1. (1) Subject to Section 12A-2A-303 of this title, 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) of this section and subsection (4) of Section 12A-2A-527 of this title, 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. (a) the lessor's transferor was deceived as to the identity of the lessor;
   2. (b) the delivery was in exchange for a check which is later dishonored;
   3. (c) it was agreed that the transaction was to be a "cash sale"; or
   4. (d) the delivery was procured through fraud punishable as larcenous under the criminal law.
2. (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 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.

3. (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.

   Oklahoma Code Comment

   Both this section and § 2A-305 complement the policies expressed in the sales area in 12A Oklahoma Statutes § 2-403. As the Official Comment to § 2-403 notes, rights acquired under the law of agency outside the UCC, or under principles of apparent ownership or other estoppel, continue unimpaired by §2-403, and thus also by this section. Accordingly, the decision in Young v. Cole, 216 P. 429 (Okla.1923), that if the owner of personal property delivers possession of it as well as a bill of sale to a bailee the bailee is clothed with apparent ownership and may pass title to the property, remains good law.

   The 1991 amendments make no substantive change here.

Laws 1988, HB 1683, c. 86, § 34, eff. November 1, 1988; Amended by Laws 1991, SB 25, c. 117, § 7, eff. January 1, 1992.