ADOLPH RAMISH v. WOODRUFF (1934)

This is an appeal from a judgment rendered in a suit upon a promissory note for $10,000 executed by the defendant, Leonard J. Woodruff, payable to Gavin W. Craig and delivered by Murrey M. Somerfield as Craig's agent to Adolph Ramish, president of Adolph Ramish, Inc., the plaintiff herein. There is also before us a motion to dismiss the appeal or affirm the judgment as well as a motion to take further evidence.

Simultaneously with the execution and delivery of the note sued upon, Gavin W. Craig executed and delivered to Woodruff his promissory note for $10,000. Both notes were dated February 19, 1932, and matured ninety days after date, bearing interest at 7 per cent. per annum. It was stipulated at the trial that nothing had been paid on the note from Craig to Woodruff. At the time of the execution of these notes, the plaintiff held the promissory note of Gavin W. Craig for $13,500. This note was not put in evidence, but testimony was given showing that it matured in February, 1932, and that a thirty-day extension had been given in that month. Craig indorsed the Woodruff note, and extended the time of payment thereon, and on May 7, 1932. it was delivered to the plaintiff as stated above, but whether as collateral security for the indebtedness of Craig to the plaintiff was one of the issues in the case. The facts will appear with more particularity in connection with the discussion of the points raised by this appeal, but the note sued upon reads as follows:

‘$10,000.00

Los Angeles, California, ‘February 19, 1932.

‘Ninety days after date, for value received I promise to pay to Gavin W. Craig or order at Los Angeles, California, the sum of Ten Thousand and 00/100 Dollars with interest from date until paid at the rate of seven per cent per annum, payable maturity.

‘Should the interest not be so paid, it shall thereafter bear like interest as the principal. Should default be made in the payment of any installment of interest when due, then the whole sum of principal and interest shall become immediately due and payable at the option of the holder of this note. The undersigned (jointly and severally) further promise to pay all costs of collection, including attorney's fees, which may be incurred in the collection of this note, or any portion thereof, and in case suit is instituted for such purpose, the amount of attorney's fees, shall be such amount as the court shall adjudge reasonable. Principal and interest payable in gold coin of the United States of the present standard. The makers, sureties, guarantors and endorsers of this note hereby consent to extensions of time at or after the maturity hereof, and hereby waive diligence, protest, demand and notice of every kind. Should this note be signed by more than one person, firm or corporation, all of the obligations herein contained shall be considered joint and several obligations of each signer hereof.

‘[Signed] Leonard J. Woodruff.’

On the back of the note are two indorsements; the second is set out later on in this opinion; the first is as follows: ‘Interest paid to May 19, 1932. Time for payment of principal extended to July 19th, 1932. Gavin W. Craig.’

The defendant in his answer admitted the execution and delivery of the note to Craig, but denied the title of the plaintiff on the ground that the note was delivered to him for inspection and investigation only, and set up as defenses that the plaintiff's lien was, at most, for the sum of $6,820 only, that defendant had an offset as against Craig, and that plaintiff was not the holder in due course of the note sued upon.

We will first consider the arguments that the note was rendered nonnegotiable by the inclusion of the provision with regard to attorney's fees, and that it had been materially altered before its delivery to the plaintiff by the extension of time indorsed on the back. On the latter point it is sufficient to point out that the note contained a stipulation that the ‘makers, sureties, guarantors and endorsers of this note hereby consent to extensions of time at or after the maturity hereof,’ and that Craig testified that the extension was in his handwriting and that he made it in the presence of Woodruff. So, if the extension did amount to a material alteration, it was consented to and authorized by the defendant. Cal. Civ. Code, § 3205. With respect to the provision for attorney's fees, the contention is made that it does not limit the payment of the costs of collection and attorney's fees to the event that payment is not made at maturity, but provides for their payment in any event, and since such a provision is not authorized by the Negotiable Instruments Law (Cal. Civ. Code, § 3083 [5]), the note is nonnegotiable. We are cited to no California cases directly in point, but we are satisfied the rule must be, as set forth in Hutson v. Rankin, 36 Idaho, 169, 213 P. 345, 347, 33 A. L. R. 91, that, ‘if a note is paid promptly at maturity no attorney fee or other costs of collection could accrue, and if the clause here under consideration is to be given its natural and ordinary construction, it means that if the note is collected by an attorney after maturity, the maker agrees to pay a reasonable attotney fee.’ See, also, Pugh v. Dawson, 95 Cal. App. 505, 273 P. 39, upholding, but without discussion of the point, a similar clause which was not in the exact words of the Code and did not contain the express limitation ‘after maturity.’

