No. 13814 INTHE SUPREME COURT OF THE STATE OF MONTANA 1978

DAVID A. ERDMAN, Plaintiff and Respondent,

-vsC & C SALES, INC., etal., Defendants and Appellants.

Appeal from: DistrictCourt of the Eighth Judicial District, Honorable Paul G. Hatfield, Judge presiding. Counsel of Record: For Appellants: Jardine, Stephenson, Blewett & Weaver, Great Falls,

&Ion tana Donald J. Hamilton argued, Great Falls, Montana For Respondent: Burton and Waite, Great Falls, Montana Charles M. Cruikshank I11 argued, Great Falls, Montana

Submitted: January 23, 1978 Decided:

## MAR2 1

## 1978Mr. Justice Daniel J. Shea delivered the Opinion of the Court.
Defendants C & C Sales, Inc., and Robert F. Jorgenson and JamesM. 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 salesplaintiff made while an employee of C & C Sales. Following trial the District Court, sittingwithout 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 unincorporated business located in Great Falls,Montana, engaged in the selling and servicing of liquor dispensing and other beverage equipment throughoutMontana. C & C Saleshad been organized by Jorgenson and Wylder, who were also officers of the Great Falls Coca Cola Bottling Company. The record discloses that in

some respectsC & C Sales and the bottling company shared common operationunder Jorgenson and Wylder. C & C Sales utilized the bottling company's offices and secretarialpersonnel. C & C's books were kept as a part of the bottling company's books and disbursements attributable to C & C were made frombottling company funds. The area dealership of one line of liquor dispensing equipment handled by C & C was in the name of the "coca cola company." In June 1974,ThomasMcGowan was hired by C & C Sales,
some fourmonths before C & C was incorporated. Plaintiff, who then lived in Saginaw, Michigan,was contacted by McGowaninAugust 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 proposed salary and employment benefitswere discussed but no agreementwas reached. Shortly thereafter plaintiff was hired

as a salesmanby C & C Sales. This was approximately a month before C & C Saleswas incorporated. In a "work agreement"dated September 4, 1974, signed by McGowan,plaintiff's compensationwas set at $150per week in salary, a regular conmission of 10% on salesmade by plaintiff, and override commissions of 2% on sales of one line of liquor dispensing equipment,and 3% salesmade by the sales staff excluding thosemade by plaintiff or McGowan. The agreement also stated C & C Saleswould pay plaintiff's business expenses and expenses incurred in moving fromMichigan to Montana. On September 25, 1974,C & C Saleswas incorporatedwith 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% commission on these sales as well as his $150per week salary. Plaintiff 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 he allegedwere due him under the September 4, 1974 work agreement. C & C refused to pay any override commissions. On appeal, the issue is whether the DistrictCourt's findingsof 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 employmentby C & C Sales and thatplaintiff 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 respective claims as to the status of C & C Sales as of the time plaintiff began working for C & C. Plaintiff's testimony showshe

was told by McGowan initially thatMcGowan worked for "coca cola" and later that "coca cola"would arrange for the lease and insurance on the automobile plaintiff would receive as a company
car. Plaintiff also testified he was told,before he was hired, that the "coket'insuranceplan 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 operationswere not completely separated until C & C was incorporated and that certain amounts, such as those concerning expensemoney 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 companywere distinguishable. A key factorwith regard to the question of C & C's identity and the question of plaintiff's entitlement to override commissionswas the position of Thomas McGowan within the two operations. Although named a party defendant,McGowan took no part in this action. He apparentlyhad leftMontana. Wylder testified McGowan had no independent authority within C & C Sales. Jorgenson testified McGowan was hired as asalesmanwith the understanding he might laterhave a management position. Plaintiff testified he was told by Wylder and Jorgenson from the start thatMcGowan was "one-third"of C & C Sales and his understandingwas thatMcGowan managed C & C. Whatever McGowan's statuswas prior to C & C's incorporation, thereafterhe 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 disputewhether testimony as to McGowanls position within C & C Sales establishes that C & Cwas a separate operation or an integralpart of the bottling company. Also in dispute is the effect of testimony offered by both sides concerningMcGowan's authority to enter into the work agreement which provided forplaintiff's override commissions. The thrust of testimony of Jorgenson and Wylder was thatMcGowan 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 theman what his compensation would be, and the man received the promised amounts. Itwas also established that onMcGowan's recommendation another C & C employee was fired. Other testimony indicating McGowanlsauthority included references to his performance of managerial tasks, such as purchasing equipment from manufacturers for saleby C & C. Plaintiff testified he was told by Jorgenson and Wylder at the meeting in Lincoln thatMcGowan 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 override 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 threemonth period he was employed by C & C Sales should be balanced againstdefendants' failure to disavow the work agreement,when it firstbecame known to them. Taken as a whole, the District Court's findings of fact and conclusionsof 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 DistrictCourt'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 Jorgenson,Jr." Findings I1 and I11 characterize McGowan as a "sales employee"of the bottling company prior to its incorporation. In finding of factVIII, 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 "wasregarded by all as the generalmanager" of the C & C Sales operation. In Ballenger v. Tillman, 133Mont. 369, 378, 324 P.2d 1045 (1958), this Court stated: 

