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In This Volume

  • 6 (1) Nothing in sections 3, 4 and 5 applies, if the money paid, or the property disposed of bears a fair and reasonable relative value to the consideration, to a sale in good faith, to a payment made in the ordinary course of business to innocent persons, to a payment to a creditor, or to a disposition in good faith of property of any kind made in any of the following circumstances:
  • (a) in consideration of a present actual payment in good faith in money;
  • (b) by way of security for a present actual advance of money in good faith;
  • (c) in consideration of a present actual disposition in good faith of any property.
  • (2) In case of a valid sale of property, a payment or transfer of some or all of the consideration by the purchaser to a creditor of the vendor, under circumstances which would render void the payment or transfer by the debtor personally and directly, the payment or transfer, valid as respects the purchaser, is void as respects the creditor to whom it is made.
  • (3) In case a payment has been made which is void under this Act, and valuable security was given up in consideration of the payment, the creditor is entitled to have the security restored or its value made good to the creditor before, or as a condition of, the return of the payment.
  • (4) Nothing in this section prevents a debtor providing for any payment of money to a creditor if the creditor, because of the payment, has lost or been deprived of or has in good faith given up a valid security which the creditor held for the payment of the debt so paid, unless the value of the security is restored to the creditor, or the substitution in good faith of one security for another security for the same debt, so far as the debtor’s estate is not lessened in value to the other creditors.
  • (5) Nothing in this section invalidates a security given to a creditor for an existing debt if, because of the giving of the security, an advance in money is made to the debtor by the creditor in the belief in good faith that the advance will enable the debtor to continue the debtor’s business and to pay the debtor’s debts in full.