WALKER, C.J., FOR THE COURT:
On December 28, 1981, Tommie Lee Ford, widow of John Ford, filed a complaint against Lamar Life Insurance Company in the Chancery Court of Quitman County. She alleged that her husband, at the time of his death, was covered by a $100,000.00 life insurance policy by virtue of a temporary contract of insurance with Lamar Life. The trial court sustained Lamar Life's demurrer, and Tommie Lee Ford appealed to this Court. We reversed the chancery court's judgment and remanded the cause for a trial on the merits. Ford v. Lamar Life Insurance Company, 449 So.2d 1204 (Miss.1984). After trial, the Chancery Court of Quitman County, finding that John Ford had not been insurable as a standard risk, entered judgment for Lamar Life. From that judgment Tommie Lee Ford has appealed. We affirm.
John Ford was a sixty-five (65) year old farmer who, along with his wife Tommie Lee, had lived in Quitman County for more than forty (40) years. The Fords were acquainted with William D. "Bill" Gooch, a Lamar Life general agent, who also lived in Quitman County. John Ford and Gooch had on occasion discussed John's need for life insurance, and on May 18, 1981, John Ford submitted to Gooch an application for a $100,000.00 life insurance policy with Lamar Life. The application provided, "No agent or any other person except an Officer of the Company, has power to make, modify or discharge any insurance contract, or to bind the Company by making any promises respecting any insurance contract." Along with the application John Ford gave Gooch a check in the amount of $2,512.00 for the first
annual premium. Gooch gave Ford a conditional receipt which read as follows:
THIS RECEIPT DOES NOT PROVIDE ANY INSURANCE UNTIL AFTER ITS CONDITIONS ARE MET. NO AGENT HAS ANY AUTHORITY TO WAIVE OR ALTER THE PROVISIONS OF THIS RECEIPT.
Received from John B. Ford in connection with an application for insurance bearing the same number as this receipt the sum of $2,512.00 in connection with life insurance or annuity applied for and $______________ in connection with health insurance applied for.
If the payment is for the full first premium at the payment interval selected on the insurance applied for, the insurance will be effective in accordance with the provisions of this receipt.
This receipt is void if the payment acknowledged is:
1. less than such first premium or
2. by check which is postdated or not honored upon presentation.
EFFECTIVE DATE IF INSURABLE AS APPLIED FOR
If the Company finds to its satisfaction that all persons proposed for insurance were insurable as standard risks on the effective date under the Company's rules for insurance on the plan and for the amount applied for, the insurance shall be in effect on the latest of the following dates:
1. The date, if any, requested in the application.
2. The date of the last medical exam required by the Company.
3. The date of the application.
The day he received this receipt, John Ford underwent
the first of several medical tests used to diagnose diabetes. Because these test results were crucial to Lamar Life's determination of insurability, an explanation of the tests is appropriate at this point. When a urinalysis is performed, the urine specimen may be tested for sugar by the "TesTape" method. A strip of treated tape is dipped into the specimen of urine, and a physician may make a preliminary determination of the amount of sugar in the urine based on the color produced on the tape. Results of this test are measured on the following scale:
trace a trace of sugar, which is often present even in normal specimens
1 Although no specific significance is given for these readings, they do indicate
2 that sugar is present in the urine, and the higher the number, the more sugar in
3 the urine. It is undisputed that "3" is abnormally high.
If the TesTape reveals a high concentration of sugar in the urine, physicians often perform a test which is more exact, i.e., a microscopic analysis of the urine specimen. The results of this test are described in terms of X grams of sugar per 100 milliliters of urine. For example, a result of 0.5 gm. % on this test would indicate that the specimen contained 0.5 grams of sugar per 100 milliliters of urine. On this test, a result of 0.3 - 0.5 gm. % would be normal, but a result of 1.10 gm. % would be abnormally high.
Although these urine tests are often used to determine whether further tests are necessary, the urine tests themselves are not considered very accurate. The record indicates that a physician would not use a urine test to make a positive diagnosis of diabetes. Instead he would require a blood sugar test. Moreover, an insurance company which had received a urine sugar result of 1.10 gm. % on an applicant would require blood sugar tests before being satisfied that the applicant was insurable. The reason that a blood test is required for a diagnosis of diabetes is this: sugar in the urine is only a reflection, and sometimes an inaccurate one, of sugar in the blood, the latter of which is the true indicator of diabetes and related problems.
The meaning of blood sugar readings varies depending on whether the test is a fasting blood sugar (FBS), a blood sugar one hour after a meal, or a blood sugar two hours after a meal. The upper limits of normal for an FBS would be in the range 130-140, while blood sugars taken after a meal would normally be higher. Any blood sugar over 200 is considered abnormal, regardless of when taken.
In a physical examination conducted in 1980 (not related to the 1981 application for insurance) John Ford showed a fasting blood sugar of 137. This reading is normal, by medical standards, for a sixty-five (65) year old man. Whether it is normal by underwriting standards is discussed hereinafter.
On May 18, 1981, John Ford went to the office of Dr. M. B. Lynch, who was the Fords' family physician and who performed Lamar Life's physical examinations for insurance purposes in Quitman County. The examination was to be conducted at Lamar Life's expense. Because the tests done that day revealed a urine sugar level of 3 and a blood sugar level of 250 (both abnormally high), the examination was postponed. Believing that the high levels of sugar could have resulted from Ford's eating too many sweets, Dr. Lynch instructed Ford to "eat right" and come back in a few days. Lamar Life did not learn of these results until pre-trial discovery, i.e., these results were not considered in determining insurability.
On May 21, 1981, John Ford returned to Dr. Lynch's office for the examination. Tests revealed urine sugars of 3 and 1.10 gm. % (both abnormal and both reported to Lamar Life) and blood sugar of 230 (abnormal; not requested by, or reported to, Lamar Life). Based on these results, Dr. Lynch put Ford on a 2500 calorie per day diet recommended by the American Diabetes Association.
Because these test results were abnormally high, Lamar Life requested that Gooch 1) obtain another urine test and 2) have Ford complete a "diabetic questionnaire." A TesTape test (the scale for which is 0, trace, 1, 2, 3) was conducted on May 29, 1981, and revealed a trace of sugar in John Ford's urine. This result, which was sent to Lamar Life, caused Dr. Lynch to believe that John Ford's "diabetes was going away." No blood test was done that day because Dr. Lynch wanted to wait "until it stayed down a while and then run a blood sugar."
On June 1, 1981, Gooch, apparently having learned
of the "trace" result, went to the Ford residence at approximately 6:30 a.m. Tommie Lee Ford testified that she did not know whether Gooch had planned to visit them that morning, or whether he had been out for his morning exercise and had decided to stop. In any event, Gooch, told the Fords that John's specimen was clear, and that he was insured.
The following day John Ford was killed in an automobile collision. The day after Ford's death Lamar Life closed its file on him. Although it is not clear when Tommie Lee Ford filed a claim on the policy, the record indicates that on June 29, 1981, Jack P. Dean, President of Lamar Life, wrote to Tommie Lee Ford, denying coverage and ...