Priority of holders and purchasers of money, instruments, securities, documents of title or chattel paper
31(1)A holder of money has priority over a security interest in it perfected by registration under section 25 or temporarily perfected under subsection 28(4) if the holder
(a)
acquired the money without knowledge that it is subject to a security interest, or
(b)
is a holder for value, whether or not that person acquired the money without knowledge that it is subject to a security interest.
31(2)A creditor who receives an instrument drawn or made by a debtor and delivered in payment of a debt owing to the creditor by that debtor has priority over a security interest in the instrument whether or not the creditor has knowledge of the security interest in the instrument at the time of delivery.
31(3)A purchaser of an instrument or a security has priority over a security interest in the instrument or security perfected by registration under section 25 or temporarily perfected under subsection 26(1) or 28(4) if the purchaser
(a)
gave value for the instrument or security,
(b)
acquired the instrument or security without knowledge that it is subject to a security interest, and
(c)
took possession of the instrument or security.
31(4)A holder to whom a negotiable document of title is negotiated has priority over a security interest in the document of title that is perfected by registration under section 25 or temporarily perfected under subsection 26(2) or 28(4) if the holder
(a)
gave value for the document of title, and
(b)
acquired the document of title without knowledge that it is subject to a security interest.
31(5)For the purposes of subsections (3) and (4), a purchaser of an instrument or a security or a holder of a negotiable document of title who acquires it under a transaction entered into in the ordinary course of the transferor’s business has knowledge only if the purchaser acquires the interest with knowledge that the transaction violates the terms of the security agreement creating or providing for the security interest.
31(6)A purchaser of chattel paper who takes possession of it in the purchaser’s ordinary course of business and for new value has priority over any security interest in the chattel paper that
(a)
was perfected by registration under section 25, if the purchaser does not have knowledge at the time of taking possession that the chattel paper is subject to a security interest, or
(b)
has attached to proceeds of inventory under section 28, whatever the extent of the purchaser’s knowledge.