diff --git a/controller/notesapicontroller.php b/controller/notesapicontroller.php
index 4f55b3f93..31f733f0c 100644
--- a/controller/notesapicontroller.php
+++ b/controller/notesapicontroller.php
@@ -108,14 +108,15 @@ public function get($id, $exclude='') {
      * @NoCSRFRequired
      *
      * @param string $content
+     * @param string $category
      * @param int $modified
      * @param boolean $favorite
      * @return DataResponse
      */
-    public function create($content, $modified=0, $favorite=null) {
-        return $this->respond(function () use ($content, $modified, $favorite) {
+    public function create($content, $category=null, $modified=0, $favorite=null) {
+        return $this->respond(function () use ($content, $category, $modified, $favorite) {
             $note = $this->service->create($this->userId);
-            return $this->updateData($note->getId(), $content, $modified, $favorite);
+            return $this->updateData($note->getId(), $content, $category, $modified, $favorite);
         });
     }
 
@@ -127,13 +128,14 @@ public function create($content, $modified=0, $favorite=null) {
      *
      * @param int $id
      * @param string $content
+     * @param string $category
      * @param int $modified
      * @param boolean $favorite
      * @return DataResponse
      */
-    public function update($id, $content=null, $modified=0, $favorite=null) {
-        return $this->respond(function () use ($id, $content, $modified, $favorite) {
-            return $this->updateData($id, $content, $modified, $favorite);
+    public function update($id, $content=null, $category=null, $modified=0, $favorite=null) {
+        return $this->respond(function () use ($id, $content, $category, $modified, $favorite) {
+            return $this->updateData($id, $content, $category, $modified, $favorite);
         });
     }
 
@@ -145,14 +147,14 @@ public function update($id, $content=null, $modified=0, $favorite=null) {
      * @param boolean $favorite
      * @return Note
      */
-    private function updateData($id, $content, $modified, $favorite) {
+    private function updateData($id, $content, $category, $modified, $favorite) {
         if($favorite!==null) {
             $this->service->favorite($id, $favorite, $this->userId);
         }
         if($content===null) {
             return $this->service->get($id, $this->userId);
         } else {
-            return $this->service->update($id, $content, $this->userId, $modified);
+            return $this->service->update($id, $content, $this->userId, $category, $modified);
         }
     }
 
diff --git a/service/notesservice.php b/service/notesservice.php
index b14006b14..06b3149a6 100644
--- a/service/notesservice.php
+++ b/service/notesservice.php
@@ -15,6 +15,7 @@
 use OCP\IL10N;
 use OCP\Files\IRootFolder;
 use OCP\Files\Folder;
+use OCP\ILogger;
 
 use OCA\Notes\Db\Note;
 
@@ -27,14 +28,20 @@ class NotesService {
 
     private $l10n;
     private $root;
+    private $logger;
+    private $appName;
 
     /**
      * @param IRootFolder $root
      * @param IL10N $l10n
+     * @param ILogger $logger
+     * @param String $appName
      */
-    public function __construct (IRootFolder $root, IL10N $l10n) {
+    public function __construct (IRootFolder $root, IL10N $l10n, ILogger $logger, $appName) {
         $this->root = $root;
         $this->l10n = $l10n;
+        $this->logger = $logger;
+        $this->appName = $appName;
     }
 
 
@@ -117,7 +124,7 @@ public function create ($userId) {
      * @throws NoteDoesNotExistException if note does not exist
      * @return \OCA\Notes\Db\Note the updated note
      */
-    public function update ($id, $content, $userId, $mtime=0) {
+    public function update ($id, $content, $userId, $category=null, $mtime=0) {
         $notesFolder = $this->getFolderForUser($userId);
         $file = $this->getFileById($notesFolder, $id);
         $folder = $file->getParent();
@@ -138,15 +145,32 @@ public function update ($id, $content, $userId, $mtime=0) {
         // using a maximum of 100 chars should be enough
         $title = mb_substr($title, 0, 100, "UTF-8");
 
-        // generate filename if there were collisions
-        $currentFilePath = $file->getPath();
-        $basePath = pathinfo($file->getPath(), PATHINFO_DIRNAME);
-        $fileExtension = pathinfo($file->getName(), PATHINFO_EXTENSION);
-        $newFilePath = $basePath . '/' . $this->generateFileName($folder, $title, $fileExtension, $id);
 
-        // if the current path is not the new path, the file has to be renamed
-        if($currentFilePath !== $newFilePath) {
-            $file->move($newFilePath);
+        // rename/move file with respect to title/category
+        // this can fail if access rights are not sufficient or category name is illegal
+        try {
+            $currentFilePath = $file->getPath();
+            $fileExtension = pathinfo($file->getName(), PATHINFO_EXTENSION);
+
+            // detect (new) folder path based on category name
+            if($category===null) {
+                $basePath = pathinfo($file->getPath(), PATHINFO_DIRNAME);
+            } else {
+                $basePath = $notesFolder->getPath();
+                if(!empty($category))
+                    $basePath .= '/'.$category;
+                $this->getOrCreateFolder($basePath);
+            }
+
+            // assemble new file path
+            $newFilePath = $basePath . '/' . $this->generateFileName($folder, $title, $fileExtension, $id);
+
+            // if the current path is not the new path, the file has to be renamed
+            if($currentFilePath !== $newFilePath) {
+                $file->move($newFilePath);
+            }
+        } catch(\OCP\Files\NotPermittedException $e) {
+            $this->logger->error('Moving this note to the desired target is not allowed. Please check the note\'s target category.', array('app' => $this->appName));
         }
 
         $file->putContent($content);
@@ -179,7 +203,7 @@ public function favorite ($id, $favorite, $userId){
             $tagger->removeFromFavorites($id);
 
         $tags = $tagger->getTagsForObjects([$id]);
-        return in_array(\OC\Tags::TAG_FAVORITE, $tags[$id]);
+        return array_key_exists($id, $tags) && in_array(\OC\Tags::TAG_FAVORITE, $tags[$id]);
     }
 
 
@@ -219,6 +243,16 @@ private function getFileById ($folder, $id) {
      */
     private function getFolderForUser ($userId) {
         $path = '/' . $userId . '/files/Notes';
+        return $this->getOrCreateFolder($path);
+    }
+
+
+    /**
+     * Finds a folder and creates it if non-existent
+     * @param string $path path to the folder
+     * @return Folder
+     */
+    private function getOrCreateFolder($path) {
         if ($this->root->nodeExists($path)) {
             $folder = $this->root->get($path);
         } else {
@@ -262,7 +296,6 @@ private function generateFileName (Folder $folder, $title, $extension, $id) {
         }
     }
 
-
 	/**
 	 * gather note files in given directory and all subdirectories
 	 * @param Folder $folder
diff --git a/tests/integration/controller/NotesApiControllerTest.php b/tests/integration/controller/NotesApiControllerTest.php
index 1d101d27a..9f272f7d3 100644
--- a/tests/integration/controller/NotesApiControllerTest.php
+++ b/tests/integration/controller/NotesApiControllerTest.php
@@ -54,7 +54,7 @@ public function testUpdate() {
         $this->assertEquals($note->getId(), $note2->getId());
         $this->assertNotEquals($t, $note2->getModified());
 
-        $note3 = $this->controller->update($note->getId(), 'test3', $t)->getData();
+        $note3 = $this->controller->update($note->getId(), 'test3', null, $t)->getData();
         $this->assertEquals('test3', $note3->getContent());
         $this->assertEquals($note->getId(), $note3->getId());
         $this->assertEquals($t, $note3->getModified());