810 ILCS 5/2A-304

(810 ILCS 5/2A-304) (from Ch. 26, par. 2A-304)

Sec. 2A-304.

Subsequent lease of goods by lessor.

(1) Subject to Section 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 (2) and Section 2A-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

(c) it was agreed that the transaction was to be a

(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 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) 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.

(Source: P.A. 87-493.)