From the Wikipedia explanation:

"Hypothecation

"Hypothecation, or 'trust receipts' are relatively uncommon forms of security interest whereby the underlying assets are pledged, not by delivery of the assets as in a conventional pledge, but by delivery of a document or other evidence of title. Hypothecation is usually seen in relation to bills of lading, whereby the bill of lading is endorsed by the secured party, who, unless the security is redeemed, can claim the property by delivery of the bill."

The above quote was extracted from the article on Security Interest. Link below. Also included a link to my blog/podcast, cause that's how I roll. ;-)
Source(s):
http://en.wikipedia.org/wiki/Security_interest

http://beancast.us


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