Burlington Northern Railroad v. Wyoming State Board of Equalization
820 P.2d 993
Wyo.
1991
Check Treatment

*1 993 (Wyo.1985); disclaim- P.2d requirements for effective Miller v. Mil- tional ler, satisfy (Wyo.1983). future 664 P.2d It If Mobil should is clear er. requirements, can it assume that this from the disclaimer that Mobil in- these never give effect to its disclaimer—or tended make a contract. There was court will employee meeting its hand- never a of the minds nor was should Mobil eliminate only Perhaps the answer will come a valid consideration. There was no con- book? litigation. why tract. That is with more this court McDonald upon I rested its decision to reverse I, In McDonald the court reversed sum- promissory estoppel. doctrine of I would promissory mary judgment on the basis of affirm the decision of the trial court. estoppel. Despite disclaimer in the handbook, the court said McDonald could if he could demonstrate that it was

recover rely upon promises

reasonable to con-

tained in the handbook and if enforcement promises only way was the to avoid injustice. 789 P.2d at 870. The court

held that no contract was formed because meeting

there was no of the minds form- BURLINGTON NORTHERN RAILROAD ing citing a contract. at Id. Anderson COMPANY, Appellant (Petitioner), Excavating Wrecking Co. v. Certified v. Corp., (Wyo.1988). P.2d Welding WYOMING STATE BOARD OF Now, opinion upon rehearing, in this EQUALIZATION, Appellee rely court holds that if it was reasonable to (Respondent). handbook, upon promises in the then a opinion contract was formed. This states a No. 90-104. is formed contract “outward manifesta- Court of party’s

tions of a assent sufficient to create party.” reasonable reliance the other Nov. language is similar to the definition of I, promise in a McDonald wherein the promise

court said a

“a manifestation of intention to act or acting specified way,

refrain from a so justify promisee in

made as to a under-

standing commitment has been 870, quoting

made.” 789 P.2d at Re-

statement, Second, (1981). Contracts § promise is not a contract. But this court says making promise

now of a alone

reasonably upon by relied another creates

an enforceable contract.

It is said that whether a contract was depends upon

entered into the intention of parties. 17A Am.Jur.2d Contracts § exist, For a valid contract

meeting necessary of the minds is concern- agreement, parties the terms of the contract, have intended to and the

