Court Opinion

ID: 4474735
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:07.328634+00
Date Added: 2024-06-11T15:02:41.022168
License: Public Domain

Disney, J., dissenting: I can not agree with the majority opinion in so far as it recognizes good will as a factor in a sale by a certified public accountant of his business. It seems well established by the books that no good will grows out of personal efforts and ability. Thus, in In re Martin's Estate, 33 N. Y. S. (2d) 81, the estate of an attorney was suing for value of good will and it was held there was none. In Magee v. Pope, 112 S. W. (2d) 891, it was likewise so held in the case of a physician. In Master v. Brooks, 117 N. Y. S. 585, it was held that there was no good will as to the business of a revenue attorney. It is true, of course, that some people will go back to a place of business even after the death of the principal figure there, merely for lack of any idea of where else to go and out of habit, but any such tendency seems so rare and of such small importance, in'the case of a professional man, as not to be recognizable as vendible good will. Moreover, if a man’s business is such that he must take an examination set by the state, there would appear to be public policy against his transmitting “good will” growing out of his abilities, to any degree which should be recognized for tax purposes. Aaron Michaels, 12 T. C. 17, as to laundry business, is not to the contrary, and the Toledo Blade Co., 11 T. C. 1079, of course involved a newspaper business, as did Toledo Newspaper Go., 2 T. C. 794, so that they offer no logical help on this question. In E. C. O'Rear, 28 B. T. A. 698, we said that a lawyer did not have capital gain in receiving, when he formed a partnership with two other attorneys, an amount “due to the conceded excess value of good will and unearned fees of said O’Rear put into the firm” over what the other attorneys put in. We said that the attorney’s reputation as an able lawyer attached to his person; he could not transfer it. We recognized this rule in D. K. MacDonald, 3 T. C. 720. I would adhere to it. I therefore respectfully dissent. Hill and TubneR, JJ., agree with this dissent.