SEC Adm. Case No. 09-08-98 Mherrynoll Montessori School, Inc.

Securities and Exchange Commission SEC Bidg., EDSA, Greenhills, Mandaiuyong City Republic of the Philippines

In the Matter of MHERRYNOLL MONTESSORI School, Inc. Department, Compliance and Enforcement Petitioner. SEC Admin Case No. 09-08-98 For: Revocation of Corporate Registration

A

DECISIOn

MHERRYNOLL MONTESSORI SCHOOL, INC.C`MMSI'7, for fraud in procuring its Department ('CED", now Enforcement and Prosecution Department ("EPD">, on 2 certificate of registration September 2008. For consideration is the Petition for Revocation of Corporate Registration of fited by the then Compliance and Enforcement

FActS oF tHe CaSe

January 1999 under SEC Reg. No. A199901353. Its primary purpose is: MMSI is a non-stock corporation registered with the Commission since 28

"To establish and operate an educational institution or learning center which shall provide. courses of study in PRE- ELEM/ELEMENTARY/SECONDARY subject to the IaWs of the Philippines;"

Articles of Incorporation are as follows: The names, nationalities, and addresses of the incorporators listed in its

.MArIA "MHErRY" A. HERNANDEZ NOEL M. HERNANDEZ Damiana t. ambat Filipino Filipino Filipino 235"E. Dela Paz St. Angono, Rizal 235 E. Dela"Paz "St., Angono, Rizai Antipolo, Rizal Circumferential Rd.

1 under Section 6, par. I (1) of Presidentiat Decree 902-A, as amended.

In the Matter of MHERRYNOLL MONTESSORI SCHOOL,INC. SEC Admin Case No. 09-08-98 Page 2 of 6

Maria t. Ambat HERNANDEZ ANNA MARIA RIZZA Filipino Filipino Brgy. Antipolo, Rizal Angono, Rizat Brgy.: San San Pedro Jose

26 January 1999. The By-Laws of MMSI have been duly signed by the same incorporators, on

alleging that to constitute the required minimum number of trustees to obtain a Certificate of Registration with the Commission, spouses MARIA "MHERRY" A. HERNANDEZ and NOEL M. HERNANDEZ wilfully and raudulently declared that: a verified complaint with the EPD, against NOEL and MARIA "MHERRY" HERNANDEZ On 17 January 2008, Rosalinda A. Villamayor, Marion A. Villamayor, et al. filed

a) MARIA "MHERRY" A. HERNANDEZ is a separate and distinct the same person; person from MARIA T. AMBAT, but in fact, they refer to one and

b) DAMIANA T. AMBAT,mother of MARIA A. HERNANDEZ/ the formation in whatever capacity, of MMSI; MARIA T. AMBAT is an incorporator of MMSI, but in fact, DAMIANA T. AMBAT has no knowledge as to her participation in

c) The person whose name appeared in the Articles of is a fictitious person. Incorporation under the name ANNA MARIA RIZZA HERNANDEZ

investigation to determine the truthfulness of the allegations of the complainants. Thus, on 2 September 2008, EPD filed the instant petition. Acting on the verified complaint, EPD formed a team and proceeded with its

ISSUE

based on EPD's Petition and submitted evidence. Whether there is valid ground to revoke MMSI's Certificate of Incorporation

RULING

trustees are the incorporators named in Article v." Section 10 on the number and states: "That the number of trustees of the association shall be five and the first that the number of directors or trustees of all corporations organized under the Code shall not.be less than five (5). Paragraph six of the Articles of Incorporation of MMSI qualifications of incorporators of the Code provides: "Any number of natural persons Section 14 of the Corporation Code of the Philippines? (the "Code") mandates

