Thelma C. Muller v. Philippine National Bank

Summary

This ejectment case involved the Muller family's continued occupation of PNB-owned properties after their lease expired in 1987. Despite multiple demands for payment and vacation spanning nearly 20 years, the Mullers refused to pay rent or vacate. The lower courts differed on whether rental arrears could be collected from the initial demand or only from the final demand, and whether prescription applied. The Supreme Court ultimately ruled that when a lease expires and the lessee continues occupation, an implied lease is created under Article 1670 of the Civil Code, making the occupants liable for rent from the beginning of their unlawful detention. The Court emphasized principles of equity and fair play, rejecting the petitioners' attempt to avoid rental obligations. The decision establishes that lessees cannot escape payment obligations by simply waiting for demands to vacate, and that forced lease relationships create continuing rental liability even without owner consent.