Monsanto vs. Zerna

A regular court trying a criminal case has jurisdiction to determine criminal liability and civil liability arising from the crime, but it cannot adjudicate civil awards that are intertwined with an agrarian dispute, which falls within DARAB’s primary and exclusive jurisdiction; lack of jurisdiction over the subject matter may be raised at any stage, even on appeal.

Monsanto owned an agricultural property in Tonggo, Mimbalot, Buru-un, Iligan City, where the Zernas worked as overseers of banana plants and claimed a tenancy relationship over the land. The dispute unfolded against the agrarian reform regime under Executive Order No. 229, Executive Order No. 129-A, and Republic Act No. 6657, which vests DARAB with primary jurisdiction over agrarian disputes.

Jesus and Teresita Zerna were charged with qualified theft in Criminal Case No. 5896 before the RTC of Lanao del Norte, Branch 6, which was later re-raffled to Branch 4. The charge concerned the harvesting of coconuts on land owned by Leonarda Monsanto, where the Zernas had been overseeing banana plants and claimed a tenancy relationship. The Information was amended on June 8, 1995 and alleged that on or about February 25, 1995 up to March 1995, in Iligan City, the Zernas, conspiring and helping each other, being overseers of banana plants on Monsanto’s land principally devoted to coconut trees and having access to the land as such, with grave abuse of confidence, intent to gain, and without Monsanto’s consent, took, stole, harvested, and carried away coconuts from the plantation, processed them into copra with a total value of P6,162.50, to Monsanto’s damage and prejudice.

After trial on the merits, the RTC acquitted the Zernas on July 24, 1996. It found that the harvest was done not to steal the coconuts or copra but to confirm their claim as tenants; the lack of intent to gain was shown by their immediate deposit of the proceeds with the barangay captain and their failure to claim a share in the copra proceeds. The RTC also found that the Zernas were not tenants and that the cash deposit from the copra proceeds belonged to Monsanto, but because there was no intent to gain, no criminal liability for theft was committed. It dismissed the criminal case, cancelled the bail bond, and ordered the barangay captain of Buru-un, Iligan City to deliver P5,162.50 to Monsanto.

The total proceeds of the copra sale alleged in the Information was P6,262.50, but the amount deposited by the Zernas with the barangay secretary of Buru-un on March 2, 1995 was P5,162.50 after deducting P340 for harvesting cost and P760 for labor cost. Monsanto filed a timely Motion for Reconsideration praying that the remaining P1,100 be returned to her. On September 4, 1996, the RTC granted the motion and ordered the Zernas to return P1,100 to Monsanto, rejecting their claim to compensation.

The records included a Kasabutan dated November 25, 1991, in which Monsanto allowed Jesus Zerna to oversee her banana plants under an agreement that he would be paid for his labor for each banana plant cut in Tonggo, and allowed him to plant coconut, coffee, jackfruit, and cacao on the land under the same agreement. The records also contained receipts showing several remittances by the Zernas to Monsanto for the harvesting of agricultural products.

On appeal, the CA set aside the September 4, 1996 RTC Order and held that the RTC had no jurisdiction to order the return of P1,100 because the dispute involved an agricultural tenancy relationship within DARAB’s primary and exclusive original jurisdiction. The CA denied Monsanto’s Motion for Reconsideration on March 16, 2000, prompting her to file this Petition for Review under Rule 45.

• DARAB Jurisdiction: Petitioner raised the issue whether the RTC was automatically divested of jurisdiction over a criminal case where an agrarian issue is argued as a defense, no matter how flimsy.
• Tenancy as Defense: Petitioner claimed that private respondents were not her tenants and that they raised the defense of tenancy in the criminal case merely to escape prosecution for qualified theft.
• Finality of Acquittal and Scope of Appeal: Petitioner argued that the CA had no competence to review the RTC Decision that had become final because it was not appealed, based on a Notice of Appeal specifically and simply directed against an adscititious Order issued subsequent to that Decision.
• Jurisdiction Not Raised on Appeal: Petitioner argued that jurisdiction was not raised as an issue in the appeal, so the CA should not have ruled on it.

