Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

Attempts to Legally Justify Fractional-Reserve Banking 127judges being often more influenced by the specific details ofeach case and by ostensible business activity than by the dispassionate,logical, and exegetic analysis which should be carriedout based on essential legal principles. In short the Anglo-Saxon legal system depends excessively on precedents, whilethe continental system, based on Roman law, rests on precedents,sound doctrine, and juridical theory.THE DOCTRINE OF SPANISH CIVIL AND COMMERCIAL CODESA group of Spanish theorists has also tried to equate themonetary irregular-deposit contract and the loan contract. Citingseveral articles in the Spanish Civil and Commercial Codes,they claim the irregular deposit is not recognized as a separateconcept in Spanish legislation and therefore is no more than asimple loan or mutuum contract. Nevertheless, not even Spanishpositive law guarantees the association between the irregulardeposit contract and the loan contract. On the contrary, sucha connection is very doubtful and uncertain, and in fact, themajority of modern Spanish theorists have concluded, in keepingwith the classical construction, that even from the standpointof current Spanish positive law, the loan contract is onething and the irregular deposit contract quite another.To justify equating the two types of contracts, theoristshave frequently referred to Article 1768 of the Spanish CivilCode. This article states thatwhen the depositary has permission to use the gooddeposited, the contract ceases to be a deposit and becomes aloan or commodatum. Permission is not assumed, but mustbe proven.According to this article, if we were to understand use in itsmost general and lax sense, then as all irregular deposit contractsimply a transfer of ownership of the individual itemsdeposited and hence of the indistinct “use” of the fungiblegood, the irregular deposit contract would always ipso factobecome a loan or mutuum. Although later we will examine thedifferent instances in which it could be considered that a “transferof use” takes place, for now it is enough to remember that,as we saw in chapter 1, a general transfer of ownership and use