N.Y. Uniform Commercial Code Law § 2-a-304: Subsequent Lease of Goods by Lessor

Section 2-A-304. Subsequent Lease of Goods by Lessor.

(1) Subject to Section 2-A-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 (2) and Section 2-A-527(4), 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:

(a) the lessor's transferor was deceived as to the identity of

the lessor;

(b) the delivery was in exchange for a check which is later

dishonored;

(c) it was agreed that the transaction was to be a "cash sale";

or

(d) the delivery was procured through fraud punishable as

larcenous under the criminal law.

(2) 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 a prior lessee 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 prior

lessee's rights to the goods and takes free of the existing lease

contract.

(3) 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.