• Tenancy: Private respondents asserted that they were petitioner’s tenants, as shown by the evidence adduced before the RTC.
• Compensation: Private respondents contended that the P1,100 was their compensation pursuant to their tenurial arrangement with petitioner.

• DARAB Jurisdiction: Whether the RTC had jurisdiction to order the return of P1,100 as civil liability after acquitting private respondents of qualified theft, or whether the matter is an agrarian dispute within DARAB’s primary and exclusive jurisdiction.
• Finality of Acquittal and Scope of Appeal: Whether the CA’s annulment of the September 4, 1996 RTC Order annulled the July 24, 1996 acquittal or divested the RTC of criminal jurisdiction, and whether the CA had competence to review the RTC Decision that had become final based on a Notice of Appeal directed only against an adscititious Order.
• Lack of Jurisdiction Not Waived: Whether the CA could rule on lack of jurisdiction over the subject matter even if it was not raised as an issue in the appeal.

• DARAB Jurisdiction: No. The RTC had criminal jurisdiction to try and acquit the Zernas, but it acted beyond jurisdiction in ordering the return of P1,100 as civil liability because the amount was intertwined with an agrarian dispute within DARAB’s primary and exclusive jurisdiction.
• Finality of Acquittal and Scope of Appeal: No. The CA did not annul the July 24, 1996 acquittal; it only set aside the September 4, 1996 Order. An acquittal is final immediately after promulgation and cannot be recalled for correction or amendment.
• Lack of Jurisdiction Not Waived: Yes. Lack of jurisdiction over the subject matter may be raised at any stage, even on appeal; the CA could rule on it even if not raised as an issue in the appeal.

• DARAB Jurisdiction: The SC began with the rule that the filing of a criminal action carries with it the civil liability arising from the offense, but the trial court cannot adjudge civil matters beyond its competence and powers. The RTC had criminal jurisdiction to try the Zernas for qualified theft and to determine guilt and the civil liability arising from the crime. However, the RTC treated the return of P1,100 as part of the civil aspect and ordered it returned after acquitting the Zernas. The SC held that the resolution of who was entitled to the P1,100 fell squarely within DARAB’s jurisdiction. Executive Order No. 229 vested the Department of Agrarian Reform with quasi-judicial powers to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over the implementation of agrarian reform, except matters under the DENR and the Department of Agriculture. Section 13 of Executive Order No. 129-A created DARAB to decide agrarian reform cases. Under Section 1, paragraph (a), Rule II of the Revised Rules of Procedure of DARAB, DARAB exercises primary jurisdiction, both original and appellate, to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of agrarian laws. Section 3(d) of Republic Act No. 6657 defines an agrarian dispute as any controversy relating to tenurial arrangements over lands devoted to agriculture. The SC found that an agrarian dispute existed: the subject of the dispute was the taking of coconuts from Monsanto’s property; the Zernas were overseers under the Kasabutan dated November 25, 1991; Monsanto allowed them to plant coconut, coffee, jackfruit, and cacao; and a tenurial arrangement existed as regards the harvesting of agricultural products, shown by several remittances substantiated by receipts. A tenancy relationship may be established verbally or in writing, expressly or impliedly under Section 7 of Republic Act No. 1199, and being overseers does not foreclose being tenants under Rupa vs. Court of Appeals. The SC also listed the indispensable elements of a tenancy relationship from Estates Development Corporation vs. Court of Appeals: (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose is to bring about agricultural production; (5) there is personal cultivation by the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee. Because the P1,100 was inextricably intertwined with the agrarian dispute, DARAB had jurisdiction, and the RTC should have confined itself to determining whether the Zernas were guilty of qualified theft instead of automatically awarding the proceeds of the copra sale to Monsanto.
• Finality of Acquittal and Scope of Appeal: The SC held that the CA Decision merely set aside the September 4, 1996 RTC Order directing the Zernas to pay P1,100 to Monsanto; it did not annul the July 24, 1996 RTC Decision acquitting the Zernas of qualified theft. Being an acquittal, the judgment became final immediately after promulgation and could not be recalled for correction or amendment, as held in People vs. Sison. The SC also noted that where there is no crime committed, there can be no civil liability arising from the criminal action or as a consequence thereof, as held in People vs. Pantig. The SC observed that this ruling has been modified by the current Rules: paragraph 2 of Section 2, Rule 120 of the Rules of Court provides that in case of acquittal, the judgment shall state whether the evidence of the prosecution absolutely failed to prove guilt or merely failed to prove guilt beyond reasonable doubt, and in either case, the judgment shall determine if the act or omission from which civil liability might arise did not exist. In this case, however, the RTC did not have jurisdiction to make a finding on the civil liability of the accused who were acquitted.
• Lack of Jurisdiction Not Waived: The SC rejected petitioner’s argument that the CA should not have ruled on jurisdiction because it was not raised as an issue in the appeal. As a general rule, an appeal is limited to a review of the specific legal issues raised by the parties, but even if not raised, an error in jurisdiction may be taken up. Lack of jurisdiction over the subject matter may be raised at any stage of the proceedings, even on appeal, as held in Del Rosario vs. Mendoza, La Naval Drug Corporation vs. Court of Appeals, and De Leon vs. Court of Appeals. The reason is that jurisdiction over the subject matter is conferred by law, not by the courts or the parties themselves. The RTC had jurisdiction to decide the criminal case against the Zernas, but it acted beyond its jurisdiction when it effectively ruled on the agricultural tenancy relationship between the parties. Private respondents had raised the issue of tenancy by way of defense, and the acts complained of by petitioner—the harvesting of the coconuts, their conversion into copra, and the sale thereof—were interwoven with the agrarian dispute. The RTC should have confined itself to determining whether the Zernas were guilty of qualified theft instead of awarding the proceeds of the copra sale to Monsanto. Such matter, being an offshoot of the agrarian dispute, is cognizable exclusively by DARAB.

