NO. 81-405 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1982 

GARY COMO, 

Plaintiff and Respondent, 

VS. 

JIM RHINES and SOUND WEST, INC., 

Defendants and Appellants. 

Appeal from: District Court of the Fourth Judicial District, 

In and for the County of Missoula 

Honorable Jack L. Green, Judge presiding. 

Counsel of Record: 

For Appellants: 

Datsopoulos, MacDonald & Lind, Missoula, Montana 

For Respondent: 

Hirst, Dostal & Withrow, Missoula, Montana 

Submitted on briefs: February 11, 1982 

Decided: MAY 2 7 ma 

Filed: 

&@ $4 yv 

Clerk 
Mr. Justlce Gene B. Daly delivered the Oplnion of the Court. 

This is an appeal from a judgment issued by the 

Dlstrlct Court of the Fourth Jud~cial District, 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 in the amount of $3,754, including $1,000 for one 

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 

costs under section 39-3-214, MCA. 

Appellant, Jim Rhines, is president and a stockholder 

of: Sound West, Inc. (Sound West). Sound West owns a chain 

of stores, one in Missoula, 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 family restaurant in St. 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 Jim Rhines 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 

In Missoula. 

Respondent traveled to Missoula by train and met with 
Rhines on April 26, 1978. 'The District Court found that at 

the first interview Rhines told respondent that he 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, that he 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 told by Rhines to return 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 

tlndlngs of the District Court, agreed upon. 

Respondent made notes of the terms of his employment: 

he would be paid $1,000 per month for two months; then 

$1,200 per month, and $1,500 per month sometime in the fall. 

Respondent would work five days a week unless more were 

necessary. He would have six days of paid vacation. 

The District Court concluded that, as part of this 

agreement, respondent's moving expenses as well as expenses 

for his interview trlp would be reimbursed by Jim Rhines and 

Sound West. The District Court also found that Rhines 

dgreed respondent would not have to move from St. Paul until 

June 5, so his children could finish scl?ool. Respondent 

would then start work as soon as he was settled. 

On April 28, 1978, respondent went to the Missoula 
Job 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 also noted that Sound West 

was paying for the move. 

In early June respondent rented a truck and moved his 

famlly and their belongings to Missoula. On June 9, 1978, 

respondent went to the Sound West store and told Rhines that 

hls housing arrangements had not worked out and he would not 

be able to begin work for two weeks. Respondent testified, 

and the District Court found, that Rhines advised respondent 

to do what he had to do to settle in and then report for 

work later in the month. 

On or about June 21, 1978, respondent returned to the 

Sound West store and requested a date to start work. Rhines 

sent respondent to Sound West ' s accountant. The accountant 

dld not give a specific date for respondent to start work 

dnd said he would contact respondent the following week. 

Respondent continued to call and 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 lob at Sound West. 

Respondent then began looking for other work in 

Mlssoula. He received temporary work in January 1979. In 

March 1979 he received permanent employment as an accountant 

with the University of Montana, where he remains employed. 

The District Court concluded that under the above 

facts Jim Rhines, as the president and manager of Sound 
West, 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 to pay salary and benefits, and failing 

to allow respondent to perform his employment. 

The District Court concluded that respondent had been 

hired on a month-to-month basis and awarded respondent 

$1,000 in one month's salary; $1,754 in moving expenses were 

also awarded 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, to respondent's breach of 

contract action? 

3. Did the Dlstrict Court err by holding appellant 

Jim Rhines liable for respondent'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, for a redetermination 

of damages. 

Appellants contend under the first issue that the 
statement "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 in June 197b only if he 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 in a nonjury case. 

harris v. Harrls (1980), - Mont. - , 616 P.2d 1099, 1102, 

37 St.Rep. 1696, 1699. This Court will not disturb a judgment on appeal where substantial evidence to support the 

judgment appears on the record. See, Keil, 614 P.2d at 505, 

and cases cited therein. 

Here, the evidence supports the District Court's conclusion that an agreement was reached between respondent and 

Rhines. The District Court was in the best posltion to weigh 

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 to Missoula at a great expense. 

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 totally noncommittal. He did not tell respondent 

at that time he did not have a job. Instead, Rhines referred 

respondent to Bawley, 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-arting date and Hawley asked him to 

return later. 

The above facts amply support the District Court's 

conclusion that a contract was entered into between 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 is well- taken. 

In sect.ion 39-3-201, MCA, "employ," "employee," 

"employer" and "wages" are defined for this part.: 

"(2) 'Employ' means permit or suffer to work. 

" (3) 'Employee' includes any person who works 

for another for hire. 

"(4) 'Employer' includes any individual, 

partnership, association, corporation, 

business trust, legal respresentative, or any 

organized group of persons acting directly or 

indirectly in t-he interest of an employer in 

relation to an employee but shall not 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-ies of any kind." (Emphasis added. ) 

Respondent was not an employee within the meaning of 

the statutes. He never actually performed work for Sound 

West. 

Further, t.he general provision of sect ion 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 no person 

for whom labor has been performed may wit-h- L .. hold from any employee any wages earned or - - 

unpaid for a- longer period t.han 10 business 

days after the same are due . . ." 

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 attorney fee and 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 policy of 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 to dissuade an 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 

attorney fees and 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.he measure of damages, except when 

otherwise expressly provided by this code, is 

the amount which will compensate the party 

aggrieved for all the det-riment which was 

proximateiy caused thereby or in t.he ord inary 
course of things would be likely to result 

therefrom. Damages which are not clearly 

ascertainable in both their nature 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 will give 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), 157 Mont.. 121, 483 P.2d 699; and 

Whitney v. Bails (1977), 172 Mont. 121, 560 P.2d 1344. We 

acknowledged in Wyatt. that the measure of damages for breach 

of an employment contract by an employer is prima facie t-he 

sum stipulated t.o be paid for the services. More importantly, however, we also noted that ot-her expenses, such as 

those incurred while seeking alt.ernative employment., may 

also be 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 as a 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." (Conclusion of Law 

No. 2.) The District Court t.hen went on to conclude that 

Jim Rhines - and Sound West, Inc., breached the employment 

contract and that both Rhines and Sound West were liable for 

the damages arising out of this breach. 
This Court has recognized the general rule that an 

agent is not personally liable on a contract entered into by 

him on behalf of his principal if it appears, in fact, that. 

he disclosed the identity of his principal and made the 

engagement for him. 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 that where an agent enters into a 

contract in his own name for an undisclosed 

principal, the other party to the contract 

may hold the agent personally liable, applies 

equally well to corporate officers or agents. 

It has been held that the managing officer of 

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 

fails to inform the latter of the facts. ' 3 

Fletcher's Cyclopedia on 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 the 
agency was disclosed during the course of this litigation, 

the disclosure of the principal after the contract is 

executed will not relieve the agent. from liability. MyersLeiber Sign Co., supra, 410 P.2d at 493. 

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 

doing business as Sound West, it cannot be said t-he District 

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 accordance with this opinion. 

We concur : 

Chief Justice 

I would affirm the District