Terumot, Chapter Three, Mishnah Nine
Our mishnah teaches that if a non-Jew sets aside terumah, his act is valid and that which he designates terumah is indeed terumah.
1) Terumah given by a non-Jew or a Samaritan is terumah and their tithes are tithes and their dedications [to the Temple] are dedications.
2) Rabbi Judah says: the law of the vineyard in the fourth year is not applicable to a non-Jew.
a) But the sages say: it is.
3) The terumah of a non-Jew renders [produce into which it falls] medumma and [one who eats it unwittingly] is obligated [to pay back an extra] fifth.
a) But Rabbi Shimon exempts it.
Section one: Terumah, tithe or a dedication given by a non-Jew or a Samaritan is valid. Although a non-Jew is not liable to separate tithes or terumah, if he does so his action is valid. Other commentators explain that this law implies that it does not matter who owns the land, as long as the produce grew in the land of Israel, it is subject to the laws of terumah and tithes.
Section two: In the fourth year of the growth of a vineyard, the grapes must be brought to Jerusalem and consumed there. According to Rabbi Judah, a non-Jews vineyard is exempt from this law. In the Tosefta (a collection of laws that is somewhat of a companion to the Mishnah) it is explained that Rabbi Judah was only referring to Syria, the land that borders Israel. Rabbi Judah agrees with the sages that in the land of Israel itself, the non-Jews vineyard is subject to this law. The other sages hold that even in Syria the vineyard is subject to the laws of the fourth year. Both the sages and Rabbi Judah agree that during the first three years of the vineyards growth, its grapes may not be consumed anywhere.
Section three: This is the mishnahs way of saying that the terumah separated by a non-Jew is actually terumah. If it falls into non-sacred produce, it renders it medummaa mixture of terumah and non-sacred produce. If there are less than 100 parts non-sacred per part terumah, then the whole mixture can be eaten only by a priest. One who eats this terumah unwittingly, must pay back the value of that which he ate, plus another fifth.
Rabbi Shimon disagrees and holds that he is not liable for the extra fifth. According to the Tosefta and the Yerushalmi, Rabbi Shimon also disagrees with the other rules in this section and holds that if it falls into non-sacred produce, it does not cause the mixture to become medumma.