Chapter I — The definition of loan, and its properties

I. QUESTION I. What is a loan? ANSWER. It is the delivery of a consumable thing into the use of consumption, and the dominion thereof, that after some time has elapsed just as much be restored. The matter subject to loan is by its own nature consumable, and delivered into the use of consumption. These two things are necessary to a loan. If coins were delivered not for consumption but for display and pomp, it would be a loan for use; if for custody, a deposit, not a loan. Since to the nature and essence of a loan it is required that the thing lent be consumable and delivered for consumption: although money be not consumed materially, it is nevertheless consumed formally while it is put away: for the same in number is not restored to the lord, just as neither the same wheat, nor the same wine, and so forth. But in a loan for use the same thing in number is restored. The consumption of things is twofold. One natural, by which the thing itself perishes, as wine, corn, oil, and the like. The other civil, in which the thing is alienated, as money, which while it passes into another's dominion perishes to its own lord, and becomes another's. The last particle, that after some time has elapsed just as much be restored, signifies that some time ought to flow between the delivery and the restitution. For he who lends spontaneously imposes upon himself the obligation of demanding back the thing delivered, not at once, but after some time. If a point of time be prescribed, when it has elapsed restitution ought to be made, otherwise the debtor will be tardy. And if no day be appointed, the circumstances of the giver and the receiver being regarded, restitution ought to be demanded. For a certain rule cannot be prescribed. The thing to be restored ought to be of the same value as the thing received, and of the same species: as wine for wine, money for money. In this restitution, nevertheless, not so much the physical species is attended to, unless it were agreed upon, as the formal value. A thing lent increases and decreases to the borrower. Wherefore if the value of money be increased or diminished, it turns to the advantage or loss of the borrower. Things which theologians call consumable the jurists call fungible, that is, those which in their own kind admit of function, that is, consumption. The definition explained all Catholics approve, diversity of words being removed.

II. The chief property of a loan, which necessarily follows from its nature, is the transfer of dominion. For if things subject to loan are consumed by use, and by force of the loan are given for consumption, it follows that he who gives things on loan confers also the right of consuming, putting away, and alienating them. Money alone is consumed by alienation; other fungible things lent perish by consumption. He who receives moneys on loan buys wares with them: the seller of the wares becomes absolute lord of the moneys. Whence does he acquire that dominion? Assuredly from the borrower. He therefore was lord of the moneys, because no one can transfer more right to another than he himself has.

III. The heretics Salmasius and other patrons of usuries confess that the dominion of the bodies, but not of the quantity, is transferred in a loan. Those who are wont to deride the little distinctions of the casuists do not blush to produce this witty fiction. Everyone would most gladly receive the bodies of gold pieces, the quantity being left to Salmasius. Bodies are so bound up with quantity that they cannot subsist without it. Therefore while the bodies are alienated, the quantity is alienated, which cannot be separated from the bodies. The lender therefore loses the dominion of the thing lent, but retains the right of demanding back just as much. This right the patrons of usuries too grossly confound with dominion, since they are two things altogether distinct. Since indeed dominion is a right in the thing, and the faculty of using it at the lord's discretion. Of this dominion of the thing lent the lender is destitute; but he retains a right or action of demanding back just as much, and this right or action he can sell, bequeath, and give. All these things are clear.

IV. Hence a loan differs from a sale, in which a price is paid for a ware; from exchange, in which one thing is delivered for another; from donation, in which no right of demanding anything back is retained; from letting, in which a price is paid for the use of a thing; from a loan for use, in which dominion is not transferred but only use, and the same thing in number is to be restored; from a deposit, in which a thing is consigned to be kept; from a pledge, which is given for the sake of security, without transfer of dominion, with the burden of restoring altogether the same thing.