The Collaborative International Dictionary of English v.0.48:

Negotiable \Ne*go"ti*a*ble\ (? or ?), a. [Cf. F. n['e]gotiable.
   See Negotiate.]
   Capable of being negotiated; transferable by assignment or
   indorsement to another person; as, a negotiable note or bill
   of exchange.
   [1913 Webster]

   Negotiable paper, any commercial paper transferable by sale
      or delivery and indorsement, as bills of exchange, drafts,
      checks, and promissory notes.
      [1913 Webster]

Bouvier's Law Dictionary, Revised 6th Ed (1856):

NEGOTIABLE PAPER, contracts. This term is applied to bills of exchange and
promissory notes, which are assignable by indorsement or delivery.
     2. The statute of 3 & 4 Anne (the principles of which have been
generally adopted in this country, either formally, or in effect,) made
promissory notes payable to a person, or to his order, or bearer, negotiable
like inland bills, according to the custom of merchants.
     3. This negotiable quality transfers the debt from the party to whom it
was originally owing, to the holder, when the instrument is properly
indorsed, so as to enable the latter to sue in his own name, both the maker
of a promissory note, or the acceptor of a bill of exchange, and the other
parties to such instruments, such as the drawer of a bill, and the indorser
of a bill or note, unless the holder has been guilty of laches in giving the
required notice of non-acceptance or non-payment. But in order to make paper
negotiable, it is essential that it be payable in money only, at all events,
and not out of a particular fund. 1 Cowen, 691; 6 Cowen, 108; 2 Whart. 233;
1 Bibb, 490, 503; 1 Ham. 272; 3 J. J. Marsh, 174, 542; 3 Halst. 262; 4
Blackf. 47; 6 J. J. Marsh, 170; 4 Mont. 124. See 1 W. C. C. R. 512; 1 Miles,
294; 6 Munf. 3; 10 S. & R. 94; 4 Watts, 400; 4 Whart. R. 252; 9 John. 120;
19 John. 144; 11 Vern. 268; 21 Pick. 140. Vide Promissory note. Vide 3 Kent.
Com. Lecture 44; Com. Dig. Merchant, F 15, 16; 2 Hill, R. 59; 13 East, 509;
3 B. & C. 47; 7 Bing. 284; 5 T. R. 683; 7 Taunt. 265, 278; 3 Burr. 1516 6
Cowen, 151.
     4. To render a bill or note negotiable, it must be payable to order, or
to bearer. When it is payable "to A B only," it cannot be negotiated so as
to give the indorsee a claim against any one but his indorser. Dougl. 615.
An indorsement to A B, without adding "or order," is not restrictive to A B
alone, he may, therefore, assign it to another; Str. 557; or he may indorse
it in blank, when any attempt, afterwards, to restrain its negotiability
will be unavailing. Esp. N. P. Cas. 180; 1 Bl. Rep. 295. Vide Blank
Indorsement; Indorsement.