A. Definition of a patent. Commonwealth ex. rel. Luckett, Comr. of Rev. v. Radio Corp. of America, 299 Ky. 44, 184 S.W.2d 250; Hildreth v. Thibodeau, 186 Mass. 83, 71 N.E. 111; Horne v. Green, 52 Miss. 452; Ranier Brewing Co. v. McColgan, 94 Cal.App.2d 118, 210 P.2d 233; 40 Am. Jur., Patents, Sec. 4 p. 534; 51 Am. Jur., Taxation, Sec. 441 p. 457; 69 C.J.S., Patents, Sec. 6 p. 176; Walker on Patents (6th ed.), p. 18.
John E. Stone, Asst. Atty. Gen., Jackson, for appellant. I. Appellee's business is located within the State of Mississippi. Altantic Coast Line R. v. Commonwealth, 302 Ky. 36, 103 S.W.2d 749; Commonwealth ex rel. Luckett, Comr. of Rev., v. Radio Corporation of America, 299 Ky. 44, 184 S.W.2d 250; Kantor Son v. Stone, 203 Miss. 260, 34 So.2d 492; Pergl v. U.S. Axle Co., 50 N.E.2d 115; Stone v. General Contract Purchase Corp., 193 Miss. 301, 7 So.2d 806; Village of Axtell v. Nebraska Hdw. Municipal Ins. Co., 7 N.W.2d 471; Secs. 10104, 10111, Code 1942. II. Renting or lease of tangible personal property.
( Nelson v. Ferguson, 56 F.2d 121 (Cert. den., 286 U.S. 565 [52 S.Ct. 646, 76 L.Ed. 1297]); Sunnen v. Commissioner I.R., 161 F.2d 171 [reversed on other grounds, 333 U.S. 591, 92 L.Ed. 898, 901; Hazeltine Corp. v. McColgan [Sacramento County Superior Court, No. 63171; opinion attached to brief]; Kentucky ex rel. Luckett v. Radio Corp. of America, 299 Ky. 44 [ 184 S.W.2d 250].) In the Hazeltine case, supra, in which, pursuant to the principle of the application of the doctrine of mobilia sequuntur personam announced in Farmers Loan Trust Co. v. State of Minnesota, 280 U.S. 204 [50 S.Ct. 98, 74 L.Ed. 371], the learned judge of the superior court in California determined that the situs of the income received was in the State of New Jersey, and therefore that the proceeds from the contract were not taxable in the State of California.
Its classification as such finds foundation in Bigelow v. Reeves, Commissioner, 285 Ky. 831, 149 S.W.2d 499. Such application would justify a conclusion that it is violative of the exempting and uniformity of taxation provisions of Sees. 170-172, Constitution, Kesserling v. Bonnycastle Club, 299 Ky. 585, 186 S.W.2d 402. Appellant cites as authority for the proposition that where the source of income "is a contract chiefly negotiated and executed outside Kentucky, such income is not allocable to Kentucky for the purpose of computing taxpayers net income," Commonwealth v. Radio Corporation of America, 299 Ky. 44, 184 S.W.2d 250; Atlantic Coast Line R. R. v. Commonwealth, 302 Ky. 36, 193 S.W.2d 749; Kentucky Tax Comm. v. Fourth Avenue Amusement Co., 293 Ky. 668, 170 S.W.2d 42, and cases from foreign jurisdictions. The latter do not appear applicable, and the Kentucky cases are distinguishable.
Capital employed in the transaction of business is distinguishable from a mere independent investment. Cooley, Taxation, Secs. 904, 919. If no part of the property or capital is taxable in Kentucky, the income therefrom is not taxable. Commonwealth v. Radio Corporation of America, 299 Ky. 44, 184 S.W.2d 250. The source of the dividend is the stock owned, and none of the stock in the present case is subject to ad valorem taxation in Kentucky. As intangible property it has had its taxable situs at the domicile of the beneficial owner, outside Kentucky.
