Cal. Codes » Commercial Code / DIVISION 3. NEGOTIABLE INSTRUMENTS / CHAPTER 2. Negotiation, Transfer, and Indorsement
California Codes

Cal. Commercial Code § 3201 (2026)

Negotiation, Transfer, and Indorsement

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(a)“Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.

(b)Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

Notes of Decisions
Cited in 7 cases, 1972–2018 · leading case: Remington Investments, Inc. v. Kadenacy, 930 F. Supp. 446 (C.D. Cal. 1996).
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Remington Investments, Inc. v. Kadenacy, 930 F. Supp. 446 (C.D. Cal. 1996). · cites it 2× “(citing Cal. Com.Code § 3201). The court went on to find that the policy favoring the sale of assets by the FDIC to private parties articulated in analogous situations compels giving the FDIC’s assignees the benefit of the FIRREA statute of limitations.”
In re Kang Jin Hwang, 396 B.R. 757 (Bankr. C.D. Cal. 2008). “Commercial Code § 3201 (UCC § 3-201) defines “negotiation” as follows: (a) “Negotiation” means a transfer of possession .”
McMullen Oil Co. v. Crysen Refining, Inc. (In Re McMullen Oil Co.), 251 B.R. 558 (Bankr. C.D. Cal. 2000). “Commercial Code § 3201 (UCC § 3201) defines "negotiation” as follows: (a) "Negotiation” means a transfer of possession .”
Feldman Constr. Co. v. Union Bank, 28 Cal. App. 3d 731 (Cal. Ct. App. 1972). “(Com. Code, §§ 3201, 3202.) Trans-World’s credit to Interstate did not operate as a discharge of the instrument.”
Aetna Cas. & Sur. Co. v. Schmitt, 441 F. Supp. 440 (N.D. Cal. 1977). · cites it 2× “Cal.Comm.Code § 3201. Indeed, contentions to the contrary are belied by the very casualness with which the act is done, for it is only because the claimant has confidence that California will protect him that he will readily accept instruments originating in it.”
De La Rochelle v. Woodbridge Grp. of Cos. (In re Woodbridge Grp. of Cos.), 593 B.R. 200 (Bankr. D. Del. 2018). · cites it 2× “6, § 3-201 (a) ; Cal. Com. Code § 3201 (a). "[N]egotiation requires transfer of possession of the instrument and its indorsement by the holder," Del.”
In re Joan Kathleen Green, No. CC-11-1374-MkHHa (B.A.P. 9th Cir. Oct. 15, 2012). “Because we already have held above that the Note was duly 8 negotiated to Waterfall under Cal. Com. Code § 3201 , Waterfall 9 also qualifies by operation of law as the assignee of the Deed of 10 Trust.”
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