hypothecation


Also found in: Dictionary, Thesaurus, Financial, Wikipedia.
Related to hypothecation: hypothecation agreement

hypothecation

noun collateral, contract of morttage, contract of pledge, creation of a lien, guarantee, lien, mortgage, pledge, security
Associated concepts: hypothecated property
See also: charge, cloud, contract, guaranty, incumbrance, lien, specialty

hypothecation

1 a method of creating a HYPOTHEC.
2 in politics, rather than law, the assignation of an element of taxation to particular beneficiaries rather than the general coffers of the Treasury.

HYPOTHECATION, civil law. This term is used principally in the civil law; it is defined to be a right which a creditor has over a thing belonging to another, and which consists in the power to cause it to be sold, in order to be paid his claim out of the proceeds.
     2. There are two species of hypothecation, one called pledge, pignus, and, the other properly denominated hypothecation. Pledge is that species, of hypothecation which is contracted by the delivery of the debtor to the creditor, of the thing hypothecated. Hypothecation, properly so called, is that which is contracted without delivery of the thing hypothecated. 2 Bell's Com. 25, 5th ed.
     3. Hypothecation is further divided into general and special when the debtor hypothecates to his creditor all his estate and property, which he has, or may have, the hypothecation is general; when the hypothecation is confined to a particular estate, it is special.
     4. Hypothecations are also distinguished into conventional, legal, and tacit. 1. Conventional hypothecations are those which arise by the agreement of the parties. Dig. 20, 1, 5.
     5.-2. Legal hypothecation is that which has not been agreed upon by any contract, express or implied; such as arises from the effect of judgments and executions.
     6.-3. A tacit, which is also a legal hypothecation, is that which the law gives in certain cases, without the consent of the parties, to secure the creditor; such as, 1st. The lien which the public treasury has over the property of public debtors. Code, 8, 15, 1. 2d. The landlord has a lien on the goods in the house leased, for the payment of his rent. Dig. 20, 2, 2; Code, 8, 15, 7, 3d. The builder has a lien, for his bill, on the house he has built. Dig. 20, 1. 4th, The pupil has a lien on the property of the guardian for the balance of his account. Dig. 46, 6, 22; Code, 6, 37, 20. 5th. There is hypothecation of the goods of a testator for the security of a legacy he has given. Code, 6, 43, 1.
     7. In the common law, cases of hypothecation, in the strict sense of the civil law, that is, of a pledge of a chattel, without possession by the pledgee, are scarcely to be found; cases of bottomry bonds and claims for seamen's wages, against ships are the nearest approach to it; but these are liens and privileges rather than hypothecations. Story, Bailm. Sec. 288. It seems that chattels not in existence, though they cannot be pledged, can be hypothecated, so that the lien will attach, as soon as the chattel has been produced. 14 Pick. R. 497.
     Vide, generally, Poth. de l'Hypoth‚que; Poth. Mar. Contr. translated by Cushing, note. 26, p. 145; Commercial Code of France, translated by Rodman, note 52, p. 351; Merl. R‚pertoire, mot Hypoth‚que, where the subject is fully considered; 2 Bro. Civ. Law, 195; Ayl. Pand. 524; 1 Law Tracts, 224; Dane's Ab. h.t.; Abbott on Ship. Index, h.t.; 13 Ves. 599; Bac. Ab. Merchant, &c. G; Civil Code of Louis. tit. 22, where this sort of security bears the name of mortgage. (q.v.)

References in periodicals archive ?
Prohibit hypothecation (pledging interest as collateral for a loan).
This was well understood in the Civil Law, by which there might be a pledge with possession, and a Hypothecation without possession, and by which in either case the right travelled with the thing into whosesoever possession it came.
One wonders how the sale or hypothecation of a steel mill could ever take place if a routine discounted cash flow
The Copyright Act defines the term "transfer of copyright ownership" to include "an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright.
But pure hypothecation, which is this linking of one tax to perhaps the fate or fortune of the economic cycle, is really not acceptable.
It is far too early to make such a judgement; indeed, we are not yet clear about the whole range of influences upon this government: besides, as expected, the government have rejected the idea of hypothecation.
The guarantee scheme alongwith other security arrangement like mortgages, hypothecation, and guarantors will considerably reduce the risks for the banks.
Most leases require landlord consent to a sublease, lease assignment or lease hypothecation or encumbrance or to an occupancy of the premises by third parties.
Auvtion are invited for Hypothecation of machinery of 18 items
ISDA surveys suggest that roughly three quarters of trades comingle these margins in non-segregated accounts, and over 90 per cent of the cash is used in re hypothecation.
Bluegreen Corporation (NYSE: BXG), a US-based company that owns and operates Colorful Places to Live and Play, has entered into a revolving timeshare receivables hypothecation facility with a syndicate of lenders led by Liberty Bank.