MEMORANDUM OPINION
This matter came before the Court on May 23, 1985 in a hearing to determine the dischargeability of a debt owed by Kenneth Wayne Myers and Marjorie Elizabeth Myers to the Commonwealth of Virginia. The plaintiff bases the challenge to dis-chargeability on § 523(a)(4) of the Bankruptcy Code, which renders nondischargeable debts incurred by fraud or defalcation while in a fiduciary capacity, embezzlement, or larceny. The Court took the matter under advisement and requested the parties to file briefs on the issues. The briefs having been filed, and having reviewed the record and arguments of counsel, the Court makes the following findings of fact and conclusions of law.
FINDINGS OF FACT
The debtors herein, Kenneth Wayne Myers and Marjorie Elizabeth Myers, husband and wife, operated together a business in King George County, Virginia, known as “K & M Sporting Goods.” The Myers applied to the Division of Game and Inland Fisheries of the Commonwealth of Virginia in order to be an agent for the sale of hunting and fishing licenses at their place of business. The application was approved on June 14,1983. The debtors were to sell the licenses and remit the proceeds, less commissions, back to the Commonwealth. Under Virginia Code § 29-69, the debtors were allowed a twenty-five cent commission for every license sold.
An audit by the Commonwealth showed that the Myers failed to remit license sales proceeds from the 1983 and 1984 hunting and fishing seasons in the total amount of $9,823.75. The Commission of Game and Inland Fisheries made several requests to the debtors that they remit the funds due the Commonwealth, however, the Myers were unable to do so. As the facts developed at the hearing, it became apparent that the Myers’ business took a downswing and the money received from the license sales was applied toward business expenses and the purchase of additional inventory. The fees due the Commonwealth were not segregated or kept in a separate account, but were combined with other revenues from which the general business debts were paid. Once it became clear the Myers could not meet théir obligations, the Commonwealth brought suit in the Circuit Court of King George County and obtained a default judgment against the debtors on August 30, 1984.
The debtors filed a Chapter 7 petition with this Court, and listed the plaintiff in this suit as a creditor therein. Accordingly, the plaintiff seeks a determination as to the dischargeability of the $9,825.75 due the Commonwealth of Virginia. The Commonwealth argues two separate grounds for nondischargeability; first, a breach of fiduciary duty, 1 and second, embezzlement. *904 Both grounds are contained in Bankruptcy Code § 523(a)(4).
CONCLUSIONS OF LAW
I. Defalcation in Fiduciary Duty.
The Code provides that “a discharge ... does not discharge an individual debtor from any debt ... (4) for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny ...” 11 U.S.C. § 523(a)(4). Addressing the defalcation argument first, there must be a showing that the debtors in this case stood in a fiduciary relationship with the Commonwealth.
As the plaintiff in this case has argued, the bankruptcy courts have developed a narrow interpretation of what constitutes a fiduciary relationship under the Bankruptcy Code. In
Matter of Angelle,
A recent case applying these established rules to the situation at hand is
American Insurance Co. v. Lucas,
The facts in Lucas state that the debtors commingled funds from the license sales with other income from the store, and the funds were applied to the general operating expenses of the store as a whole. In time, the debtors were unable to meet their obligations. The district court held in an order affirming the bankruptcy court that absent an express statutory intent to create a trust relationship, there was no fiduciary relationship between the Commonwealth and the debtors. Moreover, “in the *905 absence of such express legislative action, these debts cannot be held nondischargeable.” Id. at 926.
The plaintiff here, as did the plaintiff in Lucas, argues that the statute empowering the state to appoint agents for the sale of licenses implies the necessary trust relationship. Yet, without an express intent in the statute no express trust can exist. The enabling statutes, in §§ 29-65 to 29-73 of the Virginia Code, outline the various duties, responsibilities, and penalties pertaining to the issuing agents. However, there is no intent in the statutes which, on their face, would create a fiduciary relationship between the debtor and the Commonwealth. For dischargeability purposes, the statutory scheme created no more than an agency relationship.
The plaintiff has also argued that the existence of a criminal statute applicable to a public officer misappropriating funds creates an express trust for § 523(a)(4) purposes.
3
The plaintiff cites
In re Loken,
On the basis of. these considerations, this Court is of the opinion that no fiduciary relationship existed between the Commonwealth and the debtors which would warrant nondischargeability' under § 523(a)(4) as a defalcation in fiduciary duty.
