Sec. 42a-2A-404. Subsequent lease of goods by lessor.
Sec. 42a-2A-404. Subsequent lease of goods by lessor. (a) Subject to section 42a-2A-403, 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 that the
lessor had or had power to transfer and, except as otherwise provided in subsection (b)
of this section and subsection (d) of section 42a-2A-720, takes subject to the existing
lease contract.
(b) A lessor with voidable rights or voidable title acquired in a purchase of goods
from a transferor has power to transfer a good leasehold interest to a good faith subsequent lessee for value. Under this subsection, voidable rights or voidable title is acquired
when the goods have been delivered under a transaction of purchase even if:
(1) The transferor was deceived as to the identity of the lessor;
(2) The delivery was in exchange for a check later dishonored;
(3) It was agreed that the transaction was to be a cash sale; or
(4) The delivery was procured through fraud punishable under criminal law.
(c) A subsequent lessee in the ordinary course of business from a lessor that is a
merchant dealing in goods of that kind to which the goods were entrusted by the existing
lessee of such lessor before the interest of the subsequent lessee became enforceable
against such lessor obtains, to the extent of the leasehold interest transferred, all rights
to the goods of such lessor and the existing lessee, and takes free of the existing lease
contract.
(d) 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.
(P.A. 02-131, S. 31.)