No. 13814
I N T E SUPREME COURT O F THE STATE O M N A A
H F OTN
1978
DAVID A. ERDMAN,
P l a i n t i f f and R e s p o n d e n t ,
-vs-
C & C SALES, I N C . , et al.,
Defendants and A p p e l l a n t s .
Appeal from: D i s t r i c t Court of t h e Eighth J u d i c i a l D i s t r i c t ,
H o n o r a b l e P a u l G. H a t f i e l d , Judge p r e s i d i n g .
C o u n s e l o f Record:
For Appellants:
J a r d i n e , S t e p h e n s o n , B l e w e t t & Weaver, G r e a t F a l l s ,
&Ion a n a
t
Donald J . H a m i l t o n a r g u e d , Great F a l l s , Montana
F o r Respondent:
B u r t o n a n d Waite, G r e a t F a l l s , Montana
C h a r l e s M. C r u i k s h a n k I11 a r g u e d , G r e a t F a l l s , Montana
Submitted: January 23, 1978
Decided :MAR 2 1 1978
Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Defendants C & C Sales, Inc., and Robert F. Jorgenson
and James M. Wylder, doing business as C & C Sales, appeal
from a judgment of the district court, Cascade County, and
from the denial of their motions to amend the District Court's
findings of fact, conclusions of law and judgment and for a
new trial.
Plaintiff David A. Erdrnan brought this action against
C & C Sales, Inc., and defendants Jorgenson, Wylder, and Thomas
McGowan individually, doing business as C & C Sales, to recover
conmissions on sales plaintiff made while an employee of C & C
Sales. Following trial the District Court, sitting without a
jury, entered judgment against C & C Sales, Jorgenson and Wylder
jointly, severally, and individually, in the amount of $6,259.80.
Prior to September 25, 1974, C & C Sales was an unin-
corporated business located in Great Falls, Montana, engaged in
the selling and servicing of liquor dispensing and other beverage
equipment throughout Montana. C & C Sales had been organized
by Jorgenson and Wylder, who were also officers of the Great
Falls Coca Cola Bottling Company. The record discloses that in
some respects C & C Sales and the bottling company shared common
operation under Jorgenson and Wylder. C & C Sales utilized the
bottling company's offices and secretarial personnel. C & C's
books were kept as a part of the bottling company's books and
disbursements attributable to C & C were made from bottling
company funds. The area dealership of one line of liquor dis-
pensing equipment handled by C & C was in the name of the "coca
cola company."
In June 1974, Thomas McGowan was hired by C & C Sales,
some four months before C & C was incorporated. Plaintiff,
who then lived in Saginaw, Michigan, was contacted by McGowan
in August 1974 and invited to meet with McGowan, Jorgenson and
Wylder for a job interview. At this meeting, held in Lincoln,
Montana, over the Labor Day weekend of 1974, plaintiff's pro-
posed salary and employment benefits were discussed but no
agreement was reached. Shortly thereafter plaintiff was hired
as a salesman by C & C Sales. This was approximately a month
before C & C Sales was incorporated.
In a "work agreement" dated September 4, 1974, signed
by McGowan, plaintiff's compensation was set at $150 per week
in salary, a regular conmission of 10% on sales made by plaintiff,
and override commissions of 2% on sales of one line of liquor
dispensing equipment, and 3% sales made by the sales staff ex-
cluding those made by plaintiff or McGowan. The agreement also
stated C & C Sales would pay plaintiff's business expenses and
expenses incurred in moving from Michigan to Montana.
On September 25, 1974, C & C Sales was incorporated with
Jorgenson, Wylder and McGowan as officers. Both before and
after the incorporation plaintiff sold various products for C
& C Sales around the state. He was regularly paid a 10% commis-
sion on these sales as well as his $150 per week salary. Plain-
tiff neither received nor demanded any override commissions
during this time.
In November 1974, McGowan was fired by Jorgenson and
Wylder. A few days later plaintiff also was fired. Following
his termination plaintiff requested payment of the override
co~~missions alleged were due him under the September 4, 1974
he
work agreement. C & C refused to pay any override commissions.
On appeal, the issue is whether the District Court's
findings of fact, conclusions of law and judgment are supported
by the evidence. Defendants specifically challenge the District
Court's determinations that Jorgenson and Wylder were personally
liable for the money owed plaintiff pursuant to his employment
by C & C Sales and that plaintiff was entitled to override
commissions.
