Employee security deposits were held not to be trust money, leaving depositors without priority in insolvency.

Employee security deposits made to an employer for due performance of duties did not create a trust, because there was no defined trust object and no obligation on the employer to administer the funds as trustee. The relationship was held to be debtor and creditor, not beneficiary and trustee. The deposited amount therefore was not trust money in insolvency and the depositors were not entitled to priority over general creditors.

---

---

Issues: Whether the amount deposited by employees with their employer as security for due performance of duties constituted trust money and whether the employer held it as trustee so as to give the depositors priority over the creditors in insolvency.

Analysis: The deposits were made merely as security for good conduct in service. There was no defined object of trust and no obligation on the employer to carry out any trust in respect of the amount. The relationship created was that of debtor and creditor, not beneficiary and trustee. On that footing, the amount could not be treated as trust money in the insolvency proceedings.

Conclusion: The claim to treat the sum as trust money failed, and the petitioners were not entitled to priority over the general creditors.

---