Case Name: Jimmy COOPER, Appellant, v. McDEVITT & STREET COMPANY, and The Travelers Insurance Company, Respondents
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1973-05-14
Citations: 260 S.C. 463
Docket Number: 19628
Parties: Jimmy COOPER, Appellant, v. McDEVITT & STREET COMPANY, and The Travelers Insurance Company, Respondents
Judges: Lewis and Littlejohn, JJ., concur.
Reporter: South Carolina Reports
Volume: 260
Pages: 463–475

Head Matter:
19628
Jimmy COOPER, Appellant, v. McDEVITT & STREET COMPANY, and The Travelers Insurance Company, Respondents
(196 S. E. (2d) 833)
Rogers W. Kirven, Esq., of Florence, for Appellant,
Messrs. Belser, Kemmertin & Ravenel, of Columbia, for Respondents,
May 14, 1973.

Opinion:
Moss, Chief Justice:
This is a proceeding under the Workmen's Compensation Act, Section 72-1, et seq., of the 1962 Code. There is here involved an appeal from an order of the Circuit Court reversing an award of the Industrial Commission in favor of Jimmy Cooper, the appellant herein.
The appellant alleges that on February 17, 1971, while employed as a welder by McDevitt & Street Company, a respondent herein, he sustained a low back injury by accident, arising out of and in the course of his employment.
Liability for compensation was denied by his employer and its insurance carrier, The Travelers Insurance Company, respondents herein, on the ground that the appellant had intentionally misrepresented and concealed in his preemployment application a previous back injury which he had sustained while working for another employer. They further denied by reason thereof that he was an employee within the meaning of Section 72-11 of the Code.
A hearing was convened by a Single Commissioner to determine whether or not the appellant was an employee of McDevitt & Street Company within the meaning of the Act at the time he received a back injury on February 17, 1971. Thereafter, this commissioner filed an opinion and an award in which it was found that the appellant was an employee of McDevitt & Street and was entitled to compensation for his injury. The respondents by appropriate exceptions, appealed from the award of the Full Commission to the Circuit Court of Richland County, and such appeal was heard before the Honorable John Grimball, Resident Judge, who issued his order vacating and reversing the award. The appeal is from this order.
We have held that before the provisions of the Workmen's Compensation Act can become applicable, the relation of master and servant, or employer and employee must exist. The issue of whether the appellant was an employee of McDevitt & Street is jurisdictional and is subject to judicial review even though the commission has found that he was an employee. Chavis v. Watkins, 256 S. C. 30, 180 S. E. (2d) 648.
It is a fact that on February 27, 1967, while in the employ of the Benjamin F. Shaw Company, the appellant sustained a serious injury to his back, a ruptured disc, and as a result of such, had been out of work for ten months and had received a lump sum award of $5,000.00 from the Industrial Commission for that injury. The diagnosis as to this injury was that there were findings of nerve root irritation or pressure with the primary problem being "acute lumbo-sacal strain with the possibilities of a herniated disc." The appellant was given a fourteen per cent partial permanent disability to the lumbar spine.
The appellant testified that he was actually out of work thirteen months following his injury while working for B. F. Shaw Company. Thereafter, he worked as a welder on various jobs for various employers. In September, 1970, the appellant went to work as a welder for McDevitt & Street on a job at the St. Francis Hospital in Charleston, South Carolina. The appellant testified that he had a back problem and could do no heavy work or lifting and he so stated in his pre-employment application for work on the Charleston job. His employment on the Charleston project was termi nated following the Christmas holidays when he reported to work two or three days late. He says that it was suggested that he come to Columbia and make an application for work there as a welder. At that time McDevitt & Street were engaged in enlarging the football stadium of the University of South Carolina.
It appears that McDevitt & Street employed the appellant as a welder on the stadium job pursuant to a pre-employment application, dated January 5, 1971. While so employed, the appellant, on February 17, 1971, sustained a low back injury while he and another employee were attempting to lift a long angle iron. He says while moving such angle iron, it slipped and jerked his back. The physicians who examined the appellant diagnosed his injury as an acute lumbo-sacral strain but with no evidence of a true ruptured disc.
The evidence shows that the appellant in his pre-employment questionnaire was asked the question, "Have you now or have you ever had . . . back trouble?", and his answer thereto was "No".
Admittedly, the foregoing answer of the appellant was false, intentional and a material misrepresentation. We quote with reference thereto the testimony of the appellant as follows:
"Q. Why didn't you tell them that you had a back injury up here?
"A. Because I found out that if they knew it up here, I was going to get fired off the job. The business agent had told me if they found it out I was gone.
"Q. The business agent is your union man?
"A. Yes, sir."

