§490:2A-304  Subsequent lease of goods by
lessor.  (a)  Subject to section 490:2A-303, a subsequent lessee from a
lessor of goods under an existing lease contract obtains, to the extent of the
leasehold interest transferred, the leasehold interest in the goods that the
lessor had or had power to transfer, and except as provided in subsection (b)
and section 490:2A-527(d), takes subject to the existing lease contract.  A
lessor with voidable title has power to transfer a good leasehold interest to a
good faith subsequent lessee for value, but only to the extent set forth in the
preceding sentence.  If goods have been delivered under a transaction of
purchase, the lessor has that power even though:



(1)  The lessor's transferor was deceived as to the
identity of the lessor;



(2)  The delivery was in exchange for a check which is
later dishonored;



(3)  It was agreed that the transaction was to be a
"cash sale"; or



(4)  The delivery was procured through fraud
punishable as larcenous under the criminal law.



(b)  A subsequent lessee in the ordinary course
of business from a lessor who is a merchant dealing in goods of that kind to
whom the goods were entrusted by the existing lessee of that lessor before the
interest of the subsequent lessee became enforceable against that lessor
obtains, to the extent of the leasehold interest transferred, all of that
lessor's and the existing lessee's rights to the goods, and takes free of the
existing lease contract.



(c)  A subsequent lessee from the lessor of
goods that are subject to an existing lease contract and are covered by a
certificate of title issued under a statute of this State or of another
jurisdiction takes no greater rights than those provided both by this section
and by the certificate of title statute. [L 1991, c 40, pt of §1]