Definitions from Black's Law Dictionary: 2nd Edition and Ballentine's Law Dictionary as are available for each term in each dictionary.
  • Ballentine's Law Dictionary

    The act of hypothecating.

  • Black's Law Dictionary: 2nd Edition

    A term borrowed from the civil law. In so far as it is naturalized in English and American law, it means a contract of mortgage or pledge in which the subject-matter is not delivered into the possession of the pledgee or pawnee; or, conversely, a conventional right existing in one person over specific property of another, which consists in the power to cause a sale of the same, though it be not in his possession, in order that a specific claim of the creditor may be satisfied out of the proceeds. The term is frequently used in our textbooks and reports, particularly upon the law of bottomry and maritime liens; thus a vessel is said to be hypothecated for the demand of one who has advanced money for supplies. In the common law, there are but few, if any, cases of hypothecation, in the strict sense of the civil law ; that is, a pledge without possession by the pledgee. The nearest approaches, perhaps, are cases of bottomry bands and claims of materialmen, and of seamen for wages ; but these are liens and privileges, rather than hypothecations. Story, Bailm. ยง 288. "Hypothecation" is a term of the civil law, and is tbat hind of pledge in which the possession of the thing pledged remains with the debtor, (the obligation resting in mere contract without delivery ;) and in this respect distinguished from "pignus," in which possession is delivered to the creditor or pawnee. Whitney v. Peay, 24 Ark. 27. See 2 Bell, Comm. 25.