Tennessee Code Annotated
Tenn. Code Ann. § 47-3-203 (2026)
Transfer of instrument - Rights acquired by transfer
✓ current as of May 2026
- (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
- (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
- (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of endorsement by the transferor, the transferee has a specifically enforceable right to the unqualified endorsement of the transferor, but negotiation of the instrument does not occur until the endorsement is made.
- (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this chapter and has only the rights of a partial assignee.
Acts 1995, ch. 397, § 2.
Notes of Decisions
Cited in 7
cases, 2004–2020 · leading case: Mostoller v. Saxon Mortg. Servs., Inc. (In re Hunter), 466 B.R. 439 (Bankr. E.D. Tenn. 2012).
Mostoller v. Saxon Mortg. Servs., Inc. (In re Hunter), 466 B.R. 439 (Bankr. E.D. Tenn. 2012). “Nevertheless, “[transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instru-menté]” Tenn.Code Ann. § 47-3-203(b) (2001); see also Tenn.”
Donaldson v. BAC Home Loans Servicing, L.P., 813 F. Supp. 2d 885 (M.D. Tenn. 2011). “Comment 1 to § 47-3-203 clarifies that “[t]he right to enforce an instrument and ownership of the instrument are two different concepts,” and Comment 2 explains that “[i]f the transferee is not a holder because the transferor did not indorse, the transferee is nevertheless a…”
Aurora Loan Servs., LLC v. Yvette D. Woody (Tenn. Ct. App. 2014). “” Tenn. Code Ann. § 47-3-203 . The comments to Tennessee Code Annotated Section 47-3-203 indicate that: “Although transfer of an instrument might mean in a particular case that title to the instrument passes to the transferee, that result does not follow in all cases.”
Fed. Deposit Ins. Corp. v. Ashmore, 698 F. App'x 286 (6th Cir. 2017). “On appeal, Ashmore’s sole argument is that there is a genuine dispute of material fact in regard to whether Citizens properly transferred the Note to the Bank pursuant to Tenn. Code Ann. § 47-3-203 (a). It is undisputed that Ashmore’s note was delivered to the Bank by an agent…”
Fasil Kebede v. Suntrust Mortg., Inc., 612 F. App'x 839 (6th Cir. 2015). “See Tenn. Code Ann. § 47-3-203 (b) (“Transfer of an instrument .”
State Resources Corp. v. Thomas E. Talley (Tenn. Ct. App. 2004). “” T.C.A. §47-3-203, cmt. 1. -3- The question of whether a party is a “holder” of an instrument, and as such entitled to enforce it, is, of course, to be distinguished from the question of whether a party is a “holder in due course” so as to be free from defenses available…”
Brown v. Brown (M.D. Tenn. 2020). “§ 47-3-203 (“Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument’).”
— Tenn. Code Ann. § 47-3-203(a) — 1 case
Donaldson v. BAC Home Loans Servicing, L.P., 813 F. Supp. 2d 885 (M.D. Tenn. 2011). “Comment 1 to § 47-3-203 clarifies that “[t]he right to enforce an instrument and ownership of the instrument are two different concepts,” and Comment 2 explains that “[i]f the transferee is not a holder because the transferor did not indorse, the transferee is nevertheless a…”
— Tenn. Code Ann. § 47-3-203(b) — 3 cases
Donaldson v. BAC Home Loans Servicing, L.P., 813 F. Supp. 2d 885 (M.D. Tenn. 2011). “Comment 1 to § 47-3-203 clarifies that “[t]he right to enforce an instrument and ownership of the instrument are two different concepts,” and Comment 2 explains that “[i]f the transferee is not a holder because the transferor did not indorse, the transferee is nevertheless a…”
Mostoller v. Saxon Mortg. Servs., Inc. (In re Hunter), 466 B.R. 439 (Bankr. E.D. Tenn. 2012). “Nevertheless, “[transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instru-menté]” Tenn.Code Ann. § 47-3-203(b) (2001); see also Tenn.”
Aurora Loan Servs., LLC v. Yvette D. Woody (Tenn. Ct. App. 2014). “” Tenn. Code Ann. § 47-3-203 . The comments to Tennessee Code Annotated Section 47-3-203 indicate that: “Although transfer of an instrument might mean in a particular case that title to the instrument passes to the transferee, that result does not follow in all cases.”
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