Opinion
November, 1928.
Appeal from Surrogate's Court of Monroe County.
Present — Hubbs, P.J., Clark, Sears, Crouch and Taylor, JJ. Decree modified in accordance with the opinion, and as modified affirmed, without costs of this appeal to either party.
We have reached the conclusion that the value of testator's stock of Scrantom's, Incorporated, should be arrived at as follows:
Value of stock: Assets (as per Exhibit 1) ................................ $454,265 85 Deduct liabilities (as per Exhibit 1, plus taxes) ........ 62,020 89 ___________ Book value of stock ...................................... $392,244 96 Add value of good will as computed below ................. 9,566 04 ___________ $401,811 00 Value of each share ......................... $66 97 Value of good will: Net profits for 1922 (Exhibit 4) ......................... $36,326 00 Net profits for 1923 (Exhibit 4) ......................... 27,543 36 ___________ Total for two years .................................. $63,869 36 Average annual net profits for the two years ......... 31,934 68 Book value of capital stock: 1922 Stated capital (Exhibit 5) ......... $349,376 60 Surplus (Exhibit 5) ................ 4,000 00 Undivided profits 1922 (Exhibit 5) . 11,325 00 ____________ Book value of capital stock 1922 ............... $364,701 60 1923 Stated capital (Exhibit 5) ......... $349,376 60 Surplus (Exhibit 5) ................ 4,000 00 Undivided profits 1923 (Exhibit 5) . 27,543 36 ___________ Book value of capital stock 1923 ............... 380,919 96 ___________ Total for two years ....................... $745,621 56 Average book value of capital stock for the two years ........................................ 372,810 78 Six per cent interest on average capital ................... 22,368 64 ___________ Difference between average net profits and interest on average capital .......................................... $9,566 04 Good will factor 1 year. ___________ Value of good will .................................... $9,566 04 Value of testator's 2,500 shares .......... $167,425 00 The learned surrogate determined as matter of fact that the "good will factor," being the number of years purchase to be used as a multiple in computing the value of the good will, should be one. A majority of the justices of this court find no sufficient reason to disturb this finding. The decree should be modified accordingly, and as so modified, affirmed, without costs. All concur, except Crouch, J., who dissents from so much of the determination as affirms the surrogate's decision as to the factor, and is of the opinion that it should be two, instead of one.