Exp. Adm. No. 800 - L. R. Aguinaldo and Co., Inc. vs. Velez

The case involves a complaint for malpractice filed by L.R. Aguinaldo & Co., Inc. (the recurrente).
The complaint was originally lodged due to alleged malpractices in connection with a transaction involving an embargoed property.
The matter was investigated by the Procurador General, who subsequently filed a formal complaint against the respondent, Teogenes Velez.

In Civil Case No. 2804, titled “L. R. Aguinaldo contra Dolores Store and Nicolas P. Caballero,” the applicant sought the collection of a monetary sum.
Nicolas P. Caballero, who later became central in the disputed transactions, appeared in that case with Teogenes Velez acting as his attorney.
On February 28, 1934, the court rendered judgment in favor of the recurrente, a decision that became final as no appeal was filed.

On May 11, 1934, a mandate for execution was issued, leading the sheriff of Misamis Oriental to embargo a parcel of land owned by Caballero in Camanian-an, Cagayan, Misamis Oriental.
Following mandatory publications, the sheriff sold the embargoed property on July 10, 1934 to the recurrente, issuing a certificate of sale on July 11, 1934.
The certificate of sale was not recorded with the registrar due to the property’s encumbrance by a mortgage in favor of Luzon Surety Co., Inc.

On December 2, 1935, after the lapse of the right of rescission, the sheriff issued a definitive deed of sale, which was later authenticated by the respondent in his capacity as Notary Public on December 16, 1935.
Prior to this, on April 12, 1935, the respondent authenticated another deed of sale for the same property, this time from Nicolas P. Caballero to Cleofe Velez, widow of Neri, who was also a client of the respondent.
In facilitating the registration of this second sale, the respondent had Caballero provide an affidavit asserting that the mortgage in favor of Luzon Surety Co., Inc. was granted for the fulfillment of obligations as an agent of a third party, and that the corresponding contract was not perfected.

As a result of the conflicting transactions and notarial acts, the recurrente has been unable to take possession of the property purchased at auction.
Additionally, the recurrente has not yet received the monetary credit awarded by the earlier judgment.
It is noted that when the respondent authenticated the April 12, 1935 deed, the same property had already been embargoed and sold to the recurrente.

The investigation centered on whether Teogenes Velez acted with malice or knew that the property was subject to a prior sale and embargo.
The investigating judge, Hon. Juez Benito Natividad, accepted the respondent’s explanation that he was unaware the sale on April 12, 1935 involved the same property already sold to the recurrente.
The investigation concluded that there was no sufficient evidence to show that the respondent acted in bad faith or intentionally co-operated in fraud, though there was a lapse in diligence.

The court observed that the respondent’s conduct exhibited negligence by “ratifying with ligereza” (light-handedly authenticating) the second deed of sale.
His subsequent authentication of the definitive sale deed on December 16, 1935, was cited as evidence of his overall good faith.
The decision ultimately called for an admonition for the respondent to exercise greater diligence in his future roles as both an attorney and Notary Public.

Whether Teogenes Velez, in his dual capacity as attorney and Notary Public, committed malpractice by authenticating the April 12, 1935 deed of sale of the embargoed property.
Whether his act of ratifying the deed for Cleofe Velez, despite the property's prior sale to the recurrente, constitutes negligent behavior amounting to malpractice.

Whether the respondent had actual or constructive knowledge that the property being sold in the April 12, 1935 transaction was the same property already embargoed and sold to the recurrente.
Whether any negligence on the part of the respondent should be imputed as bad faith or fraud.

Whether there exists compelling evidence to establish that the respondent acted with malice or deliberate intent to defraud the recurrente.
Whether the evidence of his subsequent authentication of the definitive sale counters the claim of malicious intent.