"Q. Mr. Cooper, you said that the reason you filled out the identification and pre-employment questionnaire, which I show you here for your examination, the reason that you filled it out that you did not have any back trouble is be cause if you knew you told them that they wouldn't hire you? Is that right?
"A. Yes, sir.
"Q. Then you do admit that you did deceive them as far as your physical condition at this job site up here?
"A. On this job here, yes, sir. I did.
"Q. So you purposely did it in order to get a job?
"A. In order to keep my job, yes, sir."
The Assistant Superintendent on the Columbia job testified that he did not have access to the application filed by the appellant on the Charleston job and that.when employment is terminated on one job, such employee is not transferred to another job. If such employee desires reemployment on another job he files a new application and is hired or rejected on the basis thereof. He also testified that he would not have hired the appellant had he not misrepresented his physical condition. He further testified that he relied on the application of the appellant as being true and such was a material factor in the hiring.
The issue here is whether the appellant is'' entitled to recover workmen's compensation for his injury when he knowingly and intentionally falsified his pre-employment questionnaire as to his previous back injury.
The general rule is that the following factors must be present before a false statement in an employment application will bar benefits: (1) The employee must have knowingly and wilfully made a false representation as to his physical condition. (2) The employer must have relied upon the false representation and this reliance must have been a substantial factor in the hiring. (3) There must have been a causal connection between the false representation and the injury. 1A Larson's Workmen's Compensation Law, Section 47.53. The foregoing rule is followed and applied in the cases of Martin Company v. Carpenter, Fla., 132 So. (2d) 400; City of Miami v. Ford, Fla., 252 So. (2d) 228; Air Mod Corp. v. Newton, Del., 215 A. (2d) 434; and Volunteers of America of Madison v. Industrial Commission, 30 Wis. (2d) 607, 141 N. W. (2d) 890. See also 136 A. L. R., p. 1124.
There is ample evidence to sustain the finding of the trial judge that the appellant was guilty of fraud in securing his employment through false representation as to his previous back injury and that the employer would not have hired him had he not misrepresented his physical condition.
It is the position of the appellant that the evidence on the issue of causal connection was so indefinite as to require that this case be remanded to the Commission for the purpose of a specific factual finding thereon. We agree that neither the Board nor the Trial Judge has made any specific finding of whether or not there was a causal connection between the false representation made by the appellant and his subsequent injury. Accordingly, the case must be remanded to the Commission for the taking of testimony on this issue and for the making of a finding of fact in connection therewith.
The fact that the appellant knowingly and wilfully made a false representation as to his physical condition thereby inducing his employment, did not make the contract for his services void, but voidable; and the employer, having been deceived, could terminate the contract whenever it discovered the deception. The testimony in behalf of the respondents shows that when it was discovered that the appellant had falsified his application, his contract of employment was immediately terminated.
The appellant contends that his employer had no right to rely on the misrepresentation as to his previous injury for the reason that while working on the Charleston job he had there told two supervisory employees that he had a back injury. One of these employees testified that, subsequent to his employment, the appellant told him that he had some trouble with his back. The application by the appellant for employment on the Charleston job does not reveal that he had previously had back trouble. Admittedly, the employer was engaged in construction contracts in many places. It is clear from the record that the two supervisory employees in Charleston had nothing to do with the employment of the appellant on either the Charleston or the Columbia job, such not being within the scope of the authority of either. Even though the Commission stated that the employer could have, with little difficulty, checked out with the Charleston office the application of the appellant for employment, there was nothing in his application to alert his employer in Columbia that he had a previous back injury. The employer, in the absence of notice to the contrary, had the right to assume the truthfulness of the statements contained in the appellant's application.
The rule as to notice to an agent in its application to the facts here is stated in 3 C. J. S., Agency, § 264, p. 197, as follows:
"The rule that notice to an agent is notice to his principal is not applicable unless the notice has reference to business in which the agent is engaged under authority from the principal, and is pertinent to matters coming within that authority; and hence a principal is not affected with knowledge . . . which relates to matters not within the scope of his (agent's) authority. . . . Where an agent is in no way connected with the transaction, his knowledge of facts concerning it will not be imputed to the principal."
The knowledge of the two supervisory employees in Charleston that the appellant had a previous back injury cannot be imputed to the employer because the information received by them was not pertinent to matters coming within their authority.
The judgment of the lower court is, accordingly, reversed and the cause remanded for the purpose stated.
Lewis and Littlejohn, JJ., concur.
Bussey and Brailsford, JJ., dissent.