TIRSO GARCIA v.

LIM CHU SING

Lim Chu Sing is a stockholder in MercantileBank, holding P10,000 worth of

shares.
It appeared that Lim Chu is a guarantor of the trust receipts held by Lim Cuan
Sy.
By virtue of Lim Cuan Sys failure to pay his loans, Bank collected from Lim
Chu
Lim Chu made payments but there was still balance of P9000.
Bank was placed under receivership and so receiver Garcia sought to collect
from Lim Chu.
Bank now is under liquidation.
Lim Chu sought to offset or compensate the 9000 balance with his shares
worth 10000.

ISSUE: Whether offset can continue

HELD: NO

There is no debt between Lim Chu and the Bank.

Stockholders are not creditors of corporation. Their certificates of stock are
not evidence of indebtedness but one of ownership.
Capital stock of a corporation is a trust fund to be used primarily for security
of creditors.
Thus, Lim Chu being merely a stockholder is not Banks creditor. Cannot
offset.