payment in cash and bonds "to their full satisfaction."

Twenty years later, in September 2000, the landowners filed a complaint for determination and payment of just compensation, claiming the valuation was unreasonably low. They argued they had not been fully paid and sought a higher amount. The Regional Trial Court (RTC) fixed just compensation at P4,855,000.00, but the Court of Appeals reversed, dismissing the complaint. The landowners appealed to the Supreme Court.

The Issue

The central issue was whether the landowners could still question the valuation and seek additional compensation despite having executed a Deed of Assignment of Rights and accepted payment two decades earlier.

The Ruling

The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that the Deed of Assignment of Rights was binding and had extinguished the landowners' claim. The deed expressly stated that the landowners acknowledged receipt of full compensation and assigned, transferred, and conveyed all their rights over the property to LBP.

The Court rejected the landowners' argument that the deed should not have been considered because it was not formally offered in evidence. While courts generally cannot consider evidence not formally offered, the Court noted an exception: evidence may be admitted if it was identified by testimony, recorded, and incorporated in the case records. Here, the deed was attached to LBP's answer as an affirmative defense. The landowners failed to specifically deny its genuineness and due execution under oath, which the Rules of Court treat as a judicial admission of its authenticity.

The Court also dismissed the claim of duress. The landowners alleged they signed the deed during Martial Law, but offered no evidence to support this bare allegation. The Court noted that laches had set in—the landowners waited over 20 years to challenge the deed, which is an unreasonable and unexplained delay that warrants a presumption of abandonment of the claim.

The Role of LBP and the Proper Remedy

The Court also addressed the landowners' argument that LBP could not appeal independently of DAR. The Court held that LBP is an indispensable party in just compensation cases. Under Section 74 of Republic Act No. 3844 and Section 64 of Republic Act No. 6657, LBP is vested with the primary responsibility for valuation and compensation in agrarian reform. It may agree or disagree with DAR and the landowner, and may bring the matter to court for judicial determination.

The Court further clarified the proper procedure under Section 16 of RA 6657: a landowner who disagrees with DAR's valuation must bring the matter to the Regional Trial Court acting as a Special Agrarian Court within 15 days from receipt of the DAR decision. Filing a separate action years later, after accepting payment, is not the correct remedy.

Practical Takeaways

• A deed of assignment is a binding contract. Signing one that acknowledges full payment extinguishes the claim for additional compensation, absent clear evidence of fraud, duress, or mistake.
• Failure to deny a document under oath is fatal. Under Rule 8, Sections 7 and 8 of the Rules of Court, the genuineness and due execution of a document attached to a pleading are deemed admitted unless specifically denied under oath.
• Delay can bar a claim. Laches—unreasonable and unexplained delay in asserting a right—can defeat an otherwise valid claim, especially when the delay spans decades.
• LBP is an indispensable party in agrarian just compensation cases and may appeal independently of DAR.
• Know the prescribed remedy and period. A landowner who disagrees with DAR's valuation must file the case in the proper court within 15 days from receipt of the decision, not years later.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.