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

The Legal Nature of the Monetary Irregular-Deposit Contract 11COURT DECISIONS ACKNOWLEDGING THE FUNDAMENTAL LEGALPRINCIPLES WHICH GOVERN THE MONETARY IRREGULAR-DEPOSITCONTRACT (100-PERCENT RESERVE REQUIREMENT)As late as the twentieth century, court decisions in Europehave upheld the demand for a 100-percent reserve requirement,the embodiment of the essential element of custody andsafekeeping in the monetary irregular deposit. On June 12,1927, the Court of Paris convicted a banker for the crime ofmisappropriation for having used, as was the common practicein banking, funds deposited with him by a client. On January4, 1934, another ruling of the same court maintained the sameposition. 11 In addition, when the Bank of Barcelona failed inmoment it is required (p. 421). The same authors contend that there existsan unacceptable legal loophole in Spanish criminal law, compared toother legal systems containingspecific provisions for corporate crimes and breach of trust,under which it would be possible to include the unlawfulbehaviors of banks with respect to the irregular deposit ofchecking accounts. (p. 429)In Spanish criminal law, the article governing misappropriation is article252 (mentioned by Antonio Ferrer Sama) of the new 1996 Penal Code(article 528 of the former), which states:The penalties specified in article 249 or 250 will be applied toanyone who, to the detriment of another, appropriates orembezzles money, goods, securities or any other movableproperty or patrimonial asset which he has received ondeposit, on consignment or in trust, or by way of anotherclaim carrying the obligation to deliver or return the property,or who denies having received it, when the amount appropriatedexceeds 300 euros. These penalties will be increasedby 50 percent in the case of a necessary deposit.Finally, the most thorough work on the criminal aspects of the misappropriationof money, which covers in extenso the position of ProfessorsFerrer Sama, Bajo Fernández, and others, is by Norberto J. de la MataBarranco, Tutela penal de la propiedad y delitos de apropiación: el dinero comoobjeto material de los delitos de hurto y apropiación indebida (Barcelona: Promocionesy Publicaciones Universitarias [PPU, Inc.], 1994), esp. pp.407–08 and 512.11 These judicial rulings appear in Jean Escarra’s Principes de droit commercial,p. 256; Garrigues also refers to them in Contratos bancarios, pp.367–68.