FOR THE NORTHERN DISTRICT OF CALIFORNIA In re ROLAND A. MIRELES,                                                 No. 1-89-00054      Debtor. ___________________________/ SUMMIT DEVELOPMENT INC.,      Plaintiff,    v.                                                                                  A.P. No. 1-89-0098 ROLAND A. MIRELES,      Defendant. ______________________________/ Memorandum of Decision      Debtor Roland Mireles was an officer of plaintiff Summit Development Inc. During 1986 and 1987, he had sole control of the corporation's bank account. Summit alleges that Mireles drew out $22,000.00 more than he was authorized to draw, and that this amount should be declared a nondischargeable debt pursuant to section 523(a)(4) of the Bankruptcy Code. In addition, Summit alleges that Mireles should be denied his discharge because he failed to schedule his possible right to receive certain funds.
I. Dischargeability
     Mireles had a right to draw $25,000.00 from corporate funds for himself. Summit argues that Mireles actually drew $47,967.99, and that the excess over the authorized amount should be declared nondischargeable as embezzlement or defalcation in a fiduciary capacity. The argument fails on both factual and legal grounds.      Factually, Summit has not established that Mireles' personal draws totalled anything near the $47,000.00 claimed. Summit reached this total by adding Mireles' admitted draws of about $27,000.00 to items which were claimed to be personal but were ascribed by Mireles to corporate business. Of these disputed matters, many were clearly legitimate corporate expenses and others were at least arguably corporate expenses. For the reasons stated below, the court does not need to determine the legitimacy of each item.      All of the checks Mireles wrote were marked in detail on their face to describe their purpose. Mireles made no attempt to hide the checks from the other two principals of the corporation, one of whom kept the corporate books. In fact, checks for at least $5,000.00 in alleged overdraws were prepared by one of the other principals, who was Summit's main witness. These checks were prepared and given to Mireles at the end of the period during which Summit alleges Mireles overdrew. The principal, herself a lawyer, had full access to the books and records and could have easily audited Mireles' accounts.      Because everything Mireles did was above board and at least arguably proper, there is no evidence of theft or embezzlement. The only remaining issue is whether Mireles is liable for defalcation in a fiduciary capacity for overdrawing his account. The court determines that there is no such liability, because there was no trust.      The mere existence of a fiduciary relationship under state corporate law does not render every debt owed by an officer to his corporation nondischargeable. In re Hultquist (9th Cir.BAP 1989) 101 B.R. 180, 185. There must be an express trust, created by agreement or statute. In re Short (9th Cir.1987) 818 F.2d 693. As to partnerships, there is a specific California statute which makes partners trustees for all partnership funds. See Ragsdale v. Haller (9th Cir.1986) 780 F.2d 794, 796. However, there is no analogous statute creating a trust for corporate funds. Under California law, the relationship between a principal and his corporation is one of agency, not trust. Bainbridge v. Stoner (1940) 16 Cal.2d 423, 428. Accordingly, a corporate officer is not liable to his corporation for defalcation in a fiduciary capacity merely for drawing out funds in excess of his contractual rights.
II. Denial of Discharge
     The evidence before the court established that Mireles excluded from his schedules potential contractual rights and the existence of his claim to a share of $55,000.00 held in escrow, although the litigation over the latter was disclosed in his statement of affairs. However, it appears that the omissions were due to the neglect and erroneous advice of counsel and were not made with the intent to defraud. The court cannot infer fraudulent intent from the circumstances, as the omitted matters were clearly within the knowledge of creditors, making intentional omission pointless. Moreover, there was no evidence that the omitted claims actually had any significant value.
III. Conclusion
     There is neither a legal nor a factual basis for declaring Mireles' debt to Summit nondischargeable. The facts surrounding the omission of certain assets from the schedules do not support a finding of fraudulent intent. Accordingly, Summit will take nothing by its complaint and this adversary proceeding shall be dismissed, with prejudice. Each side shall bear its own costs.      Counsel for Mireles shall submit an appropriate form of judgment forthwith. This memorandum constitutes findings and conclusions pursuant to FRCP 52(a) and Bankruptcy Rule 7052.
Dated: November 17, 1989                                                                                _______________________                                                                                                                            Alan Jaroslovsky                                                                                                                            U.S. Bankruptcy