• Civil Liability Arising from Crime — A criminal action carries with it the civil liability arising from the offense, but where no crime is committed, no civil liability can arise from the criminal action. Under the current Rule 120, Section 2, an acquittal judgment must determine whether the act or omission from which civil liability might arise did not exist. In this case, the RTC acquitted the Zernas for lack of intent to gain, so no civil liability for qualified theft could arise; the RTC could not nonetheless award the P1,100 because that matter was an agrarian dispute.
• DARAB’s Primary and Exclusive Jurisdiction over Agrarian Disputes — DARAB has primary jurisdiction, both original and appellate, over agrarian disputes, cases, controversies, and matters or incidents involving the implementation of agrarian laws. An agrarian dispute is any controversy relating to tenurial arrangements over agricultural land. The SC found an agrarian dispute existed because the subject was the taking of coconuts, the Zernas were overseers under the Kasabutan, Monsanto allowed them to plant coconut, coffee, jackfruit, and cacao, and there were remittances for harvested products. The P1,100 was inextricably intertwined with that dispute, so DARAB, not the RTC, had jurisdiction.
• Elements of Tenancy Relationship — For DARAB to have jurisdiction, a tenancy relationship must exist. The indispensable elements are: (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose is to bring about agricultural production; (5) there is personal cultivation by the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee. The SC applied these elements and found an agrarian dispute based on the Kasabutan, the allowed planting, and the remittances.
• Tenancy May Be Established Verbally or in Writing; Overseer May Also Be Tenant — A tenancy relationship may be established verbally or in writing, expressly or impliedly. Being an overseer does not foreclose being a tenant. The SC held that the Kasabutan contradicted Monsanto’s claim that the Zernas were mere overseers and that their status as overseers did not prevent them from also being tenants.
• Lack of Jurisdiction Not Waived — Lack of jurisdiction over the subject matter may be raised at any stage of the proceedings, even on appeal, because jurisdiction is conferred by law and not by the courts or the parties. The SC held that the CA could rule on the RTC’s lack of jurisdiction over the agrarian dispute even if jurisdiction was not raised as an issue in the appeal.
• Finality of Acquittal — An acquittal is final immediately after promulgation and cannot be recalled for correction or amendment. The SC held that the CA did not annul the July 24, 1996 acquittal; it only set aside the September 4, 1996 Order awarding P1,100.