Complaint is made of the finding in paragraph III of the findings of fact and conclusions of law that ‘said Gavin W. Craig, endorsed, said note in blank,’ and that plaintiff was ‘the holder of the note herein sued upon for value and in the usual course of business, as collateral security.’ The second indorsement on the back of the note is as follows: ‘* * * California. * * * For value received, I hereby waive presentation of the within note to the maker, demand of payment, protest and notice of non-payment, and do guarantee payment of the same, and of all expenses of collection thereof including attorney's fees, incurred in enforcing this guaranty and do hereby without notice, expressly consent to the delay or indulgence of enforcing payment and to the express extension of the time of payment of the same. [Signed] Gavin W. Craig.’ The appellant takes the position that the quoted inscription does not amount to a commercial indorsement, but is a mere guaranty and does not operate as a transfer which cuts off the defenses of the maker.

The problem of whether a transfer by guaranty instead of by the usual form of indorsement operates as an ordinary commercial indorsement has two aspects: First, the passage of title to the transferee; and, second, the liability incurred by the transferor who has made the guaranty. We are here concerned with the first only, since this is a suit by the transferee against the maker, who has set up as a defense his right of offset against the original payee who is also the maker of the guaranty.

The cases throughout the country are in conflict upon this question, and this jurisdiction is not as yet definitely aligned with either group. The respondent cites in its brief Bank of Italy, etc., Ass'n v. Symmes, 118 Cal. App. 716, 5 P.(2d) 956, which recognizes the conflict but does not decide the point. The issue therein litigated was the release of the party secondarily liable; it being held that it was immaterial whether he was considered as a guarantor or as an indorser, although the case contains dictum to the effect that the engagement was intended as a guaranty and not as an indorsement. While the wording of the undertaking there involved was substantially the same as that here under consideration, it was placed upon the note as an accommodation and before delivery to the original payee; hence the problem of negotiation was not presented to the court. It should, perhaps, be noticed in passing that a recent Connecticut case, Jaronko v. Czerwinski, 117 Conn. 15, 166 A. 388, has held that accommodation indorsers who employ the form of a guaranty incur the successive liability of indorsers rather than the contributive liability of guarantors. In Thurber v. Fisher, 124 Cal. App. 312, 12 P.(2d) 481, and District Court of Appeal indicated its willingness to follow those cases which hold such a guarantor to be an indorser with enlarged liability. However, this court has held that an intention not to be bound as a general indorser might be shown where the indorsement contained the following expression: ‘I hereby sell, set over and assign the within note, * * * and hereby guarantee that this is a good, valid and subsisting promissory note,’ and that, where such intention existed, the indorsement was qualified. Cristina v. Mattenberger, 212 Cal. 670, 300 P. 450, citing Hammond Lumber Co. v. Kearsley, 36 Cal. App. 431, 172 P. 404; and see note, 19 Cal. Law Rev. 324. In all of these cases the action was instituted for the purpose of enforcing the liability of the indorser, so the aspect of indorsement with which we are primarily concerned was not immediately involved. Nevertheless, the two cases last cited recognize and utilize, as the test of whether the undertaking constitutes a general indorsement, the intention of the transferor to assume the obligations of a general indorser. It would seem that this test could equally well be applied to an undertaking which operated to extend the liability of the transferor beyond that of the ordinary indorse in blank. Words of guaranty being words of enlargement rather than words of limitation, it may fairly be inferred that the transferor's intent was to assume the burdens of indorsement and, in addition, the unconditional liability of one who guarantees payment. This is the view of the majority and of the more recent cases. To recapitulate, the signature of the payee is a blank indorsement which, by implication of law, passes title to the transferee and is also a promise to pay the instrument on default of the maker on condition that the proper steps are taken to charge him. The signed guaranty is the same contract with one-half of the obligation (the promise to pay) expressed and made unconditional, and nothing therein restricts or negatives the implication of the blank indorsement created by the signature; that is, that portion of the contract relating to the transfer of the instrument rests in parol, as always; therefore title passes as by a blank indorsement free of the equities of the maker against the original payee. In Rawlins County State Bank v. Rummel, 114 Kan. 597, 220 P. 255, 256, where the indorsement was made in the form of a guaranty, the court quotes the Kansas enactment of the Uniform Negotiable Instruments Law, and says:

‘Section 6557 of the General Statutes of 1915 reads:

“An instrument is negotiated when it is transferred from one person to another in such manner as to constitute the transferee the holder thereof. If payable to bearer, it is negotiated by delivery; if payable to order, it is negotiated by the indorsement of the holder completed by delivery.'

