§ 79-a. Misappropriation of funds of trust.
1.Any trustee of a trust\narising under this article, and any officer, director or agent of such\ntrustee, who applies or consents to the application of trust funds\nreceived by the trustee as money or an instrument for the payment of\nmoney for any purpose other than the trust purposes of that trust, as\ndefined in section seventy-one, is guilty of larceny and punishable as\nprovided in the penal law if\n (a) such funds were received by the trustee as owner, as the term\n"owner" is used in article three-a of this chapter, and they were so\napplied prior to the payment of all trust claims as defined in such\narticle three-a, arising at any time; or\n (b) such funds were received by the trustee as contractor or\nsubcontractor, as such terms a
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§ 79-a. Misappropriation of funds of trust. 1. Any trustee of a trust\narising under this article, and any officer, director or agent of such\ntrustee, who applies or consents to the application of trust funds\nreceived by the trustee as money or an instrument for the payment of\nmoney for any purpose other than the trust purposes of that trust, as\ndefined in section seventy-one, is guilty of larceny and punishable as\nprovided in the penal law if\n (a) such funds were received by the trustee as owner, as the term\n"owner" is used in article three-a of this chapter, and they were so\napplied prior to the payment of all trust claims as defined in such\narticle three-a, arising at any time; or\n (b) such funds were received by the trustee as contractor or\nsubcontractor, as such terms are used in article three-a of this\nchapter, and the trustee fails to pay, within thirty-one days of the\ntime it is due, any trust claim arising at any time; provided, however,\nthat if the trustee who received such funds as contractor or\nsub-contractor disputes in good faith the existence, validity or amount\nof a trust claim or disputes that it is due, the application of trust\nfunds for a purpose other than a trust purpose, or the consent to such\napplication, shall not be deemed larceny by reason of failure to pay the\ndisputed claim within thirty-one days of the date when it is due if the\ntrustee pays such claim within thirty-one days after the final\ndetermination of such dispute.\n 2. Notwithstanding subdivision one of this section, if the application\nof trust funds for a purpose other than the trust purposes of the trust\nis a repayment to another person of advances made by such other person\nto the trustee or on his behalf as trustee and the advances so repaid\nwere actually applied for the purposes of the trust as stated in section\nseventy-one, or if the trustee has made advances of his personal funds\nfor trust purposes and the amount of trust funds applied for a purpose\nother than the trust purposes of the trust does not exceed the amount of\nadvances of personal funds of the trustee actually applied for the\npurposes of the trust, such application or consent thereto shall be\ndeemed justifiable and the trustee, or officer, director or agent of the\ntrustee, shall not be deemed guilty of larceny by reason of such\napplication or by reason of his consent thereto.\n 3. Failure of the trustee to keep the books or records required by\nsection seventy-five shall be presumptive evidence that the trustee has\napplied or consented to the application of trust funds received by him\nas money or an instrument for the payment of money for purposes other\nthan a purpose of the trust as stated in section seventy-one.\n 4. Notwithstanding any other provision of law, no act of the trustee\nin relation to the assets of the trust shall, by reason of any express\ncovenant as provided in section thirteen or section twenty-five of this\nchapter, be deemed larceny in a case in which it is not declared by\nsubdivision one of this section to be larceny or in a case in which the\nact is deemed justifiable as provided in subdivision two of this\nsection.\n