II. Embezzlement.
11 U.S.C. § 523(a)(4) does not require the existence of a fiduciary relationship in order to establish that a debt created by an act of embezzlement is non-dischargeable.
In re Rigsby,
Even where a case might imply some form of trust by virtue of a debtor holding funds for another, the debtor’s subsequent appropriation of the funds will not amount to an embezzlement absent proof of the debtors’ fraudulent intent.
Matter of Storms,
*906
This Court in
In re Rigsby,
Rigsby
based its decision in part upon
In re Williams,
In addition, there was no restriction on the Myers as to the use of the funds. Mrs. Myers testified that the license proceeds went straight into the cash register, and vendors were paid cash as they came into the store. It appears from the evidence that as long as the Commonwealth received a check from the debtors covering the amount due, it made no difference as to the manner in which the funds were maintained. A similar conclusion was arrived at in the
Storms
decision.
Storms,
In Storms, an insurance agent received premiums from policies sold, and he was required to pay the balance, less commissions, to his insurance company. The court pointed out that the debtor routinely and openly commingled premiums with the funds of other business and operated from a single bank account. Upon the debtor’s default, the court rejected the argument that a § 523(a)(4) embezzlement took place stating, “as insurance premiums came into Storms’ hands, he was not required to isolate or account for them, nor was there any restriction on his use of them. Great American’s only apparent concern with respect to premiums was that Storm’s account be paid by November 15.” Id. at 765.
This Court finds that there is no substantive difference between the insurance premiums received by the debtor in Storms and the license proceeds received by the Myers in the present case. In one instance the money is given in exchange for an insurance contract issued by the company, in the other, the money is given for a license issued by the Commonwealth. In both eases, however, the debtors received money that was to be remitted to another party once the debtors’ sales commissions were deducted. In the present case, the *907 deprived party happens to be the Commonwealth of Virginia and not the Great American Insurance Company.
Regardless of what the understanding may have been between the parties as to the treatment of the funds, the actions of the debtors and the Commonwealth refute any assertion that there was an embezzlement. The Myers’ unfettered use of the funds in their possession indicates a lack of an entrustment agreement or a fraudulent appropriation. The facts and the
Rigsby
and
Storms
decisions show that the Myers were lawfully entitled to use the funds, and their duty to pay the Commonwealth was based solely upon their obligations as a debtor. One cannot embezzle one’s own property.
In re Schultz,
Notes
. The plaintiff asserted that this Court should be bound by the issues determined in the state court proceeding, and that the debtor in this case is barred by the doctrine of collateral es-
*904
toppel from denying there was a breach of fiduciary duty. However, the doctrine of collateral estoppel only precludes relitigation of issues actually and necessarily decided, and it is well established that a state court default judgment does not have collateral estoppel effect because it is not the result of actual litigation.
In re Anderson,
Moreover, a state court may determine the defendants' liability on a debt, but the federal courts will determine its dischargeability under the bankruptcy laws. A federal bankruptcy court has the authority and the right to inquire into the character, and, ultimately, the dis-chargeability of the debt notwithstanding the state court determination.
Carey Lumber Co. v. Bell,
. In
Matter of Angelle,
the court specifically referred to § 17(a)(4) of the Bankruptcy Act of 1898, which was repealed by the Bankruptcy Code of 1978. Section 17(a)(4) was replaced by 11 U.S.C. § 523(a)(4).
Matter of Rausch,
. Va. Code Ann. § 18.2-112 (Repl.Vol.1975) provides as follows:
If any officer, agent or employee of the State or of any city, town, county, or any other political subdivision, or the deputy of any such officer having custody of public funds knowingly misuse or misappropriate the same or knowingly dispose thereof otherwise than in accordance with law, he shall be guilty of a Class 4 felony; and any default of such officer, agent, employee or deputy in paying over any such funds to the proper authorities when required by law to do so shall be deemed prima facie evidence of his guilt.
. At trial, Mrs. Myers testified that she thought the funds derived from the license sales belonged to the Commonwealth; however, her thoughts on the matter are not dispositive. Consistent with this Court’s ruling in
Rigsby,
the actions of the parties speak louder than their words.
Rigsby,