State Board of Equalization v. Kansas-Nebraska Natural Gas Co. , 1971 Wyo. LEXIS 272 ( 1971 )

Mr. Justice PARKER

delivered the opinion of the court.

This case was originally before us in State Board of Equalization v. Kansas-Nebraska Natural Gas Company, Wyo., 457 P. 2d 963, the board there having appealed from the holding of the district court that its tax assessment upon Kansas-Nebraska for materials and supplies used for an absorption plant was invalid. This court after observing that in the light of the parties’ concessions and contentions the issue was narrow, i. e., Did primary purpose control the exemption, and if so, what was the primary purpose of the absorption plant, instructed the trial court to return the proceeding to the board for the purpose of making findings of fact and conclusions of law or, if the board so determined, for rehearing, 457 P.2d at 965. After the return of the matter to the board, Kansas-Nebraska petitioned for reconsideration so that it could have a hearing on the “issue” delineated by this court, but the board denied its request, indicating that testimony had been presented theretofore as to the purpose or purposes of the plant as well as argument on the matter of legal effect of primary purpose. Following further consideration of the previous testimony, evidence, and record, the board made findings and in its conclusions stated:

“That the absorption plant * * * was constructed for the purpose of bringing the natural gas within the specifications required by Kansas-Nebraska Natural Gas Company, Inc. for distribution and use by its ultimate consumers, and that any benefits to the interstate transportation of the natural gas necessarily and incidentally followed therefrom.

“That the materials and supplies used and consumed in the construction of the absorption plant * * * were not used or to be used in operating or maintaining interstate transportation, and were not therefore exempt from use tax by virtue of Section 39-312(b), Wyoming Statutes 1957 [providing for exemption from use tax of property “which is used or to be used in operating or maintaining interstate transportation”].”

Accordingly, relief was again denied to Kansas-Nebraska and appeal was taken to the district court, which inter alia found that the board’s order was not in conformity with law, that the conclusions were not supported by any specific findings or substantial evidence, and that the decision was arbitrary and characterized by abuse of discretion. The court vacated and set aside the board’s order, instructing it to refund the tax paid by Kansas-Nebraska. This appeal has resulted, it being the position of the board that the district court erred in its findings and in substituting its judgment on the evidence for that of the board.

The board now agrees that the legal doctrine of “primary use” is not properly applicable to the instant case since that doctrine comes into play only in situations where there is more than one distinct and independent use,¹ although admitting that its reasoning here is obviously similar in most respects to that of the primary use doctrine because the basic, primary reason or purpose for using the property in a certain manner controls rather than an incidental, dependent, and unavoidable result of such use,² and there is no indication that the Wyoming legislature intended by § 39-312(b) to include for exemption the use of any property other than the actual implements of transportation plus property which has the basic function of keeping such implements of transportation in operation.

Kansas-Nebraska responds that § 8-18, W.S.1957, provides that words and phrases “shall be taken in their plain or ordinary and usual sense,” and hence when § 39-312 (b) says “Property * * * which is used or to be used in operating or maintaining interstate transportation” shall be exempt from the tax, without qualifying or limiting words (such as those found in § 39-7, W.S.1957 (1971 Cum.Supp.) ), it could only have intended that property so used not be taxed even though also used for some other purpose. The company further points out that Ohio is the only jurisdiction in which the doctrine of primary purpose has been applied in sales, use, or excise tax cases.

Detailed analysis of the board’s comprehensive arguments as to reasons the trial court should be reversed is not warranted since even were we to accept the board’s thesis, there is no reasonable basis in the record for a holding that benefits to the interstate transportation of the natural gas were merely incidental.

At the hearing before the board, three witnesses had appeared, all officers of the company, and testified in detail as to the whys of building the absorption plant. They clearly delineated the damage by sulphur to the pipeline and associated equipment as well as the dangers of the presence of liquids in low spots of the pipeline. It was also patent that it was the desire of the company to provide a more satisfactory gas for consumer consumption than had previously been provided. The present findings of the board implicitly, and the argument of its counsel now before us specifically, indicate that when these witnesses testified the plant to have been necessary so that the gas could be both economically and safely transported the board considered that portion of their testimony “not creditable” and not “worthy of adoption,” but nevertheless based its findings and conclusions on other portions of these same witnesses’ testimony. Under the situation here such was improper. The rule that the credibility of witnesses is for the trier of fact does not mean that such trier may under the guise of passing upon the credibility of a witness disregard his testimony when from no reasonable point of view is it open to doubt. Chesapeake & Ohio Railway Company v. Martin, 283 U.S. 209, 51 S.Ct. 453, 75 L.Ed. 983, 988; 58 Am.Jur. Witnesses § 864. In this area of the law the circumstances are so varied as not to admit of absolute pronouncements except as applied to a particular matter at hand and especially is this true when reviewing courts resolve appeals from an administrative agency. Dickinson v. United States, 346 U.S. 389, 396, 74 S.Ct. 152, 98 L.Ed. 132; National Labor Relations Board v. Walton Manufacturing Co., 369 U.S. 404, 408, 82 S.Ct. 853, 7 L.Ed.2d 829; Davis, Administrative Law Treatise, § 29.06 (1970 Supp.). Even so, we find in the present record no valid basis for the board’s rejecting a portion of the uncontradicted and unimpeached evidence presented by the company officials when other portions of their evidence were accepted and utilized as a foundation for the order. We are, therefore, constrained to agree with the trial court that the decision of the board was arbitrary in its failure to make findings and consider the evidence before it relating to the use of the plant in interstate transportation without explanation or expressed reason.

Affirmed.

1 . Michigan Allied Dairy Ass’n v. Auditor General, 302 Mich. 643, 5 N.W.2d 516, and Bruce Motor Freight, Inc., v. Lauterbach, 247 Iowa 956, 77 N.W.2d 613, are eited as illustrations.

2 . Respondent cites various Ohio cases, including Mead Corporation v. Glander, 153 Ohio St. 539, 93 N.E.2d 19.