2006 New York Code - Sale Or Sublease Of Goods By Lessee.

 
  Section 2-A-305. Sale or Sublease of Goods by Lessee.
    (1) Subject to the provisions of Section 2-A-303, a buyer or sublessee
  from  the  lessee  of goods under an existing lease contract obtains, to
  the extent of the interest transferred, the leasehold  interest  in  the
  goods  that  the  lessee  had  or  had  power to transfer, and except as
  provided in subsection (2) and Section 2-A-511(4), takes subject to  the
  existing lease contract. A lessee with a voidable leasehold interest has
  power  to  transfer  a good leasehold interest to a good faith buyer for
  value or a good faith sublessee for value, but only to  the  extent  set
  forth  in the preceding sentence. When goods have been delivered under a
  transaction of lease the lessee has that power even though:
         (a) the lessor was deceived as to the identity of the lessee;
         (b) the delivery was in exchange  for  a  check  which  is  later
             dishonored; or
         (c) the   delivery  was  procured  through  fraud  punishable  as
             larcenous under the criminal law.
    (2) A buyer in the ordinary course of business or a sublessee  in  the
  ordinary  course  of business from a lessee who is a merchant dealing in
  goods of that kind to whom  the  goods  were  entrusted  by  the  lessor
  obtains,  to the extent of the interest transferred, all of the lessor's
  and lessee's rights to the goods, and takes free of the  existing  lease
  contract.
    (3)  A buyer or sublessee from the lessee 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.