### NO. 81-405 INTHE SUPREME COURTOF THE STATEOF MONTANA 1982

GARY COMO, Plaintiffand Respondent,

VS. 

### JIMRHINES and SOUNDWEST, INC., DefendantsandAppellants.

Appeal from: District Court of the Fourth Judicial District, Inand for the County ofMissoula Honorable Jack L. Green,Judgepresiding. Counsel of Record: ForAppellants: Datsopoulos,MacDonald & 

### Lind,Missoula, Montana ForRespondent: Hirst,Dostal & 

### Withrow,Missoula,Montana

Submitted onbriefs: February 11,1982 Decided: 

## MAY27

# ma Filed:

# &@

$4 

# yv ClerkMr. JustlceGene B. Daly delivered the Oplnionof the Court. This 

### is an appeal from a judgment issued by the Dlstrlct Court of the Fourth Jud~cialDistrict, Missoula County, in which the District Court found that appellants breached an employment contract with respondent. The Dlstrict Court awarded damages to respondent against both appellants inthe amount of $3,754, including $1,000 forone month's salary, $1,754 for travel and moving expenses, and a penalty of $1,000 

### as provided by sectlon 39-3-206, MCA. Respondent was also awarded reasonable attorney fees and costsunder section 39-3-214, MCA. Appellant, 

### JimRhines, is president and 

### a stockholder of: Sound West, Inc. (Sound 

### West). Sound West owns a chain of stores, one inMissoula, Montana. Respondent, Gary Como, has a background in business and accounting. In 1964, he received a college degree in business administration with a minor in accounting. He has had about ten years of experience 

### as an accountant and worked wlth a computer for two years of that time. From January 1977 to March 1978, respondent worked as a manager of a familyrestaurant inSt. Paul, Minnesota. Desiring to find work in western Montana, respondent contacted several employment agencies in Missoula, Montana. On April 18, 1978, an employment agency notified respondent that JimRhines at Sound Nest

### was looking for someone with experience in accounting and computer programming. Respondent called Rhines. They briefly discussed respondent's qualifications and set a date for an interview InMissoula. Respondent traveled toMissoulaby train and 

### metwithRhines on April 26, 1978. 'The DistrictCourt found that at the first interview Rhines told respondent thathe wanted an accountant who could use an IBM computer to handle inventory, accounts payable and bank accounts. Rhines 

### claims that, in fact, he wished to hire a computer programmer, not an accountant. Rhines admits, however, thathe never told respondent this. At the first interview, respondent's qualifications



### were discussed. He 

### met with Sound West's accountant, A1 Hawley, discussed the accounting system and 

### was shown the computer printouts of the accounting programs used by Sound West. He 

### was toldby Rhines toreturn the next day. At the second interview, respondent claims, and the District Court found, that Rhines told respondent that he would like to take him on. Compensation, benefits, and duties of the job were then discussed and, according 

### to the tlndlngsof the District Court, agreed upon. Respondent made notes of the terms of hisemployment: he would be paid $1,000 per month for two months; then $1,200 per month, and $1,500 per month sometime inthe fall. Respondent would work five days a week unless more were necessary. He would have sixdaysof paid vacation. The District Court concluded that, as part of this agreement, respondent's moving expenses as

### wellas expenses forhisinterview trlpwould be reimbursed by JimRhines and Sound West. The District Court also found that Rhines dgreed respondent would not have tomove from St. Paul until June 5, so his children could finish scl?ool. Respondent would then 

### startwork 

### as soon as he 

### was settled. On April 28, 1978, respondent went to the MissoulaJob Service and completed an interstate wage claim. On the form, respondent stated that on April 26 he had been hired by Sound West as an accountant with a starting date of approximately June 19, 1978. He alsonoted that Sound West

was paying forthemove. In earlyJune respondent rented a truckand moved his famlly and their belongings 

### to Missoula. On June 9, 1978, respondent went tothe Sound West storeand told Rhines that hlshousing arrangements had notworked out and he would not be able tobegin work fortwo weeks. Respondent testified, and the DistrictCourt found, thatRhines advised respondent to do what he had 

### to do to settle in and then report for work later in themonth. On orabout June 21, 1978, respondent returned tothe Sound West store and requested a date to startwork. Rhines sent respondent to Sound 

### West

## 's accountant. The accountant dld not give a specific date for respondent to start work dnd saidhe would contact respondent the followingweek. Respondent continued to calland personally go 

### to the Sound West store to set 

### a starting date. Rhines 

### was noncommittal. Respondent gave Rhines a list of his moving expenses, but Rhines refused 

### to pay them. Finally, on or about June 30, 1978, Rhines told respondent he did not have

a lobat Sound 

### West. Respondent then began looking for other work in Mlssoula. He received temporary work in January 1979. In March 1979he received permanent employment asan accountant with theUniversityof Montana, where he remains employed. The District Court concluded that under the above facts 

### Jim Rhines, 

### as the president and manager of SoundWest, offered employment to respondent with express terms and respondent accepted the offer. The District Court then concluded that Rhines and Sound 