2 Batas Pambansa Blg.68 Effective May 1, 1980.

In the Matter of MHERRYNOLL MONTESSORI SCHOOL, INC. SEC Admin Case No. 09-08-98 Page 3 of 6

not less than five (5) but not more than fifteen (15), all of tegal age and a majority lawful purpose or purposes. xxxxxx"( emphasis supplied) of whom are residents of the Philippines, may form a private corporation for any

and between the corporation and its stockholders. 4 That is why the contents thereof are mandated by law and treated with strictness. than five natural persons. The articles of incorporation (the "Articles") is the basic contract document in Coporate Law, defining the charter of the corporation.3 It is the contract between the corporation and the state, the stockholders and the state, The law leaves no doubt as to the minimum number of incorporators: not less

requires that it be acknowledged under oath before a Notary. The purpose of this is to secure the State and all concerned against the possibility of any fictitious names being subscribed to the articles, and to furnish proof of the genuineness of the signatures." It must be noted that Section 317 of the Code provides for the liability of the directors/ trustees of the corporation and the incorporators usually act as the first set of directors/ trustees of the corporate entity. Thus, Section 6, par. I (1) of Presidential Decree 902-A as amended, provides: For instance, Section 15 of the Code prescribes the form of the Articies and

the Commission shall possess the following powers: SECTION 6. In order to effectively exercise such jurisdiction,

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I) To suspend, or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations partnerships or associations, upon any of the grounds provided by law, including the following:

1. Fraud in procuring its certificate of registration; (Emphasis supplied)

for the revocation of a certificate of registration of a corporation, partnership or Fraud mentioned in Section 6 par. I (1) of P. D. 902-A as one of the grounds

3 C. L. Villaneuva Philippine Corporate Law 155 (2001). 5 c. L. Villaneuva Philippine Corporate Law 155 (2001) citing Section 14, Corporation Code H.S. De Leon and H. S. De Leon, Jr. The Corporation Code of the Philippines Annotated 165 (2006) 7 "SECTION 31. Liability of directors, trustees or officers Government of the P. I vs. Manifa Railroad 52 Phil. 699. citing 1 Fletcher 506; 18 C.J.S. 440. Pirectors or tr rustees who wilfully an

knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or severally for. all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.. xxx' pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and

In the Matter of MHERRYNOLL MONTESSORI SCHOOL,INC. SEC Admin Case No. 09-08-98 Page 4 of 6

association refers to. fraud attendant in the registration of the corporation, documents or papers presented to the Commission for the registration of the same. partnership or association and the same must be contained or connected with the

of MMSI, all belong to.one person, MARIA "MHERRY" A. HERNANDEZ. Effectively, MARIA AND NOEL HERNANDEZ and DAMIANA T. AMBAT, thus Iacking the required which are listed as different persons in the Articles of Incorporation and the By- iaws the incorporators at the time of registration of MMSI were only three: Spouses documentary evidence submitted, lead to the conclusion that the names MARIA number, five. "MHERRY" A. HERNANDEZ, MARIA T. AMBAT and ANNA MARIA RIZZA HERNANDEZ The facts established by the investigation of the EPD and the pieces of

Interview

MARIA "MHERRY" A. HERNANDEZ, but they were able to interview the Academic Head of MMSI, Mrs. Sinagtala R. Samonte who said she had been with MMSI for seventeen (17) years, since its inception and since then she believed, that MMSI was under the sole proprietorship of MARIA "MHERRY" A. HERNANDEZ. On 11 February 2008, the investigating team who went to MMSI did not find

Conferences

NOEL M. HERNANDEZ appeared, and brought with him a medical certificate attesting that MARIA "MHERRY" A. HERNANDEZ was treated for DMII, HPN, Migraine HA vs Tension HA on 20 February 2008.10 He said he did not know why the other answer the questions relating to the identity of the other incorporators, specifically. the question on whether he knew MARIA "MHERRY" A. HERNANDEZ, ANNA MARIA RIZZA HERNANDEZ AND MARIA T. AMBAT to be one and the same person.1 incorporators were not able to attend the conference. Under oath, he refused to On 21 February 2008, out of the five incorporators who were summoned, only

HERNANDEZ is her husband, DAMIANA T. AMBAT is her mother, MARIA T. AMBAT is an acquaintance, ANNA MARIA RIZZA HERNANDEZ is her husband's relative. by two lawyers. She stated under oath that she personally caused the registration of MMSI in 1999 and identified the five incorporators of MMSI, as follows: NOEL M. On 12 March 2008. MARIA "MHERRY" A. HERNANDEZ appeared accompanied

Certification from the Revenue District Office of Rizal (TIN)

1o' Medical Certificate dated 20 February 2008, Ma. Teresa B. Torres Attending Physician, Angono % In the Matter of Charyn Marketing Enterprise Corporation, SEC Case No. 03-05-49. 9 Petition dated 2 September 2008 pp. 3-4. 12 Id., pp. 5-7. :: Petition dated 2 September 2008 p. 5. Medics Hospital.

