Facts:

- A part of a parcel of irrigated land owned by Veneranda Paler was being rented out to spouses
Vanzuela, herein respondents, for a lease rental of 12 1/2 cavans of palay at 45 cavans per harvest.
Spouses were not able to pay the lease rent since 1997 amounting to a total of Php80,000. Veneranda
instituted a case of Estafa against respondents in the Department of Agrarian Reform, but an amicable
settlement was not met by the parties therein. Veneranda then filed the case with the RTC who then
dismissed it contending that they have no jurisdiction over the subject matter of the case as it involves an
agrarian dispute, which only the DARAB may adjudicate. Hence this petition.

- The petitioner avers that no agrarian reform law confers criminal jurisdiction upon the DARAB as it only
tries cases concerning civil and administrative aspects in the implementation of agrarian reform law and
that a criminal case for Estafa instituted against an agricultural tenant is within the jurisdiction and
competence of regular courts of justice. Furthermore, the petitioner contends that there is no such law
chich prohibits the prosecution of agricultural tenants for Estafa and to insulate the latter from criminal
prosecution would make them a class of their own which cannot be validly done because there is no such
law allowing such classification.

- The respondent spouses on the other hand contend that the share tenancy is now automatically
converted into leasehold tenancy, where the only obligation of the agricultural tenant is to merely pay the
rentals and not to deliver the land owners share. The share tenancy has already been abolished by the
law long before, as it is contrary to public policy. Thus, the spouses cannot be charged of the criminal
crime of Estafa for not delivering the cavans due since 1997, but a simple case of ejectment and
collection of unpaid lease rentals would suffice. To elaborate on this, the respondents further aver that the
liability of an agricultural tenant is a mere monetary civil obligation and that an agricultural tenant who fails
to pay the landowner becomes merely a debtor.

Issues:

Whether the RTC erred in dismissing the case for having no jurisdiction over the subject matter of the
case, as it is considered an agrarian dispute which should be tried by the DARAB.

Whether an agricultural tenant who fails to pay lease rentals on the land tilled can be successfully
prosecuted for the criminal crime of Estafa.

Ruling:
First Issue: Jurisdiction of the courts RTC vs. DARAB - The Supreme Court ruled that the RTC erred
in dismissing the case for having no jurisdiction. Three important requisites must concur in oder for a
court to acquire jurisdiction over a case:

1. The court must acuire jurisdiction over the sbject matter of the case

2. The court must acquire jurisdiction over the territory where the offense was committed

3. The courts must acquire jurisdiction over the person of the accused.

In this case, the courts acquired jurisdiction over the subject matter because the law confers on it the
power to hear and decide cases involving Estafa. It also acquired jurisdiction over the offense charged as
the crime was committed within its territorial jurisdiction. Lastly, the respondents in voluntarily submitting
themselves to the RTC's authority conferred within the said court jurisdiction over their persons. DARAB
on the other hand, has no criminal authority to try criminal cases at all, since the law and the DARAB
rules are silent n the conferment of any criminal jurisdiction in favor of them. However, it is important to
note that while a regular court of justice may have authority to pass upon the criminal liability of the
accused, it cannot make any civil awards that relate to the agrarian relationship of the parties because
this matter is beyond its jurisdiction and correlatively, as indicated in Executive Order 229, 129-A, section
50 of RA 6657 and Rule II of the DARAB 2003 Rules of Procedure, such functions are within the
DARAB's exclusive domain.

Second Issue: Criminal charge of Estafa for failure of an agricultural tenant to pay lease rentals. –

No. The Supreme Court held that the respondents cannot be held liable under Article 315, par. 4 No. 1(b)
of the Revised Penal Code since the share tenancy has been outlawed for being contrary to public policy
as early as the 1963's with the passage of RA 3844, what prevails today under RA 6657 is agricultural
leasehold tenancy relationship, and all instances of share tenancy have been automatically converted into
leasehold tenancy. Thus, the tenant's obligation is simply to pay rentals and not deliver the landowner's
share.

- Furthermore, the misappropriated palays, as alleged by the petitioners, by the respondents were not
given to them in trust or on commission or for administration, or under any obligation involving the duty to
make delivery of or return the same. What was given was the land tilled with palay. What was
misappropriated were the fruits of the land which was entrusted to him for cultivation and the crime if any
should have been for accounting the delivery of the landlord's share in the crops sold by the respondents
(as applied int he words of Justice Teodoro R. Padilla).