### West, Inc., breached this contract by failing topay salary and benefits, and failing toallowrespondent toperform hisemployment. The District Court concluded thatrespondent had been hired on a month-to-month basis and awarded respondent $1,000 inone month's salary; $1,754 inmoving expenses were alsoawarded as part of the employment contract. Under section 39-3-206, MCA, the District Court found that Khlnes and Sound 

### West also owed $1,000 as a penalty. Flnally, under section 39-3-214, MCA, the District Court dwarded respondent a reasonable attorney fee and costs. Both Rhines and Sound West 

### were held liable for the 1

udgment

# . Appellants raise three issues: 1. Is there substantial evidence to support the Dlstrlct Court's finding that respondent had a contract of employment with Sound West, Inc.? 2. Did the District Court 

### err by applying sectlons 39-3-206, MCA, and 39-3-214, MCA, torespondent's breach of contract action? 3. Did the Dlstrict Court err by holding appellant JimRhines liable forrespondent's damages? The District Court's judgment is affirmed to the extent that a contract 

### was agreed upon and breached and that Khlnes 1s personally liable for damages resulting from the breach. The case 

### is remanded, however, fora redetermination of damages. Appellants contend under the first issue that thestatement "we would like to take you on" is not deflnite or certain and does not constitute an offer. They 

### claim that Sound West had an openlng for a computer programmer only. ~astly, Rhines claims he told the respondent that he would be hired inJune 197bonly ifhe 

### were needed. Where the existence of an 

### oral contract 

### is contested and the evidence 

### is conflicting, the existence of the contract is a question for the 

### trier of fact. Keil v. Glacler Park, Inc. (1980), Mont. 

## , 614 P.2d 502, 505, 37 St.Kep. 1151, 1154. The credibility of witnesses and the weight given their testimony 

### are matters exclusively within the province of the District Court ina nonjury case. harrisv. Harrls (1980), 

### -Mont. - 

## , 616 P.2d 1099, 1102, 37 St.Rep. 1696, 1699. This Court willnot disturb a judgment on appeal where substantial evidence to support the judgment appearson the record. See, Keil, 614 P.2d at 505, and cases cited therein. Here, the evidence supportsthe DistrictCourt's conclusion that an agreement 

### wasreached between respondent and Rhines. The District Court was inthebestposltion toweigh the credibility of the testimony and it chose 

### to believe respondent. Respondent's actions 

### were totally consistent with those of a person who, in good faith, thought he had a job. He took notes of the 

### terms of his employment. He filled out a Job Service form stating that he had a job as
an accountant at Sound West. He moved himself and his family toMissoula ata greatexpense. Most importantly, however, are the admitted actions of Khines and Sound West's accountant, A1 Hawley. When respondent went to the Sound 

### West store in early June,Rhines was totallynoncommittal. He did not tellrespondent atthat time he did not have a job. Instead, Rhines referred respondent toBawley, who testified that he remembered that the conversation took place but could not remember what was said. Respondent's uncontradicted testimony is t-hat he asked Hawley about a st-artingdate and Hawley asked him to returnlater. The above facts amply support the District Court's conclusion that a contract was entered intobetween respondent and mines. Appellants cont-end in their second issue that the District Court erred by applying the statutory provisions found in Title 39, Chapter 3, Part 2, of the Mont-ana Code Annotated. Appellants' contention 

### iswell-taken. In sect.ion 39-3-201, MCA, "employ," "employee," "employer" and "wages" are defined forthispart.: "(2)'Employ' means permit 

### or suffer

### towork. 

### "(3) 'Employee' includes anypersonwho works foranotherforhire. "(4) 'Employer' includes any individual, partnership, association, corporation, business trust, legalrespresentative, orany organized groupof persons actingdirectly

### or indirectly in t-he interest of an employer in relation to an employee but shallnot include the United States. 

### "(5) 'Wages' includes any money due an employee from the employer or employers, whether 

### to be paid by the hour, day, week, semimonthly, monthly, or yearly and shall include bonus, piecework, t-ips, and yratuit-iesof any kind." (Emphasis added.) Respondent 

### wasnot an employee within the meaning of the statutes. He never actually performed work for Sound West. Further, t.he general provision of section 39-3-204(1) 

## ,MCA, provides:

"Every employer of labor in the state of Montana shall pay 

### to each employee the wages earned by such employee

# .. . and noperson forwhom laborhasbeen performed may wit-h-

L 

## .. hold from any employee any wages earned 

### or - - unpaid for 

### a-longer period t.han 10 business days afterthe 

### same aredue

# . .." Here, respondent. neither earned, nor performed, 

### any work for Sound West. Respondent, by definition, does not

come under t-he protections of these sections, including section 39-3-206, MCA, which permits the imposition of a penalty and section 39-3-214, MCA, which 

### allows t.he award of

a reasonable attorneyfeeand costs. Further, respondent's position 

### is not. support-ed by the policy underlying the wage 

### claim stat-utes. The Oregon Supreme Court has stated: "The policyof t-he [wage claim] statute is to aid an employe in the prompt collection of compensation due him and to discourage an employer from using a position of economic superiority

