hypothecation

hypothecation
1) An authority given to a banker, usually as a letter of hypothecation, to enable the bank to sell goods that have been pledged to them as security for a loan. It applies when the bank is unable to obtain the goods themselves. The goods have often been pledged as security in relation to a documentary bill, the banker being entitled to sell the goods if the bill is dishonoured by non-acceptance or non-payment.
2) A mortgage granted by a ship's master to secure the repayment with interest, on the safe arrival of the ship at her destination, of money borrowed during a voyage as a matter of necessity (e.g. to pay for urgent repairs). The hypothecation of a ship itself, with or without cargo, is called bottomry and is effected by a bottomry bond; that of its cargo alone is respondentia and requires a respondentia bond. The bondholder is entitled to a maritime lien.
3) The practice of reserving the revenue from a particular tax or duty for spending on a particular stated purpose: for example, dedicating revenues received from the tax on tobacco products to health spending.

Accounting dictionary. 2014.

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Look at other dictionaries:

  • hypothecation — I noun collateral, contract of mortgage, contract of pledge, creation of a lien, guarantee, lien, mortgage, pledge, security associated concepts: hypothecated property II index charge (lien), cloud (incum …   Law dictionary

  • Hypothecation — Hy*poth e*ca tion, n. [LL. hypothecatio.] 1. (Civ. Law) The act or contract by which property is hypothecated; a right which a creditor has in or to the property of his debtor, in virtue of which he may cause it to be sold and the price… …   The Collaborative International Dictionary of English

  • Hypothecation — See also hypothec. The original use of the word hypothecation was for a pledge of property as collateral for a debt without transfer of possession to the party making the loan. The arrangement is common with modern mortgages the borrower retains… …   Wikipedia

  • hypothecation — A Roman law name for a pawn or pledge wherein the feigned pledge remained in the possession of the pledgor. 41 Am J1st Pldg & Col § 2. A contract whereby, without change of possession, specific property is designated as security for the payment… …   Ballentine's law dictionary

  • hypothecation — (1) An archaic term for pledging that did not involve either possession or title transfer. (2) Any pledge of an asset as collateral for a debt. (An uncommon but correct usage.) (3) The pledge of marketable securities or deposits to secure a loan… …   Financial and business terms

  • hypothecation — 1) An authority given to a banker, usually as a letter of hypothecation, to enable the bank to sell goods that have been pledged (see pledge) to them as security for a loan. It applies when the bank is unable to obtain the goods themselves. The… …   Big dictionary of business and management

  • hypothecation — hə̇ˌpäthəˈkāshən, (ˌ)hīˌ noun ( s) Etymology: Medieval Latin hypothecation , hypothecatio, from hypothecatus (past participle) + Latin ion , io ion 1. Roman, civil, & maritime law : the act or contract by which property (as real property) is… …   Useful english dictionary

  • hypothecation certificate — noun : a certificate attached to a bill of exchange empowering the holder to dispose of merchandise if payment or acceptance is refused called also letter of hypothecation …   Useful english dictionary

  • hypothecation — noun see hypothecate I …   New Collegiate Dictionary

  • hypothecation — See hypothecate. * * * …   Universalium

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