must supported by must be considera-

contract Excavating,

tion. Anderson 769 P.2d at

889; Through Farmers United States Redland,

Home Administration

Burlington Northern was an interstate utilizing railroad and carrier locomotives substantially used inter- cars which were Burlington All Northern state commerce. Guernsey, through which traveled trains inspected. inspec- Wyoming, If the were assembly needed to tion revealed a wheel assembly re- repaired, the wheel was be Sundahl, Godfrey & John A. Sundahl car, shipped to from the railroad moved Cheyenne, appellant. Havelock, Nebraska, for new and rebuilt parts. Burlington pur- or used Northern Gen., Joseph Meyer, Atty. and Michael B. from manufacturers chased Gen., Hubbard, appel- Atty. L. Asst. Sr. tax ex- in states which had sales and use lee. emptions parts. for such These new until received and stored Havelock were THOMAS, CARDINE, MACY Before repair they were used to the wheel LANGDON, GOLDEN, JJ., and and The were repaired blies. wheel assemblies Judge. District Guernsey placed returned to and on manpower avail- cars as soon as the was OPINION able to do so. MACY, Justice. 21, 1987, Wyoming De- On October appeal affirming This is from an order issued partment of Revenue and Taxation Equali- Appellee Wyoming State Board of totaling deficiency two tax assessments impose tax zation’s a use as- decision $735,106.90 Burlington Bur- Northern. by Wyoming Department of sessed $315,369.67 chal- lington paid Northern but Appellant against Revenue and Taxation contending lenged remaining portion, exempt Northern from was upon component parts of stock, repair parts use tax on placed on its railroad cars appealed Equalization.1 and to the Board of Equalization After the held a Board We reverse. hearing, August it issued its decision on by propounded appeal Bur- issues on tax assess- which reduced lington are: ments on the assemblies attributable imposed by 1. Whether use tax labor, overhead, and materi- secondhand Wyoming on refurbished wheel assem- tax, als otherwise affirmed the use but railroads blies installed on interstate finding: after four-prong meets the test of herein, particular facts [UJnder Inc., Brady, 430 U.S. jurisdiction is a taxable event within the 274? thus, of the State of 2. is a and the If there taxable event imposition of use tax on the due, exempt tax is the tax otherwise Guernsey, Wyoming, facility is at the 39-6-505(a)(x) (1977), by virtue of W.S. appropriate. known as the stock” otherwise exemption[?] 39-6-505(a)(x) Wyo.Stat. (Supp.1987) pro- inter- of valid United States are holders § aeronau- vided: state commerce commission or civil permits or authorities or which are (a) tics board following purchases or leases operating ex- interstate commerce under exempt by imposed the excise tax from emption federal are to clauses in law if article: substantially com- be used interstate (x) Rolling including merce!.] locomotives railroads, (Amended Wyo.Sess.Laws purchased pur- by ch. by § aircraft 15, 1988, Wyo.Sess. effective March chased interstate air carriers and trucks 9, 1991.) purchased by Laws ch. 1 effective March § interstate carriers trailers exemption provided by plementary W.S. sales tax.

... [T]he 39-6-505(a)(x) inapplicable, Co., and the im- Morrison-Knudson Inc. v. State use tax on the new items is position of 500, 135 Equalization, Wyo. Board Any amounts attributable how- proper. IV, Chap. P.2d See also *3 labor, overhead, and secondhand ever to 3, Regulations Wyo Rules and § not be assessed. should ming State Tax Depart Commission— ment of Revenue & Taxation. The 5, 1989, use Burlington North- September On applied purchased is petition property in the tax to out ern filed its review dis- 20, 1990, brought trict court. On March the district side the state and into the state Equalization’s court affirmed the Board of storage, consumption, use so as to decision. It is from that order that this put property equal footing on an appeal is taken. property purchased with within the state subject Wyoming that is sales tax.

