Loan. In its general acceptation, this word signifies the agreement by which the use of anything is given, under condition of its being returned to the owner. But as some articles, as provisions, must be destroyed in their use, or given away, as money, a distinction was made in the Roman law between mutuum and commodate; the former term being applied to the loan of fungibles, or such articles as perish in the use; the latter to the loan of those subjects which must be individually returned to the owner, and which subjects must therefore be of a nature capable of being used without destruction or alienation. In mutuum, the property of the subject is transferred; and if the subject be destroyed, the borrower to whom the property is transferred suffers the loss; but in commodate, as the property remains with the lender, and the use merely is given to the borrower, any loss befalling the subject must be borne by the lender.

Definition source
Bell, William, A Dictionary and Digest of the Law of Scotland, 7th ed. rev. George Ross (Edinburgh: Bell & Bradfute, 1861), s.v. “Loan.” Public domain.

Legal Subject: Loan

Case Date Legal Subject Abstract
Woods v. Carstairs 1777 Bargain, Loan, Ranking of Creditors This case concerns a promised wheat shipment from Robert Fleming, tenant in Falside, to James and William Woods, merchants in Elie. In January 1777, Fleming wrote the Woods brothers about his circumstances. He offered to send them "all the wheat that I have" in exchange for an advance of money. The Woods brothers sent Fleming about £9 in cash and approximately £30 in bills. Fleming then sent the Woods sixteen bolls of wheat, promising to deliver the remainder after seed-time. However, before this could happen, Fleming's affairs went into disorder, and he applied for a sequestration of his effects. The Woods then applied to James Carstairs, Fleming's factor, for the remainder of the wheat. Carstairs replied that the money Fleming had received from the two men was not a bargain, but a loan, and informed them that they would have to wait for the ranking of Fleming's creditors. The Woods then petitioned the Court to order Carstairs to deliver the wheat to them. As opposed to Carstair's claim that the transaction in question was a loan, the pursuers argued that it was a bargain.