Bank of the Philippine Islands v. Gregorio Yulo

Summary

This 1915 Supreme Court case involved a mortgage foreclosure action by Bank of the Philippine Islands against Gregorio Yulo for P43,212.95. The defendant appealed the lower court's judgment arguing that properties should be sold for aliquot parts as provided in the mortgage, and that attorney's fees should not be awarded. The Supreme Court affirmed the judgment with modification, holding that foreclosure procedures must follow the Code of Procedure in Civil Actions rather than Civil Code provisions, even when the mortgage contains different terms. However, the Court modified the attorney's fees award, ruling that the mortgage clause 'por gastos y costas' was intended to cover only actual costs and expenses incurred in foreclosure, not a fixed P2,000 attorney's fee. The decision established important precedent on mortgage foreclosure procedures and the interpretation of attorney's fee clauses in mortgage contracts, emphasizing that parties cannot contravene statutory foreclosure procedures through private agreement.