Legal Definitions - ex mutuo

Ex mutuo is a Latin legal phrase that translates to "from or out of a loan."

In historical legal contexts, this term referred to a debt or obligation that arose specifically when one person lent another something that could be measured by number, weight, or volume. The key characteristic was that the item lent was not unique, and the borrower was expected to return an equivalent quantity or value, rather than the exact same physical item. This concept primarily applied to fungible goods, meaning items that are interchangeable, such as money, grain, or other commodities.

Here are some examples illustrating the concept of ex mutuo:

• Monetary Loan: Imagine a scenario where a small business owner lends a colleague $1,000 to cover an unexpected expense, with the agreement that the colleague will repay the full amount in two months.

  This is an ex mutuo debt because the obligation to repay the $1,000 arises directly from the loan of money. The business owner does not expect the *exact same* dollar bills back, but rather the equivalent value, which is a fungible item measured by number.

• Agricultural Commodity Loan: Consider a farmer who, facing a temporary shortage, borrows 20 sacks of feed grain from a neighboring farm, promising to return 20 sacks of the same type of grain after their own harvest comes in.

  This situation exemplifies ex mutuo because the debt to return the feed grain originates from the loan of a commodity. The specific sacks of grain are not unique; the farmer is obligated to return an equivalent quantity (20 sacks) measured by number and weight, not the identical items originally borrowed.

• Construction Material Loan: A landscaping company, unexpectedly short on a particular type of topsoil for a project, borrows 3 cubic yards of topsoil from a larger supplier, agreeing to replace the borrowed quantity once their next bulk delivery arrives.

  This is an ex mutuo arrangement. The debt to replace the topsoil arises from the loan of a material that is measured by volume (cubic yards) and is fungible. The landscaping company is not expected to return the *exact* soil particles, but an equivalent quantity of the same type.