Section 3--305. Rights of a Holder in Due Course. To the extent that a holder is a holder in due course he takes the instrument free from

1. (1) all claims to it on the part of any person; and
2. (2) all defenses of any party to the instrument with whom the holder has not dealt except
3. (a) infancy, to the extent that it is a defense to a simple contract; and
4. (b) such other incapacity, or duress, or illegality of the transaction, as renders the obligation of the party a nullity; and
5. (c) such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and
6. (d) discharge in insolvency proceedings; and
7. (e) any other discharge of which the holder has notice when he takes the instrument.