### as a lever todissuadean employe from promptly collecting his agreed upon compensation. 

# . . " State ex 

### rel. Nilsen v. Oregon State Motor Assoc. (1967), 248 Or. 133, 432 P.2d 512, 515. The District Court erred, therefore, by imposing a $1,000 penalty under section 39-3-206, MCA, and awarding attorneyfeesand 

### costs under section 39-3-214, MCA. A redetermination of damages must be made by the District Court. In redetermining damages, the District Court should be guided by the general rule for damages resulting from a breach of contract. This general rule is found in section 27-1-311, MCA, which provides: "For the breach of an obligation arising from contract, t.hemeasure of damages, except when otherwise expresslyprovided by thiscode, is the amount which 

### will compensate the party aggrieved for 

### all the det-riment which 

### was proximateiy caused thereby

### or int.he ordinarycourse of things would be likely 

### to result therefrom. Damages which are not clearly ascertainable inboth theirnature and origin cannot be recovered for a breach of contract

# ."
In construing the above section, this Court has emphasized that 

### its purpose 

### is to compensate an aggrieved party for the 

### loss he has sustained, and that the nonbreaching party should receive a sum which willgive him

an economic status identical 

### t.o t-hat which he would have enjoyed had the contract been performed. Wyatt v. School District No. 104, Fergus County (1966), 148 Mont. 83, 89, 417 P.2d 221, 224; and 

### see also, Laas v. Montana St-ate Highway Commission (1971), 157Mont.. 121, 483 P.2d 699; and Whitney 

### v. Bails (1977), 172Mont. 121, 560 P.2d 1344. We acknowledged inWyatt. thatthemeasure of damages forbreach of an employment contractby an employer isprima facie t-he

sum stipulated t.o be paid for the services. 

### More importantly, however, 

### we also noted that ot-herexpenses, such as those incurred while seeking alt.ernative employment., may alsobe allowable if such activity 

### is considered t.he natural consequence of t.he breach. Wyat-t, 417 P.2d at 224-225. Appellants' last cont.ention is that the District Court erred by holding Rhines personally liable for respondent's damages. The Dist.rict Court concluded asa 

### matter of law that "Jim Rhines 

### as the president and manager of Sound West, Inc., did offer employment to Gary Como for an accounting position with express 

### t.erms." (Conclusionof Law No. 2.) The District Court t.hen went on to conclude that Jim Rhines 

### - and Sound West, Inc., breached the employment contract and thatboth Rhines and Sound West were liable for the damages arisingoutof thisbreach.This Court has recognized the general rule that an agent 

### is not personally liableon a contract entered intoby him on behalf of hisprincipal if it appears, in fact, that. he disclosed the identity of his principal and made the engagement forhim. Farr v. Stein (1918), 54 Mont.. 529, 172 P. 135; Budget Ins. & Finance v. Leight.y (1980), Mont.



## , 607 P.2d 1125, 37 St.Rep. 411. In Farr, t-his Court. also recognized that the existence of the agency must be disclosed in appropriate 

### terms, including the name of the principal for whom the agent 

### is acting. Farr, 172 P. at 136. Moreover, merely because the agent, in making the contract for his principal, uses the trade name under which his principal transacts business 

### is not of itself a sufficient identification of the principal to protect the agent from liability. Myers-Leiber Sign Co. v. Weirich

This general rule of agency also applies to the corporate setting: "'The rule thatwhere an agent enters into a contract in his own name for an undisclosed principal, the other party to the contract may hold the agentpersonally liable, applies equally

### welltocorporate officersoragents. It has been held that themanaging officerof a corporation, even though acting for the company, becomes liable 

### as a principal where he deals with one ignorant of the company's existence and of his relation to it, and failsto inform the latterof the facts.

## ' 3 Fletcher's Cyclopediaon Corporations, S1120, p. 762 (1965)

# ." McCluskey Commissary, Inc. v. Sullivan (1974), 96 Idaho 91, 524 P.2d 1063, 1065. Here, the record does not indicate that. Rhines told respondent he would be working for Sound West, Inc. In fact, this lawsuit.was initiated by respondent against "Jim Rhines, d/b/a (doing business 

### as) Sound 

### West." While theagency was disclosed during the course of this litigation, the disclosure of the principal after the contract 

### is executed willnot relieve the agent. from liability. MyersLeiberSignCo., supra, 410 P.2d at493. In the absence of a showing by appellant-s that respondent understood Rhines 

### was acting as an agent for the corporation, Sound West, Inc., and not as an individual doingbusiness 

### as Sound 

### West, it cannotbe said t-heDistrict Court. erred by holding Rhines personally liable on the contract. We therefore affirm the Dist.rict Court's conclusion that. appellants breached an employment contract with respondent. We remand, however, for a redetermination of damages in accordancewith thisopinion.

We concur:

Chief Justice

I would affirmtheDistrict