This obviously doesn’t mean that the original gold coins are literally eaten or melted down and destroyed by the borrower (although that could be the case in a mutuum loan of, say, food)
A personal commitment to return ‘in kind’ is a commitment to return something which doesn’t actually exist as an actual thing: it is just abstractly a ‘thing’ of such and such a kind. Formally, then, the distinction between currency and property in the context of an investment contract is that currency is returned in kind, while property is returned in particular. The former is the basis of a mutuum; the latter is a necessary (but not sufficient) condition for the formation of a licit societas.
If the lender wants $5000 in security to cover the car in case of an accident he should get it as a deposit, a lien on home equity or other property, or as an insurance bond instead of trying to collect it after the fact
A licit societas can and frequently does create have a peek here in-kind investment returns when things go according to plan (“From these [non-mutuum] contracts honest gain may be made.” – Vix Pervenit). But all contractual claims of all parties must terminate in actually existing property, not in claims against persons, in order to avoid usury. That’s why asking the question “what if things don’t go according to plan?” is particularly helpful in distinguishing usurious contracts from non-usurious contracts.
St. Thomas Aquinas refers to objects pledged in kind as objects “consumed in their use”, as distinct from objects pledged in particular. It just means that the original gold coins are no longer in the possession of either the lender or the borrower once the borrower uses them. A mutuum is that kind of agreement: a pledge to return in kind as opposed to in particular.
It is true that the usurer might accidentally receive back some of the very same gold coins (say) that he loaned, as those coins circulate. But that is purely accidental: what the mutuum contract requires is that the borrower personally guarantee return of the principal in kind, not preserve and return actual real rented or co-owned assets in particular.
36) Wait, does this mean that if I lend out my car and the borrower destroys it, he doesn’t owe me anything?
It depends on the particulars of the contract. The guiding principle is that contracts with recourse to real, specified assets (and only those real, specified assets) are licit as profit-producing investments. Full recourse contracts are not licit as profit-producing investments.
First, it should be said that matters of theft, vandalism, fraud, negligence and the like are criminal matters and therefore fall outside of what is intrinsic to the contract itself. (See Question 49).
But accidents do happen, so suppose that one did happen and the car was destroyed. Maybe a meteor struck the car and destroyed it. Lets also suppose that this was a commercial rental for profit: the borrower was contracted to pay for the use of the car, it wasn’t just a friendly loan.
If the borrower posted security and/or the purchase of insurance coverage was part of the contract, the security and/or assets of the insurance company will cover the loss.
However, if the contract says that the borrower owes (say) $5000 if the car is destroyed, and that he is personally on the hook to pay interest on the $5000 if he can’t pay it all at once, then that is usury.
Unsecured contracts for profit are problematic in general when they (explicitly or implicitly) assert recourse to particular persons to recover losses. A licit contract should always cover the various contingencies, fully terminating in real, existent assets which secure the contract, in order to avoid usury.