In the Matter of MHERRYNOLL MONTESSORI SCHOOL, INC. SEC Admin Case No. 09-08-98 Page 5 of 6

District Office No. 046) issued a Certification, stating that the names of the persons foilowing remarks: 13 listed below were verified with the BIR Integrated Tax Systems Database, with the On 7 March 2008, the Bureau of Internal Revenue ('BIR'? of Rizal (Revenue

Name TIN Remarks

HERNANDEZ MArIA "MHerRY" A. ANNA MARIA RIZZA NOEL M. HERNANDEZ MArIA T. AMBAt HERNANDEZ Damiana t. Ambat 165-839-579-000 208-933-085-000 387-245-657-000 327-118-469-000 386-521-821-000 Local Registered 046 Local Registered 041 Inva{id TIN Invalid TIN Invalid TIN Employee Employee at at RDO RDO

The invalid TINs appearing in the GIS of DAMIANA T. AMBAT, MARIA T. AMBAT and ANNA MARIA RIZZA HERNANDEZ lead to serious doubts as to the authenticity of the data provided by MMSI in its GIS.

Documents Submitted by Compiainants

HERNANDEZ is married to ANNA MARIA RIZZA T. AMBAT. As a result of the marriage, it foilows that the wife now carries the last name, "Hernandez." Thus, "Mherry's" complete name is ANNA MARIA RIZZA A. (for "Ambat," her maiden name) HERNANDEZ, which is the same name which she claimed to be that of her husband's relative, ANNA MARIA RIZZA HERNANDEZ. The marriage contract14 of the subject spouses indicate that NOEL M.

Office of the Civil Registrar General1 dated 14 January 2008 specifies that the name MARIA TOLEDO AMBAT born on April 23, 1967 in Antipolo, Rizai to FRANCISCO L Indices of Marriages. The certification contains the following data: MARIA T. AMBAT show that FRANCISCO AMBAT is the father of both MARIA T AMBAT and ANNA MARIA RIZZA AMBAT. Additionally, a certification issued by the AMBAT and DAMIANA A. TOLEDO yielded one (1) most likeiy match in the Nationai The marriage contract of the subject spouses and the birth certificate15 of

Date of Marriage: September 28, 1988; Piace of Marriage: Cardona Rizal; Name of Bride/Groom: ANNA MARIA RIZZA TOLEDO AMBAT/NOEL MIRANDA HERNANDEZ

14 id., Annex "K." 15 id., Annex "L." 1s id., Annex "M." Id., Annex "I."

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MARIA "MHERRY" A. HERNANDEZ, all the other incorporators are dummies because the Board is only a cause of headaches ("sakit lang daw sa ulo'?. attested that MARIA "MHERRY" told her in 1998 that she made up (`gawa gawa"> the Board of Incorporators of MMSI. That aside from herself and her husband NOEL, Moreover, Rosalinda Villamor, one of the complainants and the sister of in her "Sinumpaang Salaysay" (Affidavit),

to conclude that there was fraud in procuring MMSI's certificate of registration within the contemplation of Section 6 par. I (1) of P. D. 902-A, as amended. The facts discussed above leave no doubt that there was substantial evidence

GrAnted. WHEREFORE, premises considered, the instant petition is hereby The Certificate of Incorporation of MHERRYNOLL MONTESSORI

Monitoring Department be furnished with a copy of this Decision for its appropriate SCHOOL, INC. is hereby REVOKED on the ground provided under Section 6(i)(1) of Presidential Decree 902-A, as amended. Let the Company Registration and action.

SO ORDERED.

Mandaluyong City, 10 June 2010.

Fe B. BariN b+

Chairperson

MA. JuAnIta e. Cueto Commissioner RAUL J. PALABRICA Commissioner

MANUEL HUBERTO B. GAITE EKADICYM. JALA

Commissioner ommissioner

* leave of absence

17 Dated 19 February 2008, /d. Annex "O."