HYPOTHECATION. A right which a creditor has over a thing belonging to another, and which consists in a power to cause it to be sold, in order to be paid his claim out of the proceeds.
There are two species of hypothecation, one called pledge, pipit's, and the other properly de nominated hypothecation. Pledge is that species of hypothecation which is contracted by the deli very by the debtor to the creditor of the thing hy pothecated. Hypothecation, properly so called, is that which is contracted without delivery of the thing hypothecated. 2 Bell, Comm. 5th ed. 25.
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 ; eases of bottomry bonds and claims for seamen's wages against ships are the nearest approach to it; but these are liens and pri vileges, rather than hypothecations. Story, Bailm. 288. It seems that chattels not in existence, though they cannot be pledged, csn be hypothecated, so that the lien will attach aa soon as the chattel has been produced. 14 Pick. Mass. 497.
Conventional hypothecations are those which arise by agreement of the parties. Dig. 20.
1. 5'.
General hypothecations are those by which the debtor hypothecates to his creditor all his estate which he has or may have.
Legal hypothecations are those which arise without any contract therefor between the parties, express or implied.
Special hypothecations are hypothecations of a particular estate..
Tacit hypothecations are such as the law gives in certain cases, without the consent of the parties, to secure the creditor. They are a species of legal hypothecation.
Thus, the public treasury has a lien over the property of public debtors. Code, 8. 15. 1. 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. The builder has a lien, for his bill, on the house he has built. Dig. 20. 1. The pupil has a lien on the property of the guardian for the balance I. O. U. In Common Law. A memo randum of debt in use among merchants. It is not promissory note, as it contains no direct promise to pay. See 4 Carr. & P. 324 ; 1 Mann. & G. 46 ; 1 C. B. 543; 1 Esp. 426 ; Parsons, Bills .& Notes.