<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-2A-304 - Subsequent lease of goods by lessor. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2073315Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073315SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073315CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2073315Normal-000000 { margin-left: 4.50in; text-indent: -4.00in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073315DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2073315Normal-000001 { margin-left: 1.14in; text-indent: -0.44in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } p.s2073315Normal-000002 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073315000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073315SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073315SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2073315Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-304"><span class="s2073315SENU">57A-2A-304</span></a><span xml:space="preserve" class="s2073315SENU">. </span><span class="s2073315CL">Subsequent lease of goods by lessor.</span></p><p dir="ltr" class="s2073315Normal-000000"><span xml:space="preserve" class="s2073315DefaultParagraphFont">(1)    Subject to the provisions of § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-303"><span class="s2073315DefaultParagraphFont">57A-2A-303</span></a><span class="s2073315DefaultParagraphFont">, 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 § 57A-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. When goods have been delivered under a transaction of purchase the lessor has that power even though:</span></p><p dir="ltr" class="s2073315Normal-000001"><span class="s2073315DefaultParagraphFont">(a)    The lessor's transferor was deceived as to the identity of the lessor;</span></p><p dir="ltr" class="s2073315Normal-000001"><span class="s2073315DefaultParagraphFont">(b)    The delivery was in exchange for a check which is later dishonored;</span></p><p dir="ltr" class="s2073315Normal-000001"><span class="s2073315DefaultParagraphFont">(c)    It was agreed that the transaction was to be a "cash sale"; or</span></p><p dir="ltr" class="s2073315Normal-000001"><span class="s2073315DefaultParagraphFont">(d)    The delivery was procured through fraud punishable as larcenous under the criminal law.</span></p><p dir="ltr" class="s2073315Normal-000002"><span class="s2073315DefaultParagraphFont">(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.</span></p><p dir="ltr" class="s2073315Normal-000002"><span class="s2073315DefaultParagraphFont">(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.</span></p><p dir="ltr" class="s2073315Normal"><span xml:space="preserve" class="s2073315000003"> </span></p><p dir="ltr" class="s2073315Normal"><span class="s2073315SCL">Source:</span><span xml:space="preserve" class="s2073315SCL-000004"> SL 1989, ch 419, § 1; SL 1990, ch 390, § 9.</span></p></div></body></html>