Plaintiff, Robert J. Triffin, appeals from a * * * summary judgment dismissing his complaint for payment of a draft of defendant Cigna Insurance Company transferred to plaintiff by a holder in due course after Cigna had stopped payment on the instrument. 

   * * * The defaulting defendant, James Mills, received a draft in the amount of $484.12, dated July 7, 1993 from one of Cigna’s constituent companies, Atlantic Employers Insurance Company. The draft had been issued for workers’ compensation benefits. Mills falsely indicated to the issuer that he had not received the draft due to a change in his address and requested that payment be stopped and a new draft issued by defendant. The insurer complied and stopped payment on the initial draft. Mills nevertheless negotiated the initial draft to plaintiff’s assignor, Sun Corp. t/a Sun’s Market, before the stop payment notation was placed on the draft. All appear to agree that Sun Corp. was a holder in due course. Sun Corp. presented the draft for payment through depositary and collecting banks. The issuer’s bank dishonored the draft in accordance with its customer’s direction, stamped it ‘‘Stop Payment,’’ and returned the draft to Sun pressed its claim against the insurer as the issuer of the instrument, Sun Corp. would have been entitled to a judgment because of its status as a holder in due course.

   Thereafter, plaintiff, who apparently is in the business of purchasing dishonored instruments, obtained an assignment of Sun Corp.’s interests in this instrument and proceeded with this law suit. Plaintiff does not contend that he is a holder in due course of the instrument by virtue of it being negotiated to him for value, in good faith, without notice of dishonor, under the former holder in due course statute, UCC §3–302, nor under the present statute, §3–302a(2).

   Such negotiation is, of course, only one way for a holder to claim the status of a holder in due course. There exists a second method by which one may become a holder in due course. The shelter provisions of former UCC (§3–201), which was in effect when plaintiff obtained his assignment of this instrument, state clearly that ‘‘[t]ransfer of an instrument vests in the transferee such rights as the transferor has therein * * *.’’ Official Comment 3 to that section sets to rest any question of whether this section applies to the transfer by assignment of the rights of a holder in due course. The 544 Part 5 Negotiable Instruments rights as such * * *. [The former Negotiable Instruments Law section’s] policy is to assure the holder in due course a free market for the paper, and that policy is continued in this section.’’ Example (a) following this comment could have been drawn from this case, but is even stronger because it adds an element of fraud and posits a gratuitous transfer rather than a purchase, as in our case:

(a) A [Mills] induces M [Cigna] by fraud to make an instrument payable to A. A negotiates it to B [Sun Corp.], who takes as a holder in due course. After the instrument is overdue B gives it to C [plaintiff], who has notice of the fraud. C succeeds to B’s rights as a holder in due course, cutting off the defense.

   If the 1995 amendments are to be given retroactive effect, the law governing the rights of a transferee who merely has accepted the transfer of the instrument is now found in Revised UCC [§3–203]. It restates the principle of the former Official Comment 3, example (a), as substantive law.

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   The Uniform Commercial Code Comment 2 to this [Revised] section similarly states:

Under subsection (b) a holder in due course that transfers an instrument transfers those rights as a holder in due course to the purchaser. The policy is to assure the holder in due course a free market for the instrument.

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   Also, both the old and new sections have exceptions where the transferee participated in the fraud or where the instrument is then reconveyed to the party who originally committed the fraud. Neither exception applies to this case.

   These sections could not be clearer. Plaintiff received by [negotiation] the right of a holder in due course to this instrument, which apparently had been presented and then dishonored because of defendant’s stop payment order. * * *

   The summary judgment appealed from is reversed, and the matter is remanded with directions to enter judgment in favor of plaintiff, with interest.