Burlington Northern contends the Board Equalization’s application of the relevant The rule referred to administrative this undisputed law to the facts was incorrect. Court, i.e., IV, Chapter provided: Section appeal though We will review the as it purchase tangible The or lease of all directly Equaliza from came the Board of personal property this outside state for tion, determine, compliance in we will use, storage consumption within 16-3-114(c)(ii)(A) Wyo.Stat. (Supp. § state, tax, subject providing is to use 1982), whether the decision was in accord subject the same transaction would be ance with the law of this state. Exxon sales tax if the transaction had occurred Corporation Wyoming v. State Board of wholly within the State of Equalization, (Wyo.1989), 783 P.2d 685 — denied, U.S. -, cert. S.Ct. Corporation, 783 P.2d at Exxon 688 n. (1990); Department 109 L.Ed.2d 300 that, (emphasis original). in We also stated Wyo Revenue and Taxation State property “if the first use of the occurs in Club, Casper ming Legion Baseball state, Wyoming’s inap- another use tax is Inc., (Wyo.1989). 767 P.2d 608 plicable.” 688. Id. at Corporation, up- In Exxon this Court pivotal question The to be answered which, upon pipe held a tax while en in Court this case is whether the “first permanent Wy- route to its installation in a replacement parts use” of new took oming pipeline, stopped intrastate in Colo- place Wyoming. If the “first use” did sandblasted, inspected, rado it where was four-part not occur in test processed. and otherwise We held that the Transit, Complete articulated in Auto Inc. pipe place “first use” of the in Wyo- took adopted by Corpo- this Court Exxon ming rather than Colorado and that the inapplicable. ration is The Board of upon pipe require- tax satisfied the Equalization concluded: Complete ments of Auto presented The evidence herein however Brady, 430 U.S. 97 S.Ct. (1977).2 clearly parts purchased indicates the new L.Ed.2d 326 We stated for inclusion in the wheel Corporation, 783 P.2d at 688: Guernsey have their “first use” at the statutes, Wyoming The use tax W.S. facility placed on when locomo- -518, through impose an excise 39-6-501 cars, the ultimate use for tives or upon “persons storing, using or con- tax purchase The their was intended. mere tangible personal property” in suming 39-6-504(b). integration legis- of various into whole Wyoming. W.S. facility type the use is not the lature intended that tax be com- at the Havelock State, Transit, Inc., taxing with a substantial nexus with the United four-prong (3) (2) States fairly apportioned, Court articulated is does not dis- [ ] [ ] analyzing particular commerce, test for state tax whether a against criminate upheld can be under commerce clause. (4) provided fairly related to the services [ ] challenge tax will survive a clause commerce by the State.” 430 U.S. at 97 S.Ct. at 1079. (1) activity applied "when the tax to an [ ] artic- rationale to that either stat- invoke additional “first use” that opinion of the court. regulations anticipate. ulated utes or majority opinion does not address the avail- Equalization also concluded The Board of Yet, ability exemption. that, purchase of the had the the end result is these wheel wholly Wyoming, the within parts occurred Wyo- subject to are not use tax blies subject Wy- have transaction would been result, course, any avoids ming. That oming tax. sales tax as there is a state question to whether Northern contends upon interstate commerce. burden Havelock, place use” Nebras- “first took ka, to rebuild where the were used disposed approach more I am the issue to, *4 belonged the wheel assemblies exemption directly. I would invoke the of, possession Burling- and never left the “rolling articu- from excise tax for stock” Burlington Northern con- ton Northern. 39-6-505(a)(x), in W.S.1977. lated Section Corpora- with Exxon trasts this scenario view, appropri- my In the wheel assemblies tion, pipe was sold to where the that, part I ately are of the railroad car operation Wyoming. in exclusive use and assume, Board of even the State agree rolling stock. Equalization is would Equalization of has submitted Board context, agree I cannot with the In this persuasive sup- brief a well reasoned concept or other the whole that somehow that the “first use” porting its contention greater the sum convinced, of the railroad car is than place Wyoming. took in We and, however, in the parts my opinion, of the “first use” of the new of all its that parts place parts of that railroad car cannot took in Nebraska when several “rolling as in as stock.” component being were installed avoid identified Burlington Northern’s assemblies. simple my posi- explains illustration Guernsey of replacement re- mere that, Burlington I if tion. am satisfied Burlington paired on wheel assemblies shipped into Company used in com- Northern’s cars the com- Wyoming via motor carrier all of merce is not a “first use” which would and then ponent of a railroad car trigger application the the trackage parts on assembled those railroad test. Inc. railroad be roll- Wyoming, the car would above, In we hold the view entirely ing My intent is to it stock. make Equalization Board of decision of the use of railroad car clear the first the impose tax on the used to would have to occur but repair Burlington Northern’s wheel assem- exemption serve express statutory would the law of blies was not accordance with Logic to insulate it from use tax. we, therefore, state, this reverse such of a persuades me installation decision. assembly freight on a car that holding This Court’s on the issue exempt from cannot otherwise taxation being dispositive of the second issue in Wyoming with- produce taxable event Northern, presented by it not infringing upon interstate commerce. out necessary appropriate us to deter- or persuasive authority I find from other exemption rolling mine whether the stock supports jurisdictions that this conclusion had a tax- applied there been would have instance, that, recognizing in each able event. may respect difference be some with Reversed. statutory rules. language administrative exist, I those To the extent that differences Justice,