31. Idaho Code, §§ 63-3038, 63-3039, 63-3040, 63-3041, 41-804, 41-806; Section 1, Fourteenth Amendment to the Constitution of the United States; Breckenridge v. Johnston, 62 Idaho 121, 108 P.2d 833; Ada County v. Bottolfsen, 61 Idaho 363, 102 P.2d 287; State v. Taylor, 58 Idaho 656, 78 P.2d 125; State v. Jones, 34 Idaho 83, 199 P. 645; Oregon Short Line R. Co. v. Minidoka County School Dist., 28 Idaho 214, 153 P. 424; State ex rel. Manitowoc Gas Co. v. Wisc. Tax Comm., 161 Wis. 111, 152 N.W. 848; Davis v. Penn Mutual Life Ins. Co., 198 Ga. 550, 32 S.E.2d 180, 160 A.L.R. 778, certiorari denied 331 U.S. 829, 67 S.Ct. 1353, 91 L.Ed. 1844; Newport Co. v. Wisconsin Tax Comm., 219 Wis. 293, 261 N.W. 884, 100 A.L.R. 1204, certiorari denied 297 U.S. 720, 56 S.Ct. 598, 80 L.Ed. 1004; Miller v. McColgan, 17 Cal.2d 432, 110 P.2d 419, 134 A.L.R. 1424; Atlantic Coastline R. Co. v. Commonwealth, 302 Ky. 36, 193 S.W.2d 749; Cleveland, P. A.R. Co. v. Com. of Pennsylvania, 15 Wall. 300, 21 L.Ed. 179; Commonwealth ex rel. Luckett, v. Radio Corp., 299 Ky. 44, 184 S.W.2d 250; Rainier Brewing Co. v. McColgan, 94 Cal.App.2d 118, 210 P.2d 233; Virginia-Carolina Chemical Co. v. Commonwealth, 302 Ky. 173, 194 S.W.2d 180; Commonwealth v. Mundy Corporation, 346 Pa. 482, 30 A.2d 878; Newark Fire Insurance Co. v. State Board of Tax Appeals, 307 U.S. 313, 616, 59 S.Ct. 918, 83 L.Ed. 1312; Suttles v. Owens-Illinois Glass Co., 206 Ga. 849, 59 S.E.2d 392; Redwine v. Dan River Mills, Inc., 207 Ga. 381, 61 S.E.2d 771; Davis v. Penn Mutual Life Ins. Co., 201 Ga. 821, 41 S.E.2d 406; Williams v. American Refrigerator Transit Co., 91 Ga. App. 522, 86 S.E.2d 336; Curry v. McCanless, 307 U.S. 357, 59 S.Ct. 900, 83 L.Ed. 1339; Stone v. Stapling Machines Co., 220 Miss. 470, 71 So.2d 205; Crane Co. v. City Council of Des Moines, 208 Iowa 164, 225 N.W. 344, 76 A.L.R. 801; Diefendorf v. Gallet, 51 Idaho 619, 10 P.2d 307; State ex rel. Haworth v. Berntsen, 68 Idaho 539, 200 P.2d 1007. Statutes should be construed in the light of court decisions existing at the time of their enac
While the presence of its leased cars in the state may possibly subject them to ad valorem taxation, Reeves v. Island Creek Fuel Transportation Co., 313 Ky. 400, 230 S.W.2d 924, it is not their presence here but the contract or lease, negotiated and executed in the State of Missouri, which is the source of the appellee's income, and neither that instrument nor its owner is located in this state. If the appellee were forced to sue any of the lessee railroads or their connecting carriers for the use of the cars, the basis of the action would be the leasing contract and the tariff regulations, and the mileage traversed by the cars in the various states would be only evidence tending to establish the amounts due under the leasing contract and would not be the basis of the action itself. For analogous reasoning, see Commonwealth ex rel. Luckett v. Radio Corporation of America, 299 Ky. 44, 184 S.W.2d 250, at page 252. Viewing the leasing contract, which was negotiated and executed in the State of Missouri, as the source of the income, we are forced to the conclusion that it is not subject to Kentucky income taxation for the taxation proposed has "no relation to a subject within the taxing government," Louisville Jeffersonville Ferry Co. v. Commonwealth of Kentucky, 188 U.S. 385, at page 396, 23 S.Ct. 463, 47 L.Ed. 513. Cf. Pacific Fruit Express Co. v. Oklahoma Tax Commission, D.C., 27 F. Supp. 279; Pauline Oil Gas Co. v. Mutual Tank Line Oil Co., 118 Okl. 111, 246 P. 851; State v. American Refrigerator Transit Co., 151 Ark. 581, 237 S.W. 78; Union Tank Line Co. v. Day, 143 La. 771, 79 So. 334; T.W. Williams, etc. v. American Refrigerator Transit Co., 91 Ga. App. 522, 86 S.E.2d 336.