### "'

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## * * findings of fact are to receive such a construction as will uphold rather than defeat the judgment thereon.'" The judgment clearly imposes individual liability on Jorgenson and Wylder. Therefore, whether that judgment isproper 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 determine whether there is substantial evidence to support the findings of the trial court, and we will not reverse such findings of fact unlessthere 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 nonjury case 

## * * * and the Supreme Courtwill sustain suchdetermination by the trial court based on substantial conflicting evidence.'" 165Mont. 177-178. There was conflicting and in some instances confusing evidence presented to the District Court. Therewas 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 thatMcGowan was given the authority to set terms and conditions of plaintiff's employment. The District Court's conclusions that these defendants failed to timely disavowplaintiff's work agreement and had accepted the benefits therefrom are also sound. As this Court has often stated, "findingsof fact and conclusions of law of the trial court must be read in toto 

## * * 

## *." Montana Mobile Home Courtv. Finley, (1973),163Mont. 7, 10, 514 P.2d Mont. 762; Erickson v. Fisher, (1976), 

### , 554 P.2d 1336, 33 St.Rep. 947, 950. Our review of the entire record fails to disclose a preponderance of the evidence against the District Court's findings, conclusions and judgment. Heretofore,we have discussed this case on itsmerits. Plaintiff has raised questions concerning the appeal aswell,
our consideration of which follows. Plaintiff first contends the appeal should be dismissed
on the ground his judgment has been satisfied. The record discloses judgmentwas entered on December 30, 1976, with notice of entry of judgment filed on January 6,1977. The District Court then stayed execution of judgmentpending resolutionof defendants' motions to amend the findings of fact and conclusionsof 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 thismoney to plaintiff, and before entry of satisfaction of judgment,defendants moved to stay disbursement and to file a supersedeasbond. After a hearing these motions were granted, a supersedeasbond

was posted, and themoney received upon executionwas returned to defendant's bank Plaintiff's motion to dismiss the appealwas briefed and argued before this Court,along with arguments on themerits. Plaintiff relies on Gallatin Trust and Savings Bank 

### v. Henke,

(1969),154Mont. 170, 177, 461P.2d 448,and Gallatin Trust and Savings Bank v. Foster, (1969), 154Mont. 185, 191, 461P.2d 452, cases in which this Court held the failure of an unsuccessfulparty to post a supersedeasbond as provided by Rule 7(a), M.R.App.Civ.P., subjects thatparty's rights to execution, subsequent satisfaction of the judgment,and possiblemootness, as far as appeals are concerned. In each case, satisfactions of judgmentswere entered and no supersedeas bonds were posted. The present case is distinguishable fromHenke and Foster. Here,defendants brought intoplay Rule 7(a) provisions for staying 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 supersedeasbond 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 iswithout merit. ~ule 32,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 takenwithout substantial or reasonable grounds,but apparently for purposes of delay only, such damagesmay 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 judgmentwas reasonably in issue. Where there is a reasonableground for appeal a respondent is not entitled to
recoverdamages under Rule 32,M.R.App.Civ.P. Larry Larson & Associates v. John R. Dailey, Inc., (1971),158Mont. 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 Courtpursuant to section 41-1306, R.C.M. 1947,by the terms of the judgment. We agreeplaintiff is entitled 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 consistentwith this opinion.

We concur:

place of Mr. Chief Justice Paul G. Hatfield.