Pagaza was born in the Basque Country and played as a forward most of his career. He competed for Arenas de Guecho (1912-16, 1918-21), but also played in Madrid for Atlético de Madrid (1916-18) and Racing Club de Madrid (1927-28). As there was no professional football at that time in Spain, he worked in the harbour of Santander and during that time he played for Racing de Santander (1921-23, 1924-27) and Gimnástica de Torrelavega (1923-24). In 1915 he was on the Selección Norte team that won the inaugural Copa Príncipe de Asturias, but his most successful year was 1919 when he won the Campeonato Regional de Vizcaya and the Copa del Rey (Spanish Cup) with Arenas de Guecho. Pagaza was in the line-up of the first-ever Spanish international match played during the 1920 Games. He competed in four matches at the Olympics and earned a total of seven caps between 1920 and 1922, but failed to score.
Soon after his active career he started coaching. He coached Racing de Santander thrice – 1929-30 and 1932-33 in the Primera División (First Division) and 1941-43 in the Segunda División (Second Division). Pagaza also coached Atlético Osasuna 1930-31, Tercera División (Third Division), Sporting de Gijón 1933-34 Segunda División (Second Division) and, after the Spanish Civil War, which caused a three-year league hiatus, RCD Mallorca, Hércules de Alicante, and Elche CF.