‘The note in controversy was transferred to the plaintiff in such a manner as to constitute it the owner and holder of the note. * * *

‘There was nothing on the face of the note or in the indorsement to show that the plaintiff was not a holder in due course. So far as the note in controversy was concerned, the writing on the back of it transferred it to the plaintiff. If that writing contained matter unnecessary in an indorsement, the rights of the purchaser could not be affected thereby, unless the additional matter was such as to give him notice of a defect in the note as between the parties thereto. The guaranty of payment of the note and of others given in renewal of it did not give any notice of any defect in the note or in the title of the holder thereof.

‘In Kellogg v. Douglas County Bank, 58 Kan. 43, 48 P. 587, 62 Am. St. Rep. 596, the following language was used:

“An indorsement made on the back of promissory note in the following language: ‘For value received, we hereby guarantee payment of within note at maturity, waiving demand, protest, and notice of protest,’ signed by the payee of the note, is a commercial indorsement as well as a guarantee of payment; and the note, being negotiable in form, is sufficient to pass a valid title to the paper and protect and innocent purchaser thereof.”

It has also been said: ‘There is a wide difference between writing on a separate piece of paper and a payee's writing something over his name on the back of a promissory note. If he should simply write his name on a separate sheet of blank paper, it would bind him to nothing; but if he writes his name on the back of a promissory note payable to his order, he becomes an indorser. So, if he should write an assignment, or a guaranty, or some other agreement, on a separate sheet of paper, and sign it, that would be a distinct contract; but when he writes his name upon the back of a note payable to his order, the addition of words which either limit or enlarge the usual liability on his part which would arise from a blank indorsement does not destroy the fact that the entry is an indorsement upon a negotiable paper, or prevent its efficacy as a method of passing the legal title upon negotiation, at least unless there is something in the indorsement to show an intention to destroy the negotiable character of the paper.’ Hendrix v. Bauhard Bros., 138 Ga. 473, 75 S. E. 588, 592, 43 L. R. A. (N. S.) 1028, Ann. Cas. 1913D, 688. Other cases which support this view are: First National Bank of Dalton, Ohio, v. Cummings, 69 Okl. 216, 171 P. 862, L. R. A. 1918D, 1099; Jones County Bank v. Kurt, 192 Iowa, 965, 182 N. W. 409, 16 A. L. R. 1286; National Bank of the Republic v. Price, 65 Utah, 57, 234 P. 231; Cady v. Bay City Land Co., 102 Or. 5, 201 P. 179, 182, 21 A. L. R. 1367; First National Bank of Durand v. Shaw, 157 Mich. 192, 121 N. W. 809, 133 Am. St. Rep. 342; Hoosier Mutual Ins. Co. v. Citizens' Trust & Savings Bank, 89 Ind. App. 5, 165 N. E. 446; Hutson v. Rankin, 36 Idaho, 169, 213 P. 345, 33 A. L. R. 91; Richmond Guano Co. v. Walston, 191 N. C. 797, 133 S. E. 196, 198, 46 A. L. R. 1512.

The minority rule, as exemplified by the case of Central Trust Co. v. First National Bank, 101 U. S. 68, 25 L. Ed. 876, is that a guaranty placed on a bill or note does not constitute a commercial negotiation thereof, that the guaranty is a separate contract, and that there is either no transfer or it operates as an assignment, the transferee taking subject to the equities of the maker, and this upon the theory that a blank indorsement admits of the implications of its terms only because of the fact that it is in blank and that where, as here, the contract is express, no other terms may be implied. For collections of cases and discussion of the opposing views see Notes 34 Yale L. J. 144; 72 U. of Pa. L. Rev. (Am. Law Reg.) 296; 21 A. L. R. 1375; 33 A. L. R. 97; 46 A. L. R. 1516.

