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Security

person, money, creditor and banker

SECURITY. That which is given to secure the repayment of money lent. Where a person borrows money from his banker, he supplies security, most commonly certifi cates of shares with a transfer into the names of the banker's nominees, or the title deeds of a property with either a memoran dum of deposit or a legal mortgage, or bearer bonds or other negotiable instruments, or a life policy assigned to the banker, or a guar antee by some reliable person. The value of the security should always be greater than the amount of money lent. (See ADVANCES.) The security given may belong either to the debtor himself or to some other person. When it belongs to another person it is usually called " collateral security " (q .v.).

Where several securities, deposited by different persons, are held for one account, and one of the depositors dies, the account should be broken and an arrangement made with the debtor to pass all future trans actions through a new account until fresh arrangements are made.

If security is taken from a customer to cover an advance already granted, and the customer shortly afterwards fails, the security may be objected to on the ground of fraudulent preference. By Section 4S of the Bankruptcy Act, 18S3 : " (1) Every conveyance or transfer of property, or charge thereon made, every payment made, every obliga tion incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor, or any person in trust for credi tor, with a view of giving such creditor a preference over the other creditors shall, if the person making, taking, paying, or suffering the same is adjudged bankrupt on a bank ruptcy petition presented within three months after the date of mak ing, taking, paying or suffering the same, be deemed fraudulent and void as against the trustee in the bankruptcy.

" (2) This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the bankrupt." Another ground on which a security may be objected to is where " undue influence " may have been exercised, as might occur in the case of a father, or mother, unduly pressing a son, or daughter, who has just come of age and succeeded to an estate, to give security to a banker for the father's, or mother's, overdraft.

Information regarding the various forms of securities, and the charges, etc., will be found under the respective headings. (See