ROSITA C. NADAYAG, COMPLAINANT, VS. ATTY. JOSE A. GRAGEDA, RESPONDENT.

Nadayag versus Grageda

The Case

This is an administrative case for disbarment or suspension, brought by Rosita C. Nadayag against Atty. Jose A. Grageda, a practicing attorney and notary public in Iligan City. The complainant charges the respondent with conduct unbecoming of a lawyer arising from his preparation and notarization of a pacto de retro sale in which she was the vendee a retro. The case matters because it fixes the standard of care owed by a lawyer who goes beyond the mechanical act of notarization and renders legal advice to the parties, and it reminds every candidate that notarization is not an empty routine.

Procedural History

The complainant filed her letter-complaint with the Supreme Court, accompanied by her affidavit. Pursuant to Rule 139-B of the Rules of Court and the resolution of the Court En Banc of April 12, 1988, the case was referred to the Commission on Bar Discipline of the Integrated Bar of the Philippines for investigation, report, and recommendation. The Commission scheduled hearings, but the complainant manifested that she could not proceed to Manila and attend to her case due to financial constraints, while the respondent could no longer be located, having moved without leaving any forwarding address. On the basis of the complaint, the supporting affidavit, and the respondent's counter-affidavit, the Commission found that there was reason for disciplining the respondent. The Integrated Bar of the Philippines Board of Governors recommended a penalty, and the case was resolved by the Supreme Court in this decision.

Facts

On January 21, 1987, in Iligan City, the respondent prepared and notarized a pacto de retro sale in which the complainant was the vendee a retro. The document was made using an original certificate of land title that had been stolen from the Office of the Register of Deeds of Iligan City. The complainant was swindled in the amount of one hundred eight thousand pesos, because the land sold to her by pacto de retro had already been sold ahead of time to another party, using the owner's duplicate copy of the title.

The complainant noticed that the original certificate of title had many annotations and old patches, and she brought the matter to the attention of the respondent while he was notarizing the document. He simply answered that the title was all right and told her not to worry, as he is an attorney and knew very well the vendor a retro, whose business transactions, especially notarial matters, had always been handled by him. The stolen original certificate of title was later confiscated by the Iligan City Register of Deeds when the complainant applied for registration of her pacto de retro.

In his counter-affidavit, the respondent alleged that the parties showed him a copy of the title, which he examined and found to be clear, with no annotation or entry, so he told them that as far as the title was concerned there were no encumbrances and it could be the subject of the pacto de retro. He translated the document into the Cebuano or Visayan dialect to make sure the parties understood the deed, asked whether they had anything to add or delete, and, after they signed, notarized the same in good faith based upon their documents.

Issues

• Whether or not the respondent, as a lawyer and notary public, is administratively liable for conduct unbecoming of a lawyer in connection with the preparation and notarization of the pacto de retro sale.
• Whether or not the respondent, having gone beyond the mechanical act of notarization and rendered legal advice to the parties, failed to exercise the conscientiousness and care required of a member of the Bar.

Applicable Provisions

The decision applies the duty of a lawyer to uphold the integrity and dignity of the legal profession, as stated in the canon it cites:

A lawyer shall at all times uphold the integrity and dignity of the legal profession.

This canon bears on the case because the respondent's reckless advice to the vendee a retro diminished public confidence in the fidelity, honesty, and integrity of the profession.

The decision also states the general ground for disciplinary action:

Generally, a lawyer may be disbarred or suspended for any misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, in honesty, probity, and good demeanor or unworthy to continue as an officer of the court.

This rule bears on the case because the respondent's professional indiscretion, though not shown to be dishonest, displayed a want of the care and good demeanor required of an officer of the court.

Ruling

On the first issue, the Court held the respondent administratively liable. The Commission on Bar Discipline found that the respondent admitted he was consulted by the vendor a retro and the complainant on the matter of the title when he was asked to notarize the deed of sale a retro, and that he rendered an opinion based on the title presented to him. That title was the original certificate of title, which only the Register of Deeds has custody of, and he should have sensed foul play or irregularity. As a lawyer and officer of the court, he should have been alerted and should have reported the irregularity of an original certificate of title in the possession of unauthorized persons. Even if it were a photostat copy, it bore no certification by the Register of Deeds which could have alerted him.

On the second issue, the Court held that the respondent transcended the bounds of a notary public. The Commission took special note of a notary public acting more than a notary public and going beyond mere certification of the presence of the signatories, their having signed, and having contracted. By transcending these bounds, such notary public has entered the realm of giving legal advice, thus acting also as counsel aside from notary public to the parties to the contract. Treated as counsel for the vendee, he had the legal duty to advise her properly of the irregularities and the dangers of holding the original certificate which should have been in the custody of the Register of Deeds. The respondent acted recklessly at the least in his advice to the vendee, and he rendered an opinion that was irresponsible and upon which his client relied, which recklessness is censurable.

The Court stressed that the respondent should have been conscientious in seeing to it that justice permeated every aspect of a transaction for which his services had been engaged, in conformity with the avowed duties of a worthy member of the Bar. He should have fully explained the legal intricacies and consequences of the subject transaction as would aid the parties in making an informed decision. Such responsibility was plainly incumbent upon him, and failing therein, he must face the commensurate consequences of his professional indiscretion. The Court closed with the reminder that notarization is not an empty routine, for notarization of a private document converts such document into a public one and renders it admissible in court without further proof of its authenticity.

Doctrine

A lawyer shall at all times uphold the integrity and dignity of the legal profession, and the trust and confidence reposed by clients require in the attorney a high standard and appreciation of his duty to his clients, his profession, the courts, and the public. A lawyer may be disbarred or suspended for any misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, in honesty, probity, and good demeanor or unworthy to continue as an officer of the court. A notary public who goes beyond mere certification of the presence of the signatories and their having signed and contracted enters the realm of giving legal advice, and as counsel he must fully explain the legal intricacies and consequences of the transaction so that the parties may make an informed decision. Notarization is not an empty routine, because it converts a private document into a public one and renders it admissible in court without further proof of its authenticity.

Disposition

The Court suspended Atty. Jose A. Grageda from the practice of law for three months commencing from his receipt of the resolution, with a warning that a repetition of the same or any other misconduct will be dealt with more severely, and ordered that a copy of the resolution be spread on his records and furnished to the Integrated Bar of the Philippines and circularized to all courts.

Remember This

Memorize the line that notarization is not an empty routine, for it converts a private document into a public one and renders it admissible in court without further proof of its authenticity. Examiners use this case to test the expanded duty of a notary public who renders legal advice, and the standard that recklessness in advising a client, even without proof of dishonesty, is censurable misconduct.