Legal Definitions - mutuary

A mutuary is an individual or entity that receives fungible property under a specific type of loan agreement known as a mutuum. In a mutuum, the ownership of the property transfers to the recipient (the mutuary), who then has the obligation to return an equivalent amount of the same kind and quality of property, rather than the exact items originally received. Fungible property refers to goods that are interchangeable with other individual units of the same type, such as money, grain, or oil.

• Example 1: Personal Loan of Money

  Sarah needed to pay an unexpected bill and asked her friend, Tom, for a short-term loan of $200. Tom agreed and transferred the money to Sarah. In this scenario, Sarah is the mutuary because she received the $200, and she is obligated to return $200 to Tom, not necessarily the exact same physical currency.

• Example 2: Agricultural Commodity Exchange

  A small organic farm experienced an unexpected pest infestation that destroyed part of its seed corn supply. To ensure they could still plant their full acreage, they borrowed 50 bushels of seed corn from a neighboring farm. The organic farm is the mutuary, as they received the fungible seed corn and are expected to return 50 bushels of equivalent quality seed corn after their harvest, rather than the specific corn they originally received.

• Example 3: Industrial Material Loan

  A manufacturing plant faced a sudden surge in demand for a product but had a temporary shortage of a specific type of industrial-grade plastic pellets. To avoid production delays, they arranged to borrow 10 tons of these pellets from a sister company. The manufacturing plant is the mutuary, as they took possession of the fungible plastic pellets and are responsible for returning 10 tons of the same type and quality of pellets to the sister company once their new shipment arrives.