Allen v. Phinney Oil Co.

• Decision Date: 01 October 1962
• Docket Number: No. 17967,17967
• Citation: 241 S.C. 173,127 S.E.2d 448
• Parties: Mrs. Shirley B. ALLEN, Randall Keith Allen and Gary Eugene Allen, Jr., Respondents, v. PHINNEY OIL COMPANY and Greenville Transport, Inc. and Employers Mutual Liability Insurance Company, of Whom Greenville Transport, Inc. and Employers Mutual Liability Insurance Company are, Appellants.
• Court: South Carolina Supreme Court

Page 448

127 S.E.2d 448

241 S.C. 173

Mrs. Shirley B. ALLEN, Randall Keith Allen and Gary Eugene Allen, Jr., Respondents, v. PHINNEY OIL COMPANY and Greenville Transport, Inc. and Employers Mutual Liability Insurance Company, of Whom Greenville Transport, Inc. and Employers Mutual Liability Insurance Company are, Appellants.

No. 17967.

Supreme Court of South Carolina.

Oct. 1, 1962.

O. L. Long, Laurens, Leatherwood, Walker, Todd & Mann, Greenville, for appellants.

J. Perrin Anderson, Marvin R. Watson, Greenwood, for respondents.

TAYLOR, Chief Justice.

This is a Workmen's Compensation case.

Claimants are the widow and two minor children of Gary Eugene Allen deceased. The Hearing Commissioner found that the Industrial Commission lacked jurisdiction of the parties in that Allen when hired was not covered under the Workmen's Compensation Act and that this relationship of noncoverage under the act between the employer and employee continued until Allen's death. The Full Commission by unanimous opinion affirmed the opinion of the Hearing Commissioner. The Circuit Court reversed the Commission's finding as to jurisdiction and held that defendants, Greenville Transport, Inc., and Employers Mutual Liability Insurance Company were liable to claimants in the sum of $10,000.00.

At the time of the death of Gary Eugene Allen, June 20, 1958, his employer, George L. Phinney of Laurens, South Carolina, d/b/a Phinney Oil Company, was engaged in business as a petroleum products 'jobber' distributing Phillips 66 Petroleum products. Having only three employees, the Phinney Oil Company was not subject to the provisions of the Workmen's Compensation Act.

Plaintiffs contend that Allen was initially employed by the Phinney Oil Company, Inc., hereinafter referred to as the Corporation, the President and General Manager of which was George L. Phinney. Defendants claim that Allen was never the employee of the corporation or its successor, Greenville Transport, Inc., both of which were at one time covered by the Workmen's Compensation Act.

It is undisputed that Allen never worked for Greenville Transport, Inc.; however, the question presented is whether Allen began his employment with George L. Phinney, d/b/a Phinney Oil Company, or with the Corporation; and being jurisdictional, the findings of fact by the Commission relative thereto are not conclusive on appeal and both this Court and the Circuit Court have the power and duty to review the record and decide the jurisdictional question in accord with the preponderance of the evidence. Miles v. West Virginia Pulp & Paper Co., 212 S.C. 424, 48 S.E.2d 26; Watson v. Wannamaker & Wells, Inc. et al., 212 S.C. 506, 48 S.E.2d 447; Holland v. Georgia Hardwood Lumber Co., 214 S.C. 195, 51 S.E.2d 744; Horton v. Beruch, 217 S.C. 48, 59 S.E.2d 545; Brown v. Moorhead Oil Company et al., 239 S.C. 604, 124 S.E.2d 47.

The Corporation was formed February 17, 1953, approximately 2 1/2 years after Phinney had commenced business in his individual capacity, as Phinney Oil Company, in Laurens, South Carolina, distributing Crown Petroleum products. Phinney permitted the Corporation to use his distribution facilities in Laurens and the Corporation continued to distribute Crown products. Mr. Phinney owned approximately 30% and a Mr. Bruce approximately 70% of the Corporation. The Corporation did not have as many as 15 employees but, nevertheless, elected to come under the Workmen's Compensation Act. This was accomplished, according to the records of the South Carolina Industrial Commission, by agreement dated March 29, 1953. Said agreement was signed by George L. Phinney, as employer, and not as an officer of the Corporation and was in the name of Phinney Oil Company and not in the name of the Corporation. It is agreed, however, that this was an act of the Corporation. The insurance carrier was Employers Mutual Liability Insurance Company of Wisconsin, which Company carried liability insurance in compliance with the act from March 20, 1953, until March 20, 1958.

Allen immediately prior to his employment by George Phinney on October 5, 1957, operated a small station owned by Phinney near the distribution plant in Laurens. Mr. Phinney stated that the Crown products were sold to Allen on credit and that Allen was his own boss and did not receive a salary or commission. For approximately 1 1/2 years prior to this, Allen operated a different station in Laurens, distributing the Corporation's Crown products. This station was owned by a third party who leased it to George Phinney. Phinney, in turn, rented it to the deceased.

Messrs. Phinney and Bruce testified that the Corporation stopped doing business October 1, 1957, due to the fact that Phinney wanted to change to Phillips 66 products and Mr. Bruce wanted to continue distributing Crown products. At that time, according to the testimony, Mr. Phinney sold out to Mr. Bruce and retained the distributing plant and acquired the service station outlets in and around Laurens, South Carolina, for his share in the Corporation. Mr. Bruce retained the 'rolling stock' and formed Greenville Transport, Inc., a corporation doing business as a petroleum products 'jobber' for Crown Petroleum products with offices in Greenville, South Carolina. Greenville Transport, Inc., had insurance coverage with the same carrier as the Corporation filed with the Industrial Commission in compliance with the Workmen's Compensation Act from March 7, 1958, to March 7, 1959, an overlapping of approximately 13 days with the coverage of the Corporation. This insurance was in effect on June 20, 1958, at the time of the decedent's accidental death.

Phinney testified that he d/b/a Phinney Oil Company commenced operation in his individual capacity, under contract, distributing Phillips 66 products on October 1, 1957.

Plaintiffs take the position that Allen was actually employed by the Corporation on October 5, 1957, and rely upon the case of Holloway v. Cooley & Sons, 208 S.C. 234, 37 S.E.2d 666, wherein the original employer was held to be liable to the employee when there had been a change in the ownership and the employee had not been put on notice of the change of employer. The employee is not chargeable with the legal consequences of the arrangement between the employers except as is known and approved by him. The burden of proving the relationship of employer and employee is upon the claimants.

'Before the provisions of the Workmen's Compensation Act can become applicable, the relation of master and servant, or employer and employee, or some appointment must exist. This is the initial fact to be established * * *.

'In a proceeding of this kind * * * the burden of proving the relationship of employer and employee is upon the claimants, who are the father and mother of the decedent. And this proof must be made by the greater weight of the evidence. * * *' Holland v. Georgia Hardwood Lumber Co., 214...