The New York herald., 1922-11-26
Weighing Good Wills" Value


date of decedents death to be s7,6s3.45.
In reviewing this valuation, the Surro-
gate said:
The appraiser ascertained the value of
the good will by deducting interest at the
rate of per cent. per annum on the capi-
tai employed by the company in it's bust
ness and multiplying the difference by
ten. This gave the value of the good win
as s1.507. .9224O. No exception was taken
to the amount which the appraiser adopt
ed as the average annual net profits, but
it is contended that the value of the good
will should be ascertained by multiplying
the average net profits by three or five
instead of ten, the latter being the figure
used by the appraiser"
The Surrogate then pointed out that the
cases in this country are not uniform in
regard to the number of years purchase
to be used and that most of the American
cases adopt period ranging from two to
six years. the number being dependent
upon the nature of the business the
length of time during which it has been
established at a particular place and the
extent to which it is known to the public
Tiffany & Co." he said, has an envi-
able international reputation as a crafts
man and tradesman; it has been established
in New York City for more tim sixty
years. If six years purchase of the aver
age annual net profits was considered not
an unreasonable value of the good will in
a case where the question of good will
related to the name under which a num-
ber of candy stores were conducted, 1t
would seem that the good will of a COM
pany having the prominence, the pernra-
nency and the established reputation of
Tiffany & Co. should be worth at least
profits. 1t seems to me, therefore, that
the finding of the appraiser was not
against the weight of evidence and was
not so manifestly incorrect as would war
ant the court in modifying or rejecting it,
Variations Many-Even Professions
Included.
In the transfer tax appraisal of the
estate of George A. Hearn, the good will
of the dry goods firm of James A. Hearn
& Son. which was established in West
Fourteenth street New York city, in 1879,
was valued at more than twice the value
of its tangible assets. The number of
years purchase used was five. I'm view of
the length of time during which the busi-
ness has been established. its reputation,
its extensive advertising and its prom
inence in the dry goods trade" the court
said Il think five years average of the
annual net profits is a reasonable value of
the good will of the business"
AS contrasted with these examples of
good will in business enterprises, it ap-
pears that while good will can be ac-
quired by doctor, lawyer or other pro-
fessiOnal man during his life time, as well
as by a business man, the good will built
up by the doctor. unlike that built up by
the business man. died with him
DR.. Eugene Wilson Caldwell left the
good will of his medical practice. together
with the apparatus used in connection
Herewith, to his two assistants, and the
transfer tax appraiser valued his good will
at large amount. The executors of his
viii contended that the business had no
good viii which survived him and appealed
from the order assessing the tax.
The deceased had been physician. but
he specialized in the taking of X-ray
photographs for medical purposes. He
was one of the pioneers in the use OF
X-ray apparatus in the diagnosis of dis
ease. He invented and perfected many i'm
provements in the mechanical appliances
and chemical processes used in X-ray pho
Biography and acquired great proficiency in
the art. For these reasons and because he
lecttred on tho subfact hosora ,,ap,, NOD