Defendants Jorgenson and Wylder contend they organized
and operated C & C Sales as a part of the bottling company
rather than as a separate business of their own. Plaintiff's
contention is that C & C was distinct from the bottling company
from its inception and was operated by Jorgenson and Wylder as
a general partnership, until it was incorporated some three
weeks after plaintiff was hired.
Each side asserts the evidence supports their respec-
tive claims as to the status of C & C Sales as of the time plain-
tiff began working for C & C. Plaintiff's testimony shows he
was told by McGowan initially that McGowan worked for "coca cola"
and later that "coca cola" would arrange for the lease and in-
surance on the automobile plaintiff would receive as a company
car. Plaintiff also testified he was told, before he was hired,
that the "coket'insurance plan might be available to him.
The bottling company secretary who kept the books of both
C & C Sales and the bottling company testified the accounts of
the two operations were not completely separated until C & C was
incorporated and that certain amounts, such as those concerning
expense money advances to plaintiff, were never broken down for
attribution to the proper account. As to other amounts, however,
the records of C & C Sales and the bottling company were distin-
guishable.
A key factor with regard to the question of C & C's
identity and the question of plaintiff's entitlement to override
commissions was the position of Thomas McGowan within the two
operations. Although named a party defendant, McGowan took no
part in this action. He apparently had left Montana.
Wylder testified McGowan had no independent authority with-
in C & C Sales. Jorgenson testified McGowan was hired as a
salesman with the understanding he might later have a manage-
ment position. Plaintiff testified he was told by Wylder and
Jorgenson from the start that McGowan was "one-third" of C & C
Sales and his understanding was that McGowan managed C & C.
Whatever McGowan's status was prior to C & C's incorporation,
thereafter he was on the board of directors of C & C and served
as its president until his termination. However, McGowan never
did hold an office or an interest in the bottling company.
The parties dispute whether testimony as to McGowanls
position within C & C Sales establishes that C & C was a separate
operation or an integral part of the bottling company. Also in
dispute is the effect of testimony offered by both sides con-
cerning McGowan's authority to enter into the work agreement
which provided for plaintiff's override commissions. The thrust
of testimony of Jorgenson and Wylder was that McGowan never had
authority to set terms and conditions of em2loyment.
On the other hand, uncontradicted testimony showed that
NcGowan hired a serviceman for C & C Sales, told the man what
his compensation would be, and the man received the promised
amounts. It was also established that on McGowan's recommenda-
tion another C & C employee was fired. Other testimony indica-
ting McGowanls authority included references to his performance
of managerial tasks, such as purchasing equipment from manufac-
turers for sale by C & C.
Plaintiff testified he was told by Jorgenson and Wylder
at the meeting in Lincoln that McGowan had the authority to
"finalize" the details of plaintiff's employment, and during
the time he worked for C & C, McGowan exercised control over
C & C's operations.
Defendants contend plaintiff's failure to demand over-
ride commissions during the time he was working for C & C Sales
operates as a waiver of whatever right he had to these commissions.
Plaintiff argues his failure to demand override commissions
during the three month period he was employed by C & C Sales
should be balanced against defendants' failure to disavow the
work agreement, when it first became known to them.
Taken as a whole, the District Court's findings of fact
and conclusions of law resolve the central factual disputes in
plaintiff's favor. Taken alone, some of the findings of fact
reflect an apparent lack of uniformity in the District Court's
conception of the C & C Sales operation. In finding of fact I,
C & C Sales is characterized as an "unincorporated division of
Great Falls Coca-Cola Bottling Company managed by Robert Jorgen-
son, Jr." Findings I1 and I11 characterize McGowan as a "sales
employee" of the bottling company prior to its incorporation.
In finding of fact VIII, the District Court found Wylder,
McGowan and Jorgenson "regarded the operation of C & C Sales
as a departmental function of Great Falls Coca Cola Bottling
Company." Finding of fact IX states McGowan "was regarded by
all as the general manager" of the C & C Sales operation.
In Ballenger v. Tillman, 133 Mont. 369, 378, 324 P.2d
1045 (1958), this Court stated:
" ' * * * findings of fact are to receive such
a construction as will uphold rather than de-
feat the judgment thereon.'"
The judgment clearly imposes individual liability on Jorgenson
and Wylder. Therefore, whether that judgment is proper depends
upon whether the findings as construed to sustain the judgment
are supported by the evidence.
Two principles of appellate review, as stated in Merritt
v. Merritt, (1974), 165 Mont. 172, 526 P.2d 1375, are basic to
our function as an appellate court:
" ' * * * the function of this Court is to deter-
mine whether there is substantial evidence to
support the findings of the trial court, and we
will not reverse such findings of fact unless
there is a clear preponderance of evidence against
such findings. * * * '
" ' * * * The credibility of the witnesses and
the weight to be given their testimony is a matter
for the district court's determination in a non-
jury case * * * and the Supreme Court will sustain
such determination by the trial court based on
substantial conflicting evidence.'" 165 Mont. 177-178.