• "The filing of a criminal action carries with it the civil liability arising from the offense. However, the trial court cannot adjudge civil matters that are beyond its competence and powers. Thus, while a court 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." — This passage states the core ratio: the RTC could try the criminal charge but could not award civil relief tied to the agrarian relationship.
• "Where the civil liability which is included in the criminal action is that arising from and as [a] consequence of the criminal act, and the defendant was acquitted in the criminal case, no civil liability arising from the criminal charge could be imposed upon him. The liability of the defendant for the return of the amount so received by him may not be enforced in the criminal case but in a civil action for the recovery of the said amount." — The SC quoted People vs. Pantig on the rule that acquittal bars civil liability arising from the criminal charge, while noting that the current Rules modified this ruling.
• "Lack of jurisdiction over the subject matter may be raised at any stage of the proceedings -- even on appeal." — This is the basis for allowing the CA to rule on the RTC’s lack of jurisdiction even if the issue was not raised in the appeal.
• "An agrarian dispute refers to any controversy relating to tenurial arrangements -- whether leasehold, tenancy, stewardship or otherwise -- over lands devoted to agriculture, including (1) disputes concerning farm workers' associations; or (2) representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangement." — This definition supported the SC’s holding that the P1,100 dispute fell within DARAB’s jurisdiction.

• People vs. Pantig, 97 Phil. 748, 749, October 25, 1955 — Cited for the rule that where the civil liability included in the criminal action arises from the criminal act and the defendant is acquitted, no civil liability arising from the criminal charge may be imposed; the SC noted this has been modified by the current Rules.
• People vs. Sison, 105 Phil. 1249, 1250, January 30, 1950 — Cited for the rule that an acquittal is final immediately after promulgation and cannot be recalled for correction or amendment.
• Estates Development Corporation vs. Court of Appeals, 335 SCRA 29, 38, July 5, 2000 — Cited for the indispensable elements of a tenancy relationship for DARAB jurisdiction.
• Rupa vs. Court of Appeals, 323 SCRA 153, 164 — Cited for the rule that being overseers does not foreclose being tenants.
• Del Rosario vs. Mendoza, G.R. No. 136308, January 23, 2001 — Cited for the exception that lack of jurisdiction over the subject matter may be considered by the reviewing court even if not raised below.
• La Naval Drug Corporation vs. Court of Appeals, 236 SCRA 90, August 31, 1994 — Cited for the rule that lack of jurisdiction over the subject matter may be raised at any stage and that jurisdiction is conferred by law.
• De Leon vs. Court of Appeals, 245 SCRA 166, June 19, 1995 — Cited for the rule that an error in jurisdiction may be taken up even if not raised.

• Section 2, Rule 120, Rules of Court — In case of acquittal, the judgment shall state whether the evidence of the prosecution absolutely failed to prove guilt or merely failed to prove guilt beyond reasonable doubt; in either case, the judgment shall determine if the act or omission from which civil liability might arise did not exist. The SC noted this modified People vs. Pantig, but held that the RTC did not have jurisdiction to make a finding on the civil liability of the acquitted accused.
• Executive Order No. 229 — Vested the Department of Agrarian Reform with quasi-judicial powers to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over the implementation of agrarian reform, except matters under the DENR and the Department of Agriculture.
• Section 13, Executive Order No. 129-A — Created DARAB with the power and function to decide agrarian reform cases.
• Section 1, paragraph (a), Rule II, Revised Rules of Procedure of DARAB — DARAB has primary jurisdiction, both original and appellate, over agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under Republic Act No. 6657, Executive Order Nos. 229, 228, and 129-A, Republic Act No. 3844 as amended by Republic Act No. 6389, Presidential Decree No. 27, and other agrarian laws; specifically, cases involving the rights and obligations of persons engaged in the cultivation and use of agricultural land covered by the CARP and other agrarian laws.
• Section 3(d), Republic Act No. 6657 — Defines an agrarian dispute as any controversy relating to tenurial arrangements over lands devoted to agriculture, including disputes concerning farm workers’ associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial arrangement.
• Section 7, Republic Act No. 1199 — A tenancy relationship may be established verbally or in writing, expressly or impliedly.
• Revised Penal Code and Civil Code — The SC classified civil liability as arising from crime, breach of contract, or tortious act, with the first governed by the Revised Penal Code and the second and third by the Civil Code.