The majority decisions are the better reasoned and are in accordance with the policy of free circulation of commercial paper as a substitute for money and with the spirit and purpose of the Negotiable Instruments Law. In Mangold & Glandt Bank v. Utterback, 54 Okl. 655, 160 P. 713, 715, L. R. A. 1917B, 364, after quoting section 4113 of the Oklahoma Revised Laws of 1910, which is identical with section 3144 of our Civil Code and with section 63 of the Negotiable Instruments Law, all of which provide: ‘A person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity,’ the Oklahoma court said: ‘It will be observed from section 4113 that the tendency of the law, when the status of a party who places his name upon the back of a negotiable instrument is under consideration, is to resolve all doubtful cases towards holding the same to be a commercial indorsement in due course. This rule is founded upon commercial necessity. The unshackeled circulation of negotiable notes is a matter a great importance. The different forms of commercial instruments take the place of money. To require each assignee, before accepting them, to inquire into and investigate every circumstance bearing upon the original execution and to take cognizance of all the equities between the original parties, would utterly destroy their commercial value and seriously impede business transactions.’ In Richmond Guano Co. v. Walston, supra, similar language is used: ‘The decisions years ago on this important question were chaotic. In more recent years, and especially since the passage among the states over the nation of the Negotiable Instruments Laws to make the laws more uniform, the decisions are more in accord, and the great wealth hold that the indorsement, as in the present case, ‘Demand, notice, and protest waived; payment guaranteed by the undersigned,’ is an indorsement with an enlarged liability. The language makes the holder one in due course, and the instrument is taken free from equities and defenses which the maker has against the payee. The great importance in commerce and trade has forced uniform legislation in regard to negotiable instruments, and the courts have now, with few exceptions, held that the holder, under the facts in the present, is one in due course with enlarged liability.' It is further to be borne in mind that the purpose of making the indorsement in this form must have been to make the instrument more attractive to the prospective purchaser. As said in Cady v. Bay City Land Co., supra: ‘It is not an instance where a stranger to the instrument guarantees its payment, which would be a collateral undertaking. It is a case of a payee, an actual party to the note, assuming a position in begotiating the same whereby he waives all further action on the part of the holder in fixing the liability of him who includes a guaranty in his indorsement.’ For these reasons we agree with the majority, and we are of the opinion that the finding of the trial court that the note had been indorsed in blank was correct and in accordance with the law.

The defendant objected to the introduction of the note in evidence on the ground that no transfer had been shown. In accordance with the views expressed above, the indorsement having been admitted, the note was properly received in evidence. Section 3140 of the Civil Code provides that ‘every holder is deemed prima facie to be a holder in due course.’ Where the genuineness of the indorsement is not legally challenged, or is established by proof, then the rule applies, and for the reason that, like an instrument made payable to bearer on its face, one payable to order may be negotiated by mere delivery when indorsed in blank by the payee; hence the presumption of ownership from the mere fact of the possession of such an instrument.

‘This is illustrated by some of the cases cited and quoted from in counsels' brief. Among them is the case of Dawson Town & Gas Co. v. Woodhull, 14 C. C. A. 464 [32 U. S. App. 134], 67 F. 451, wherein Circuit Judge Thayer, in the opinion of the court, said: ‘The legal presumption of ownership which exists in favor of one who is ostensibly in possession of negotiable notes indorsed in blank by the payee, as these notes were, and who brings a suit thereon, is not overcome by a mere denial of the fact of ownership contained in the answer. When these notes were offered, they were in the hands of the plaintiff's attorneys. The legal presumption was that they had received them from the hands of their client, * * * and that they were the client's property. There was no occasion, therefore, for offering testimony to confirm the presumption before the notes were admitted evidence.” Capitol Hill State Bank v. Rawlins Nat. Bank, 24 Wyo. 423, 160 P. 1171, 1176, 11 A. L. R. 937, 944.