There was conflicting and in some instances confusing
evidence presented to the District Court. There was substantial
evidence adduced at trial in support of the District Court's
determinations that C & C Sales was operated by Jorgenson and
Wylder as a separate business from the bottling company, and
that McGowan was given the authority to set terms and conditions
of plaintiff's employment. The District Court's conclusions
that these defendants failed to timely disavow plaintiff's work
agreement and had accepted the benefits therefrom are also sound.
As this Court has often stated, "findings of fact and conclusions
of law of the trial court must be read in toto * * *." Montana
Mobile Home Court v. Finley, (1973), 163 Mont. 7, 10, 514 P.2d
762; Erickson v. Fisher, (1976), Mont. , 554 P.2d 1336, 33
St.Rep. 947, 950.
Our review of the entire record fails to disclose a pre-
ponderance of the evidence against the District Court's findings,
conclusions and judgment.
Heretofore, we have discussed this case on its merits.
Plaintiff has raised questions concerning the appeal as well,
our consideration of which follows.
Plaintiff first contends the appeal should be dismissed
on the ground his judgment has been satisfied. The record dis-
closes judgment was entered on December 30, 1976, with notice
of entry of judgment filed on January 6, 1977. The District
Court then stayed execution of judgment pending resolution of
defendants' motions to amend the findings of fact and conclusions
of law and for a new trial. On February 4, 1977, after a
hearing, these motions were denied; the order to that effect
was mailed to defendants' attorney on February 7, 1977. On
the same day, plaintiff executed on the bank account of one of
defendants. Before the sheriff delivered this money to plain-
tiff, and before entry of satisfaction of judgment, defendants
moved to stay disbursement and to file a supersedeas bond.
After a hearing these motions were granted, a supersedeas bond
was posted, and the money received upon execution was returned
to defendant's bank
Plaintiff's motion to dismiss the appeal was briefed
and argued before this Court, along with arguments on the merits.
Plaintiff relies on Gallatin Trust and Savings Bank v. Henke,
(1969), 154 Mont. 170, 177, 461 P.2d 448, and Gallatin Trust
and Savings Bank v. Foster, (1969), 154 Mont. 185, 191, 461 P.2d
452, cases in which this Court held the failure of an unsuccess-
ful party to post a supersedeas bond as provided by Rule 7(a),
M.R.App.Civ.P., subjects that party's rights to execution, sub-
sequent satisfaction of the judgment, and possible mootness, as
far as appeals are concerned. In each case, satisfactions of
judgments were entered and no supersedeas bonds were posted.
The present case is distinguishable from Henke and Foster.
Here, defendants brought into play Rule 7(a) provisions for stay-
ing judgments as soon as practicable upon receipt of the order
disposing of their post-judgment motions to amend the findings
and conclusions and for a new trial. The District Court's grant
of a stay of disbursement and defendants' posting of a super-
sedeas bond precluded satisfaction of plaintiff's judgment.
Therefore, plaintiff's motion to dismiss this proceeding is denied.
Plaintiff next contends he is entitled to damages,
alleging the present appeal is without merit. ~ule32, M.R.App.
Civ.P., provides:
"If the Supreme Court is satisfied from the
record and the presentation of the appeal,
that the same was taken without substantial
or reasonable grounds, but apparently for
purposes of delay only, such damages may be
assessed on determination thereof as under
the circumstances are deemed proper."
Here, the question of the sufficiency of the evidence
to support the District Court's findings of fact and conclusions
of law and judgment was reasonably in issue. Where there is
a reasonable ground for appeal a respondent is not entitled to
recover damages under Rule 32, M.R.App.Civ.P. Larry Larson &
Associates v. John R. Dailey, Inc., (1971), 158 Mont. 231, 236,
Finally, plaintiff contends he is entitled to additional
attorney fees to cover costs incurred as a result of defendants'
post-trial motions and appeal. Plaintiff was awarded attorney
fees by the District Court pursuant to section 41-1306, R.C.M.
1947, by the terms of the judgment. We agree plaintiff is en-
titled to reasonable additional attorney fees, and remand this
cause to the District Court for their determination.
The judgment of the District Court is affirmed and the
cause remanded for further proceedings consistent with this
opinion.
We concur:
place of Mr. Chief Justice
Paul G. Hatfield.