FACTS:

The case involves two separate disputes over the prescriptive period for the filing of complaints for specific performance. In the first case, the petitioner, represented by the Privatization and Management Office (PMO), filed a complaint against the respondents for specific performance, recovery of possession, and damages. The respondents offered to sell a parcel of land to a corporation, which eventually ceased its operations and transferred its equity to the APT. The APT, as the successor of the corporation, alleged that the respondents prevented them from entering the property and declared it under a different ownership. The complaint was dismissed by the RTC and affirmed by the Court of Appeals based on the statute of limitations, ruling that it was filed more than ten years after the written agreement was executed.

In the second case, the petitioner, Armed Forces and Police Savings & Loan Association, Inc. (APT), entered into a contract to buy a property from the respondents. The contract stipulated that the respondents would deliver the title upon payment of the full purchase price. However, despite several demands from APT, the respondents failed to deliver the title. APT filed a complaint for specific performance, recovery of possession, and damages, but it was dismissed by the trial court and the Court of Appeals, again based on the statute of limitations.

APT argues that the prescriptive period was interrupted due to a written acknowledgment of respondents' obligation and a demand made by the petitioner. A letter from the respondents affirmed their undertaking to claim full payment of the property upon presentation of a clean title and execution of a Deed of Sale. On the other hand, the respondents rely on Article 1144 of the Civil Code, which provides a ten-year prescriptive period for actions upon a written contract. They argue that the complaints were filed beyond the prescriptive period and were already barred by the Statute of Limitations.

ISSUES:

1. Whether Hojilla's letter dated 15 August 1984 serves as a written acknowledgment of debt or obligation of respondents.

2. Whether petitioner's letters dated 29 May 1991 and 24 October 1991 are demand letters sufficient to interrupt the prescriptive period.

3. Whether petitioner's letter dated 6 July 1999 effectively interrupts the prescriptive period.

4. Whether Hojilla's SPA grants authority to fulfill respondents' obligations in the Contract.

5. Whether Hojilla had the authority to execute the Contract and receive demand letters on behalf of respondents.

6. Whether Hojilla's actions bind respondents.

7. Whether respondents are estopped by the acts and representations of their agent.

8. Whether respondents are solidarity liable for Hojilla's actions.

9. Whether the respondents are bound by the actions of their agent, Hojilla, through agency by estoppel or apparent authority.

10. Whether the demand letters sent by the petitioner interrupted the prescriptive period for filing an action.

11. Whether or not the complaint filed by the petitioner is barred by prescription.

RULING:

1. Yes. Hojilla's letter dated 15 August 1984 serves as a written acknowledgment of debt or obligation of respondents. Therefore, it interrupts the running of the prescriptive period and sets the same running anew.

2. Yes. Petitioner's letters dated 29 May 1991 and 24 October 1991 are demand letters sufficient to interrupt the prescriptive period. These letters demanded respondents to return the properties, discontinue construction and occupancy, and unlock the gates, which enforce respondents' obligations under the Contract.

3. Yes. Petitioner's letter dated 6 July 1999 effectively interrupts the prescriptive period despite the argument that the complaint had long prescribed, the letter was addressed to the wrong party, and there was no proof of service or receipt.

4. Yes. Hojilla's SPA grants authority to fulfill respondents' obligations in the Contract, particularly with regard to the registration of the subject property.

5. The lower courts interpreted the scope of Hojilla's authority as limited to the registration of the subject property under the name of his principal and all necessary acts for such purpose. The court ruled that Hojilla was not authorized to execute the Contract or receive demand letters on behalf of respondents.

6. The court ruled that Hojilla's actions bind respondents because there was an express authority granted to Hojilla to represent respondents as evidenced by the Special Power of Attorney (SPA).

7. The court held that respondents are estopped by the acts and representations of their agent because Hojilla continuously represented himself as the duly authorized agent of respondents, authorized to administer the subject property, register the property, and represent respondents with regard to their obligations in the Contract.

8. The court stated that even if Hojilla exceeded his authority, respondents are still solidarity liable because they allowed Hojilla to act as though he had full powers by impliedly ratifying his actions through action by omission.

9. The respondents are bound by the actions of their agent, Hojilla, through agency by estoppel or apparent authority. The respondents knowingly permitted Hojilla to represent them and failed to repudiate his acts, thus they are estopped from repudiating Hojilla's authority and his actions are binding upon them.

10. The demand letters sent by the petitioner interrupted the prescriptive period for filing an action. The new ten-year period for filing a case by the petitioner should be counted from the date of the first demand letter, which was 29 May 1991, and ended on 29 May 2001.

11. The complaint filed by the petitioner is not barred by prescription.

PRINCIPLES:

• A written acknowledgment of debt or obligation effectively interrupts the running of the prescriptive period and sets it running anew.

• Demand letters to enforce obligations under a contract can interrupt the prescriptive period.

• The authority granted in a special power of attorney (SPA) can serve as a basis for fulfilling obligations under a contract.

• Construction of contracts should not prejudice or obstruct justice, but should attain justice.

• In a contract of agency, the agent acts for and in behalf of the principal on matters within the scope of the authority conferred upon him, and the acts of the agent have the same legal effect as if they were personally done by the principal.

• Representations and guarantees made by the agent are considered representations and guarantees of the principal.

• The principle of agency by promissory estoppel holds that the acts and representations of the agent can estop the principal from contradicting or going back on them.

• The principle of agency by estoppel applies when a party allows an agent to act as though he had full powers, thereby impliedly ratifying the agent's actions.

• Principle of agency by estoppel or doctrine of apparent authority: The principal is bound by the acts of the agent with the apparent authority which he knowingly permits the agent to assume or which he holds the agent out to the public as possessing.

• Jurisdiction of the Court limited to reviewing errors of law: The Court's jurisdiction is limited to reviewing errors of law, and findings of fact by the Court of Appeals are conclusive.

• Exceptions to the rule on conclusive findings of fact: The rule on conclusive findings of fact by the Court of Appeals has exceptions, including when the conclusion is grounded entirely on speculations, surmises, or conjectures; when there is grave abuse of discretion; when the findings are based on a misapprehension of facts; when the findings are contrary to the trial court's findings; and when the findings are contrary to the evidence on record.

• Prescription of actions and interruption: An action based on a written contract must be brought within ten years from the time the right of action accrued. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by the debtor.

• Prescription period for filing a case is to be counted from the date the cause of action accrues.

• A new demand letter can effectively interrupt the prescriptive period.

• In the absence of a clear stipulation in the contract, payment shall only be made upon the presentation of the title and other required documents.

• Parties' true intent can be determined from the stipulations in the contract and their correspondence.

• A party cannot benefit from their own inaction and failure to comply with their obligations.