It is insisted by the appellant that there was no delivery of the note other than for the purpose of inspection and investigation, that there was no meeting of the minds of Craig and the plaintiff corporation and that the agent, Sommerfield, was never directed or authorized to deliver the note as collateral security. The evidence with reference to this transaction is sharply conflicting. Ramish, the president of the plaintiff corporation, testified that Craig's note to plaintiff was due in February of 1932; that a thirty-day extension was given, and that in April the plaintiff threatened suit; that Sommerfield made several calls on Ramish for the purpose of securing an extension which was refused because no security was offered other than an interest in an apartment house which he refused to accept; that, afther that Sommerfield offered the Woodruff note as security; that he (Ramish) said he would accept it as collateral security ‘providing the note was any good’; that he received the note on May 7, 1932; that Sommerfield promised to get a report on the maker which he gave to Ramish on May 9th; that Ramish then himself investigated Woodruff's affairs, and, on May 11th told Sommerfield he would accept the note as collateral security, giving Craig an extension on his note until July 19th, when the Woodruff note was payable, but that no written extension had been given; that it was never intended that he should credit the Woodruff note on the Craig note, but only that he was no credit thereon whatever he collected on the Woodruff note at maturity. He also testified that, after May 7, 1932, Sommerfield never asked for the return of the Woodruff note.

The record contains a receipt dated May 7, 1932, and signed by Ramish, in which he acknowledges the receipt of the Woodruff note from Sommerfield, and that it was ‘to be held for a reasonable time for the purpose of investigation as to the responsibility of the maker.’ This is not inconsistent with Ramish's story of the transaction. There is also in evidence a carbon copy of a letter from Ramish's attorney to Craig dated July 16, 1932, inclosing a carbon copy of a letter to Woodruff ‘concerning note which Adolph Ramish Inc. hold as collateral for payment of your note dated November 3, 1931.’ Ramish's attorney testified that he was present on the occasion when Sommerfield offered the note as collateral security, and that the understanding was that the Craig note should be allowed to run until the maturity of the Woodruff note which was given to secure it; that the whole purpose of the transaction was to give security to gain time. One Weinblatt, who was involved in the transaction in connection with which Craig had given his note to Ramish, testified that Craig had tole him prior to May 7th that he was having Sommerfield negotiate with Ramish with the purpose of giving the Woodruff note as collateral security for his own note.

Murrey Sommerfield testified that he carried on the negotiations with Ramish with regard to Craig's note; that on May 7th he delivered the Woodruff note to Ramish for purposes of inspection and received the receipt; that he told Ramish the only way he could use the note was to return the Craig note; that, when he asked for its return, after having delivered the financial report on Woodruff, Ramish said, ‘Not yet’; that he wanted to try to collect the note; that nothing was said about holding it for security; that three or four weeks later Ramish still refused to return the Craig note, saying that he was not ‘ready to give it up’ or to say what he was going to do with the notes; that he knew of no extension agreement. Craig testified that he tole Sommerfield he believed it might be possible that the Woodruff note might be used in some way to satisfy Mr. Ramish as to his (Craig's) indebtedness, and that he wished Sommerfield to take the matter up with him ‘along those lines'; that he had no communication with Ramish thereafter: that Sommerfield reported that Ramish was not inclined to take the note, but would negotiate further; that he wanted the note to inspect it, and, if it were satisfactory, he might use it to extinguish the obligation Craig owned him, though not Weinblatt's. He also testified that Sommerfield later reported that he had left the note; that he saw the receipt about the date it bears; that later Sommerfield told him Ramish was satisfied to take the note, but would not return the Craig note until he had collected on the other one. Further on in his testimony he said that he was never notified that Ramish would actually accept the note, although he had found it to be good and satisfactory paper. He also said that in his instructions to Sommerfield the manner in which the note was to be used was left quite indefinite, ‘because it would be a matter of conversation and discussion between Mr. Sommerfield and Mr. Ramish’; that his understanding was that Ramish was considering holding the note ‘until it became due and collect from Mr. Woodruff’; that ‘it would be accepted, if at all, in the cancelation of my obligation, but I was never informed by Mr. Sommerfield that Mr. Ramish had said definitely that he would do that’; that no definite extension was ever given, the note was just allowed to run; that he could not remember whether he had ever previously requested Weinblatt to negotiate with Ramish for an extension.

