No. 13814 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

DAVID A. ERDMAN, 

Plaintiff and Respondent, 

-vsC & C SALES, INC., et al., 

Defendants and Appellants. 

Appeal from: District Court 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 : 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 unincorporated 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 dispensing 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 proposed 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 excluding 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% commission on these sales as well as his $150 per 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 alleged were due him under the September 4, 1974 

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 respective claims as to the status of C & C Sales as of the time plaintiff 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 insurance 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 distinguishable. 

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 within C & C Sales. Jorgenson testified McGowan was hired as a 
salesman with the understanding he might later have a management 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 concerning 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 recommendation another C & C employee was fired. Other testimony indicating McGowanls authority included references to his performance 

of managerial tasks, such as purchasing equipment from manufacturers 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 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 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 Jorgenson, 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 defeat 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 determine 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 nonjury 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 preponderance 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 discloses 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 plaintiff, 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 unsuccessful party to post a supersedeas bond as provided by Rule 7(a), 

M.R.App.Civ.P., subjects that party's rights to execution, subsequent 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 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 supersedeas 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. ~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 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 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 consistent with this 

opinion. 

We concur: 

place of Mr. Chief Justice 

Paul G. Hatfield.