Court Opinion

ID: 3307493
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:21:49.757074+00
Date Added: 2024-06-11T12:34:20.710706
License: Public Domain

I agree with Justice McFarland that the mere franchise to be a banking corporation is not susceptible of valuation according to the criterion of value established by the statute. (Pol. Code, sec. 3617, subd. 5.) It is not transferable or vendible any more than a broker's seat in the stock and exchange board; and unless we are prepared to overrule the decision in San Francisco v.Anderson, 103 Cal. 70,1 and at the same time to pronounce the code definition of value unconstitutional, I cannot see how the judgment in this case can be affirmed. The invalidity of the assessment of appellant's franchise is to my mind much clearer than that of the broker's seat, for it was made to appear in the case cited that the privileges attaching to a seat in the stock board were of considerable pecuniary value to the member, whereas there is nothing to show that the right to conduct the banking business is of any greater value to a corporation than to a copartnership, and in case of a partnership it is not regarded as having any value whatever. The truth is, that when, as in this case, a valuation of a franchise of a banking or trading corporation is made by taking the whole or a part of the difference between the market value of its shares and the value of its tangible assets, such valuation necessarily includes, and is mainly, if not wholly, composed of, the value of the good-will of the business, and the franchise has little or nothing to do with it. Whether the goodwill of a business is subject to taxation or not is a question *Page 292 
never decided by this court; but conceding it to be property liable to taxation, I am clear that it should be assessed eonomine, and assessed equally to all persons, natural and artificial. If it be true, as contended by appellant, that good-will is never assessed to natural persons, it is an unjust discrimination to assess it to corporations merely because the market price of their shares affords a means of estimating its value. Upon the grounds thus briefly indicated, I dissent from the judgment.
Rehearing denied.
Beatty, C.J., McFarland, J., and Henshaw, J., dissented from the order denying a rehearing.
1 42 Am. St. Rep. 98.