The opinion
HUGHES, Justice
(dissenting in part).
“What is ‘justice’ in the matter of taxation? It is that all property shall bear its just proportion of taxes. In the language of the Constitution that:
“ ‘All property in this state, whether owned by natural persons or by corporations, * * * shall be taxed in proportion to its value.’ Article 8, § 1.
“It is the ‘object’ of our tax laws to carry into effect this constitutional provision, which accords with the dictates of justice.” 1
*323 The “dictates of justice” have been reversed by the majority. No longer shall identical pieces of property hear their just proportion of inheritance taxes or be taxed therefor in proportion to their value. The rule they establish is that the more corporate stock one has the less inheritance taxes, in proportion, one will have to pay.
I cannot subscribe to such tax philosophy even though it has been apparently approved by some Federal courts and the courts of a few other States. There are, however, contrary decisions. 2
On submission of this case I inquired if this “blockage” principle had ever been applied to a herd of cattle or a flock of sheep. The reply was negative so far as counsel knew. Yet it is undeniably true that if all the cattle on the King Ranch were dumped on the San Antonio market on the same day the market could not absorb them without loss.
I doubt if there is any market for herds of cattle or flocks of sheep considered as entities. The evidence here negatives a market for these Humble shares considered as a block. Certainly there is no evidence of similar sales upon which to predicate market value. If there is no market value then resort should be made to “real value” as required by Art. 7130, V.A.C.S.
The adoption of the “blockage” rule would lead to uncertainty, inequity and confusion. Take this case. Humble has 36,000,000 shares of stock of which about 1,400 change hands daily on the stock market. Two stock experts testified, Mr. R. N. Edleman for appellee, Dr. J. C. Dolley for appellant. We quote from Mr. Edleman’s testimony:
“Q. Now, this estate which is a party to this suit, that is, the estate of Calvert Smith, Deceased, as you know, owned 31,350 shares of Humble stock. Based upon your knowledge of that stock over the years and your experience in liquidating large blocks of stock of various types of companies, do you have an opinion as to the effect upon the price of that stock, had the 31,350 shares been marketed in an orderly way over a reasonable period of time following October 14, 1952? I have just asked, Mr. Edleman, if you have an opinion? A. Yes, I would think that the stock would have to be sold at from a five to a ten percent discount, depending on the length of the period.
***** *
“Q. Well, if the 31,350 shares were, had been offered over a period of six months following October 14, 1952, in an orderly liquidation by offering each day some shares in an effort to convert the entire block into cash within six months, what, in your opinion, Mr. Edleman, would have been the average price per share that could have been obtained from that block over that period? A. I would estimate about $60.00 to $62.00 a share. That is assuming that they would add to the daily sales 250 to 350 or 400 shares, which would have been necessary to liquidate it over that period of time.
“Q. That would be between 331/3 and 25% more stock offered per day on the market than was ordinarily offered during the period? A. Well, the average during the period was 1300-and something shares, so it would be in the neighborhood of 25% of the additional stock being offered.
“Q. If that period of time, instead of six months, if the estate had to *324 convert that stock into cash within three months after October 14, 1952, what price per share, in your opinion, could in all reasonable probability have been obtained for the entire block? A. There again, Humble stock has a very thin margin, and the prospective buyer would know it, and I would say it would take a 10% discount to move a block of that size, which would be around the $60.00 a share level.
“Q. That is 10% less than the value on the date of death? A. Yes, sir. .
“Q. Of the $67.00 per share? A. Yes, sir.
“Q. If there had been a period of a year given to liquidate the holdings of this estate, that is, from October 15, 1952 to October 14, 1953, what, in your opinion, would have been the average price per share that you could in all reasonable probability have obtained for the entire block? A. Of course, that would have been the pressure less from day to day, and you probably could have sold the stock for around an average of 63, if you were given a year. That is, of course, provided that you didn’t run into a declining market, which we did during that period. I would have to assume a stable market, which you didn’t have for Humble during that period.”
Dr. Dolley testified:
“Q. This statement shows, as has been stated, the tradings in Humble stock on the American Exchange during the period April 1, ’52 through December 31, ’53. It shows the volume of shares sold on the market during this period. It shows that 36,000,000 shares of stock have been issued and are outstanding, of which some 26,-000,000 are owned by Standard Oil Company of New Jersey, and some approximately 10,000,000 by others. It also shows that the total shares traded during the period covered by the Affidavit is 604,400 shares. Now, in addition, during this period the exhibit gives the price range of Humble stock on a daily basis, with figures which show the opening price, the high, the low, closing price and the volume traded per day through the period. Now, since you have already studied these figures, Dr. Dolley, in view of the figures contained in this exhibit, and assuming that these figures are true and correct, in your opinion, would it have been possible for 31,350 shares of stock to have been marketed within a year, without depressing the price? A. If that stock had been marketed in what is called an orderly manner, which would mean, I think, in from 100 to 500 shares, at slightly irregular intervals, I think the sales would have had a neglible effect upon the market price of that day.
“Q. I wonder if you could go further and say that the same would be true had the stock been marketed within a six-months period? A. I think so. I think the same statement would hold.”
What is a reasonable time within which to market stock? The trial court and the majority apparently accept one year as such period since the $63 value made by Mr. Edleman is on that basis. Is this correct?
What is a block of stock? We learn from this decision that 31,350 shares of Humble stock is a block. How about 30,000 shares ? If 30,000 shares is not a block then their market value (30,000 x $67) should be taxed and the “blockage” value applied to 1,350 shares only. If one share of stock is conceded not to constitute a block, as surely it must be, then I would tax that one share at its true market value of $67.00 regardless of the value given the remaining shares of the block. Unless one share of Humble stock constitutes a block then *325 the majority opinion permits that one share to escape its just tax burden.
We have two expert witnesses here, both eminently qualified, yet they reach opposite conclusions from the same hypothetical facts. McCormick and Ray in their Texas Law of Evidence, 2d Ed., Sec. 1405, say:
“The fact that practically all expert evidence comes from a biased source has generated a general distrust of it.”
Why in view of difficult problems the “blockage” rule presents should we abandon the simple, fair, non-discriminatory method of evaluating corporate stocks, one or a millón, and adopt one which leaves the State at the mercy of experts who speculate about the effects of sales never made nor contemplated.
I would reverse and render the judgment below in its entirety and therefore respectfully dissent in part from the majority opinion.
. Judge Jenkins for this Court in Von Rosenberg v. Lovett, Tex.Civ.App., 173 S.W. 508, 513 , writ refused. See also Sheppard v. Hidalgo County, 126 Tex. *323 550 , 83 S.W.2d 649 . I recognize that our inheritance tax is a privilege and not an ad valorem tax and hence is not controlled by equal and uniform requirement of Art. 8, Sec. 1 of our Constitution, Vernon’s Ann.St. State v. Hogg, 123 Tex. 568 , 72 S.W.2d 593 .
. State v. Wagner, 1951, 233 Minn. 241 , 46 N.W.2d 676 , 23 A.L.R.2d 762 ; Florida National Bank v. Simpson, Fla., 59 So.2d 751 , 33 A.L.R.2d 581 .