How do you properly use the word "melancholy"?

This is something I've wondered for a long time. When I look up "melancholy" in the dictionary, it says that it is a noun. So logically, I would use it as a state of being, synonymous "despondency". However, I've heard some people use it more like an adjective, like "sad". Here are some examples to illustrate what I mean:

How I feel it should be used:
"After the death of my loved one, I experienced melancholy (despondency)."

How I've heard it used:
"After the death of my loved one, I was melancholy."

That last one just sounds wrong to my mind, so for the sake of my selfish mental sanity, I hope the first one is the proper way to use the word.

So which is more correct? Thank you for your help.