§ 72. Diversion of trust funds. 1. Any transaction by which any trust
asset is paid, transferred or applied for any purpose other than a
purpose of the trust as stated in subdivision one or subdivision two of
section seventy-one, before payment or discharge of all trust claims
with respect to the trust, is a diversion of trust assets, whether or
not there are trust claims in existence at the time of the transaction,
and if the diversion occurs by the voluntary act of the trustee or by
his consent such act or consent is a breach of trust.

Nothing in this article affects the rights of a holder in due course
of a negotiable instrument or of a purchaser in good faith for value and
without notice that a transfer to him is a diversion of trust assets.

2. Trust assets shall not be levied upon or subject to a restraining
notice issued pursuant to section fifty-two hundred twenty-two of the
civil practice law and rules as the individual property of the trustee.

3. In any action or proceeding in which it is sought to apply trust
assets for a purpose other than a purpose of the trust as stated in
subdivision one or subdivision two of section seventy-one

(a) it shall be the duty of the trustee, if he is a party, to defend
the trust against such application, and if he knows of the action or
proceeding but is not a party, to make application for intervention
therein for the purpose of defending the trust;

(b) any beneficiary of the trust having a trust claim may intervene in
the action or proceeding to defend the trust against such application.