THOMAS, concurring specially. legislative or execu- am satisfied that other government in those agree majority position I tive branches potential to a consti- states were sensitive case that the first use the wheel adopted the wisely In concern and did occur revers- tutional blies not court, appropri- rules to lead to the judgment of the I would statute trial exempting rolling railways, result of stock from road tracks and came ate within the application of excise tax. exemption. Burlington, su- pra. by Burlington Other cases cited Northern, Depart- Inc. v. its brief would be consistent Revenue, Ill.App.3d ment with those discussed above. See Ohio and (1975), Ap- the Illinois N.E.2d Court Mississippi Weber, Railroad peals recognized switching that diesel en- (1880). Ill. cars, gines, passenger ship- Duval commuter Sierrita Cf. trailers, ping Corp. Department Revenue, containers and tractor all v. Arizona “rolling exemption came within a stock” (1977); 116 Ariz. 568 P.2d 1098 United provided in the Illinois statutes. The court Service, Comptroller Parcel rejected argument by the Illinois De- Treasury, Md.App. 458, 518 A.2d 164 partment appropriate of Revenue that the (1986); Machinery Tulsa Company v. exemption providing the one was the credit Commission, Oklahoma Tax 208 Okl. paid for use tax in another state. held It 253 P.2d 1067 I I note that would that, contrary argument by the tax- great difficulty stretching have exemp- ing authority, appropriate exemption tion as far as the Court of Mon- exemption look to was the stock” cooking tana did when it indicated that *5 in the statute and that it did reach the employees utensils used railroad on a property several items of in issue. boarding “necessary car was a and usual contrast,

By in LeTourneau R.R. Servic- accompaniment” and, therefore, part of the es, Revenue, Dept, Ill.App.3d rolling stock of the railroad. See Great of (1985), 90 Ill.Dec. 481 N.E.2d 864 Railway v.Co. Flathead Coun- Appeals recognized the Illinois Court of ty, 61 Mont. 202 P. 198 equipment that had the function of I Since am satisfied that the loading unloading freight containerized law, Equalization, Board of as a of matter “rolling from rail cars was not stock” with- give erroneously failed to purview in the statutory exemption. the benefit of case, In point the court made a exemption “rolling from excise tax for noting the equipment difference between stock,” I judgment would reverse the equip- that travels on railroad tracks and the district court. I am satisfied that this though ment that does not. Even approach appropriate ground is an for de- specific authority exists regulation a tax ciding case, it would not be neces- Illinois, persuaded I am that there is no sary for me to discuss whether the first question that the wheel would property occurred within the be stock” in Illinois. view, my exemp- state of In Missouri, the director of revenue as- rolling tion for stock reaches all flanged sessed a use tax on certain applies stock and wherever the first use equipment which was intended for pur- might agree I do have occurred. pose roadway equipment. and work instance, however, the first use oc- Supreme Court of Missouri looked at an jurisdiction Wyo- curred some other than exemption from state and local sales and ming. “ ‘[rjailroad rolling use tax for stock for transporting persons property use in * * Justice, CARDINE, interstate commerce dissenting, with GOLDEN, Justice, Northern Railroad v. Director Reve- joins. whom nue, (Mo.1990). S.W.2d That I affirm. would court noted the giv- restrictive construction question The critical is whether new or exemption provisions but, en for tax invok- used are first used when the wheel statutory the rule of construction that repaired assemblies are with the given plain words are to be their and ordi- meaning, nary equipment, it held that this when the wheel assemblies are used for constructing maintaining transportation transporta- used rail- in the railroad conditioning rather than distinguish transportation I am unable business. tion transportation. Bd. assembly for use Corp. Wyoming State (Wyo.1989), Equalization, 783 P.2d — U.S. -, 110 S.Ct. denied cert. (1990), where we held L.Ed.2d 300 rather than condition pipeline as a use was Here, first use is pipeline.

ing of the