the Rolls, in Mellersh v. Keen, 28 Beav. 453-455, 54 Eng. Reprint, 440-441, when he said:
“The difficulty of ascertaining the value of the good will of a business is very great; it is of a shadowy character, and a very slight thing will increase or diminish its value. I have no doubt that the evidence of the eight or nine bankers, who have said that it was worth nothing, may be perfectly true, in one sense, that nothing could have been more easy than to have sold in such a way that nobody would have given a penny for it. But the court is bound to look at it in this point of view: What would it have produced, if it had been sold in the most advantageous manner and under such circumstances that it would have produced the largest sum for all the parties interested ?”
Follett, in the instant case, testified that the business was worth a great deal more than the selling value of the visible property. But the record does not afford a reliable, direct indication of the value. It presents, however, strong circumstantial proof that it had a very substantial value. Among these circumstances we may mention the following: The business was successful and prosperous from the beginning, paying a dividend the first year of 8 per cent. Dividends were paid every year, increasing in amount during the later years. The capital stock was increased from time to time until it reached $250,000. All, or nearly all, this increased capital was paid in from profits through stock dividends. During the later years the corporation had shown ability to earn better than 25 per cent. upon its entire capitalization. For the last seven years prior to January 1, 1918, the net earnings averaged 25 per cent., and for the last five years of the period over 26 per cent. of the capital. The business also showed a steady increase in volume, partly due, no doubt, to the advancing price level; but a well-organized business such as this is able to maintain a fairly certain ratio of net profit on the gross volume of business done. On the whole record, we are impressed that the business was built upon a substantial foundation, and that it possessed such elements of stability as would impart great value to it as a going concern.
The law recognizes certain standards by which to determine the value of the good will as a matter of fact, which standards vary with the elements tending to reflect stability or the lack of it. These will be found discussed and applied in the following cases: In re Silkman, supra; Mellersh v. Keen, supra; Von Au v. Magenheimer et al., 115
