Moffett Estate

Opinion by

Me. Justice Allen M. Stearne,

The appeals are from an appraisement and assessment of transfer inheritance tax under the Act of June 20, 1919, P. L. 521, as amended, 72 PS section 2301 et seq. The tax is imposed upon “the transfer of any property, real or personal, or of any interest therein or income therefrom in trust or otherwise. . . .” Section 2 of the Act, supra, specifies the rates and how the tax shall be imposed, viz.: upon the clear value of the property subject to the tax. The dispute is how the “clear value” of closely .held corporate common stock is to be determined, viz.: market, book or intrinsic value.

■ Ruth Beers Moffett, the testatrix, at her death on August 18, 1947, owned 1666 shares of the common capital stock of a corporation, incorporated to hold and manage the estate of Henry I. Beers. The shares of the corporation (of which the present stock was part) were issued to members of the Henry I. Beers family who were beneficiaries under his will. Ruth Beers Moffett, the present decedent, was a beneficiary and an incorporator.

The appraiser for the Commonwealth appraised the 1666 shares of the Henry I. Beers Corporation, com*162mon, at $50 per share, or $83,300, upon which a tax was assessed (together with other estate assets) at 2%. The booh value per share was stipulated as $58.29. Appellants in support of their contention that the appraisement was excessive and should not have been over $25 per share, offered testimony that after testatrix’s death, the executor sold 200 shares in 1947 at $23.50; 35 shares in 1948 at $25 and 833 shares in 1949 at $24.50. These shares were sold to the corporation itself. No shares were issued by the corporation except to members of the Beers family and none are now held by others.

It is argued by appellants that the above sales at $25 per share (highest price actually received) must be accepted as establishing the marhet value, which therefore constitutes their clear value. There was also testimony concerning earnings and dividends as well as the opinion of expert witnesses that $25, the market price, was the “clear value” of such shares.

The .Commonwealth’s appraiser testified that in appraising the stock at $50 per share, he did so under the following considerations: “On a basis of a study of the assets in the corporation, the type of corporation, the dividends, the earnings, the type of market for the stock, and other various factors concerned.”

As the Act imposes the tax “upon the clear value of the property subject to such tax”, (72 PS section 2302, p. 74) we have been required to define “clear value." According to the definition of “value” in Webster’s New International Dictionary 2d Ed., Unabridged, it is: “monetary worth of a thing; marketable price; Estimated or assessed Avorth.” “Clear” is therein defined: Free from burden, limitation, etc.; as: Free from charges, etc.; net; as, clear profit.

“Clear value” of such taxable property is, therefore, its estimated net worth. It is manifest that such net worth cannot, in every case, be measured by either *163market or book value. In some cases, however, in varying circumstances, either market or book value of property may be its net worth. A stock freely sold on the stock exchange might well have its worth established in such market. But where, as here, stock is closely held and represents but a minority interest, and is rarely sold, (and when sold perhaps under necessity or pressing circumstances) such sales do not fairly establish a true market value. Neither do book values, earnings or dividends alone establish such worth. On corporate books a valuable asset may be listed at a nominal figure. On liquidation or sale of corporate assets, such an asset may realize a large price, not adequately reflected in book value. While earnings and dividends play an important part in determining the worth of a stock, yet this alone is not controlling. This depends upon the financial policy of the corporate management as to what is charged to net earnings and what dividends and the amount thereof are paid to stockholders. All of these elements must be taken into consideration in fixing “clear value.”

This Court decided in McLure Appeal, 347 Pa. 481, 32 A. 2d 885, that the determination of “clear value” is a factual question. Justice Linn said, p. 482: “The clear value of the property was matter of fact. Evidence of probative force in determining the value was relevant and admissible [citing cases].” In that case the executors were required, by decedent’s contract, to sell at a named price, which they therefore contended constituted clear value. This argument was rejected. The court below found in that case that the booh value constituted its “clear value.” Among the elements considered in fixing the clear value was the corporation’s franchise tax report; that the stock was unlisted, was closely held and there were no sales on the market. The tax appraisers and the court fixed the value at $75 *164per share against the opinion evidence of two experts; one that the value was $25.11 and the other $22.80 per share. Justice Linn said, p. 484: “. .. it must be conceded that if the learned judge was persuaded by other evidence in the case to reject these opinions and to rely on the evidence of higher valuations, familiar rules require that his conclusions must be accepted.”

The learned hearing judge below made an analysis of the evidence respecting the value of the corporate assets and their composition, which need not be recited herein. He found, as matter of fact, that the appraisement and assessment of the stock at $50 per share was its “clear value.” Such finding must therefore be accepted.

Appellants’ argument that if the present assessment is affirmed the federal estate tax will be increased is clearly without, merit. Such consideration has no place in determining the “clear value” of a taxable asset for State Transfer Inheritance Tax-purposes.

The executor of this estate in Appeal No. 159 is a proper appellant from the appraisement and assessment of personal property for transfer inheritance tax. Cf. Hunter’s Common Place Book, Sec. 6 (a), Vol. 1, p. 613; Noel’s Estate, 42 D. & C. 614. See also Act of July 15, 1935, P. L. 1028, as amended by the Act of May 27, 1943, P. L. 757, sec. 3, 72 PS 2327. Beneficiary, Marion Moffett Barnes, in Appeal No. 158, is likewise a proper appellant. But the Henry I. Beers Corporation, in Appeal No. 160, is not “a person in interest” in this tax appeal, and possesses no status as appellant.

Decree of appraisement and assessment is affirmed. The appeals are dismissed. Each appellant to pay his own costs.