(1)  Subject to section 40 (3) (d) (iii) and to section 40 (3) (e) (ii) , except in the case of fraud, a person contracting or dealing with, or taking, or proposing to take a transfer from, the registered proprietor of any registered estate or interest shall not be required to inquire or ascertain the circumstances in or the consideration for which the registered proprietor or any previous registered proprietor of the estate or interest in question is or was registered, or to see to the application of the purchase-money, or of any part of that money, or shall not be affected by notice direct or constructive of any trust or unregistered interest.

(2)  The knowledge that any trust or unregistered interest is in existence shall not of itself be imputed as fraud.