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TOMMIE LEE FORD v. LAMAR LIFE INSURANCE COMPANY

MAY 02, 1984

TOMMIE LEE FORD
v.
LAMAR LIFE INSURANCE COMPANY



BEFORE PATTERSON, C.J., PRATHER AND ROBERTSON, JJ.

PATTERSON, CHIEF JUSTICE, FOR THE COURT:

Tommie Lee Ford filed a bill of complaint against the Lamar Life Insurance Company, in the Chancery Court of Quitman County on December 28, 1981. She sought $100,000.00 in benefits pursuant to an alleged policy of insurance on the life of her husband, John B. Ford. Lamar Life interposed a general demurrer to the bill of complaint which was sustained and the complainant declining to plead further, the cause was dismissed with prejudice. Aggrieved, Mrs. Ford appeals to this Court.

She assigns as error the action of the trial court in sustaining appellee's demurrer and dismissing her bill of complaint. Therefore, the only facts before the trial

 court or this Court are those which were well pled in the bill of complaint.

 The appellant alleged that W. D. Gooch, an agent of Lamar Life Insurance Company, contacted John B. Ford, her husband, with reference to a $100,000 life insurance policy. Thereafter, May 18, 1981, Ford completed one of the appellee's applications wherein Tommie Lee Ford, the complainant, was named the primary beneficiary. This application and a check for $2,512.00 which had been received from John B. Ford as the first annual premium payment was forwarded to the home company. At the time the application was completed and signed by Ford and the payment received by Gooch, Ford was issued a conditional receipt. In addition Lamar Life required a medical examination of the applicant and such was conducted by Dr. M. B. Lynch on May 21, 1981.

 On June 2, 1981, John B. Ford, the applicant, was killed in an automobile accident. At the time of his death no policy had been issued on his life by Lamar Life Insurance Company.

 Thereafter the complainant filed her claim for benefits for which her husband had made application and paid the first annual premium. The claim was denied by Lamar Life and the amount paid for the premium, plus interest, was tendered to the appellant. This suit followed.

 The complainant alleged the conditional receipt issued by Lamar Life to John B. Ford at the time he made application for a life insurance policy and paid the first annual insurance premium therefor was to be in full force and effect on the date of the medical examination, May 21, 1981. It is then alleged that a temporary contract of insurance was created when the defendant accepted the applicant's premium payment and issued its conditional receipt. It is next asserted this temporary contract imposed liability upon the defendant for the sum of the insurance applied for until the defendant either accepted or rejected the application. There follows an averment that since the policy was not rejected during Ford's life time, the temporary contract was in force and payable at the time of his death on June 2, 1981.

 It is next alleged (or concluded) that had the defendant not intended there be insurance during the pendency of the application and medical examination, there would have been no reason for Ford to pay the premium as the company would receive it without assuming any

 obligation or risk and such would be inequitable and against public policy.

 The issues presented embrace the language of the application signed by Ford and the conditional receipt issued by Lamar Life upon receipt of the application and the premium payment. The application in pertinent part follows:

 (APPLICATION)

 REPRESENTATION AND AGREEMENT: The undersigned represent and agree: 1. * * * 2. No insurance shall be in force (except as may be provided in a Conditional Receipt bearing the same number as this application) until the policy has been delivered during the lifetime of persons proposed for insurance (subsequent to the payment of the full first premium), and at which time the Proposed Insured and Owner have no knowledge of any facts regarding any persons proposed for insurance which would require different answers to the questions contained in this application; whereupon, the policy will be effective as of its date of issue.

 The language of the application appears to us to be without ambiguity. It states in no uncertain terms that no insurance shall be in force until the policy has been delivered during the lifetime of the persons proposed for insurance. Written into this statement in similar clear language is an exception that may come into being by the terms of the conditional receipt. This, of course, moves our attention to the conditional receipt because it has the potential of changing ...


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