On this state of the evidence, and especially since the testimony of both the principal and his agent was extremely vague and evasive, the trial court was amply justified in concluding that the plaintiff took the note in controversy as collateral security, and hence for value. In our view of the case, it is immaterial that no formal extension agreement was ever entered into. ‘It is the law that an antecedent debt constitutes a valuable consideration for a transfer as security, and the holder of the security is a purchaser for value as to third persons. Smitton v. McCullough, 182 Cal. 530, 537, 189 P. 686; Fowles v. National Bank of California, 167 Cal. 653, 664, 140 P. 271; Chapman v. Hughes, 134 Cal. 641, 659, 58 P. 298, 60 P. 974, 66 P. 982; 17 Cal. Jur. 955.’ Ekmann v. Plumas County Bank, 215 Cal. 671, 12 P.(2d) 433, 434.

The appellant offered to show that, although the face value of the Craig note was $13,500, the plaintiff had in fact only advanced the sum of $6,820, and that this amount was the actual indebtedness which the Woodruff note was given to secure, and such proof was refused by the trial court. This was error. We have already pointed out that, simultaneously with the execution and delivery of the Woodruff note, Craig executed and delivered to Woodruff his promissory note in the same amount, $10,000. The pledgee of notes can recover the full amount thereof from the maker, holding any surplus over the debt for the benefit of the payee-pledgor, when there are no equities between the maker and the pledgor, but, if there is any defense available to the maker against the indorser, the pledgee, although he is a holder in due course, is only a holder in due course to the amount of his debt, and can only recover on the note the amount for which it was pledged. ‘Where the holder has a lien on the instrument, arising either from contract or by implication of law, he is deemed a holder for value to the extent of his lien.’ Cal. Civ. Code, § 3108 [N. I. L. § 27]; Brannan's Negotiable Instruments Law [5th Ed.] 362; Bell v. Bean, 75 Cal. 86, 16 P. 521; Kelly v. Universal Oil Co., 65 Cal. App. 493, 498, 224 P. 261; Note 69 A. L. R. 898. It is obvious that, in order to determine the actual amount of the indebtedness secured, such evidence was both proper and necessary. To hold otherwise would be to allow a pledgee to recover from the maker of the collateral note, who has a defense against the pledgor, a greater amount than he could recover in a suit against the pledgor himself.

The appellant has presented a petition to take additional evidence in this court under section 956a of the Code of Civil Procedure and rule XXXVIII of the Rules of the Supreme Court. The testimony offered is directed toward showing that the plaintiff was not a holder in due course, that the note was not in the hands of the respondent prior to the date it became due. The evidence the appellant proposes to offer is the testimony of Joseph Weinblatt, who, appellant asserts, will testify that he had the note in his possession on the 23d of June, 1932, and, at the instance of Craig, was offering the same for sale, and of Ernest Smith, to whom the note was offered for sale as the property of Craig. In opposition to this petition, the respondent has filed the affidavit of the vice president of its bank and a photostatic copy of the receipt given for the note by the bank which tend to establish that the bank held the note for Ramish, Inc., from May 11, 1932, to June 13, 1932; and also the affidavit of Weinblatt denying that the note was in his possession or that he had seen it since before the 7th of May, 1932. It is said in Tupman v. Haberkern, 208 Cal. 256, 270, 280 P. 970, 976, that the primary purpose of the rule which allows the taking of evidence in the appellate court is that the reviewing court may affirm the judgment or modify and affirm it and terminate the litigation, but that, when the judgment must be reversed and a new trial had, findings in the appellate court are unauthorized and inappropriate unless the trial court is to be directed to enter judgment for the appellant, and, in that case, although findings may be made by the reviewing court, the power is to be used sparingly. Following this case and that of Davis v. Chipman, 210 Cal. 609, 293 P. 40, we deny the petition, for the reason that we are not so impressed by the evidence offered by the appellant, either in the trial court or in the petition now before us, that we are prepared to say that it appears ‘from the record * * * that on no theory grounded in reason and justice could the party defeated on appeal make a further substantial showing * * * in support of his cause.’ Moreover, should the appellant fail on this issue, it will be necessary to offer proof upon the question of the actual indebtedness secured.

For obvious reasons, the motion of the respondent to dismiss the appeal or affirm the judgment is likewise denied. The judgment is reversed.

WASTE, Chief Justice.

We concur: SHENK, J.; PRESTON, J.; LANGDON, J. Mr. Justice IRA F. THOMPSON, deeming himself disqualified, does not participate.