55 S.W.2d 416 | Ky. Ct. App. | 1932
Reversing.
The American Barge Line Company was incorporated in the state of Delaware. Its business consisted in the transportation of heavy freight by barges on the waters of the Mississippi and Ohio rivers. The barges and the steamers by which they were towed were owned by the company. They moved from place to place, as business required, along the navigable waters from the vicinity of Pittsburgh to New Orleans. As compensation for services rendered in the transportation of freight, the company had on its books uncollected accounts against its customers. The value of the boats and barges owned on July 1, 1928, was $250,000, and the face value of the open accounts was $30,000. The company had offices in Pittsburgh, Cincinnati, Louisville, Memphis, New Orleans, and Chicago. All the business was cleared or accounted for through the Louisville office in charge of a vice president, and payment of bills due it were received, but not kept, there. Louisville was the place where the business was principally managed, and may be regarded as the chief executive office of the company. But the character of the business was such that the other offices had important functions to perform. The property consisted of boats, barges, and accounts receivable, arising from the services rendered by the boats and barges, and originating from the territory *575 where the various offices were maintained. The board of tax supervisors of Jefferson county assessed all the property for taxation upon the values already stated. The assessment was affirmed on appeal to the quarterly court, and again on appeal to the circuit court. The company has prosecuted an appeal to this court, insisting that the property is not taxable in Kentucky.
The theory of the commonwealth is that the actual, as distinguished from the corporate, domicile, is in Louisville, Jefferson county, because the business of the corporation is mainly managed and conducted from that point; and that as a consequence all of its personal property, tangible and intangible, which has not acquired a situs elsewhere, is taxable in Jefferson county, Ky. Notwithstanding the power of a state to fix within its borders the place where the property of a corporation shall be taxed, the domicile of a corporation is in the state where it was incorporated, and it has no power to migrate. 1 Thompson on Cor. (2d Ed.) sec. 490 et seq.; 1 Cook on Cor. 2d sec. 1; 1 Cyclopedia of Corporations, 9293; Newport Cin. Clark Marshall, Private Cor. sec. 114; 8 Fletcher, Bridge Co. v. Woolley,
The commonwealth planted its claim solely on the supposed change of domicile from Delaware to Louisville, and sought to apply the mobilia maxim by taxing the boats and barges at the assumed domicile in Louisville instead of at the corporate domicile in Delaware. But since the domicile of the corporation was not changed, the whole theory of the commonwealth falls to the ground. Ayer Lord Tie Co. v. Keown, Sheriff,
In the case of Beidler v. S.C. Tax Commission,
"But a conclusion that debts have thus acquired a business situs must have evidence to support it, and it is our province to inquire whether there is such evidence when the inquiry is essential to the enforcement of a right suitably asserted under the federal Constitution.
"In the present case, beyond the mere fact of stock ownership and the existence of the indebtedness, there is no evidence whatever, having any bearing upon the question, save a copy of the decedent's account with the corporation, taken from his books which were kept by him in his office at Chicago. The various items of debit and credit in this account, in the absence of any further evidence, add nothing of substance to the fact of the indebtedness as set forth in the agreed statement and afford no adequate basis for a finding that the indebtedness had a business situs in South Carolina."
In the present case it appears simply that the appellant had accounts against various customers which appeared upon its books on the assessment date. The domicile of the debtors, or the place where the credits were earned, are not shown, and nothing appears to localize the accounts. The absence of evidence to bring the accounts receivable within the purview of the cases which sustain taxation on the basis of a business situs is fatal to any argument predicated upon the assumption of such a situs.
Summarizing our conclusions, it must be held that the domicile of the corporation is in the state of Delaware where it was incorporated. Its personal property did not acquire a business situs in Kentucky. It operated boats and barges over a large territory upon navigable waters, transporting by contract the property of its customers. Its charges for the services were entered upon its books as open accounts, to be collected in due course and used in the business. It is not shown *579 when or where the boats and barges were in Kentucky or that they had acquired any particular habitation apart from the owners' domicile. The idea of location in Kentucky is rebutted by the nature of the business and the domain of its operations. In such situation neither the tangible property nor the open accounts were within the jurisdiction of the state, or subject to its power of taxation.
The judgment is reversed, for proceedings not inconsistent with the opinion.
Whole court sitting.