Foster v. Aetna Life Insurance Co.

Full title: CLARA LOUISE FOSTER v. AETNA LIFE INSURANCE COMPANY of Hartford…

Court: Supreme Court of Missouri, Division One

Date published: Jan 3, 1944

352 Mo. 166 (Mo. 1944)

176 S.W.2d 482

Opinion

No. 38522.

November 1, 1943. Rehearing Denied, December 6, 1943. Motion to Transfer to Banc Overruled, January 3, 1944.

1. RELEASE: Insurance: Release of Insurance Claim: Lack of Consideration. A release of an accidental death insurance claim for less than the face amount of the policy is not based on a valid consideration unless the insurance company had made a reasonable investigation and had ascertained facts or evidence which would cause a reasonable person to have an honest doubt that death was due to accident. And the question depends upon the facts or evidence within the possession of the insurance company at the time the release was executed, not at the time of trial.

2. RELEASE: Insurance: Trial: Lack of Consideration: Burden of Proof. Since the reply admitted the execution of the release of plaintiff's claim on the insurance policy the burden of proof to establish lack of consideration was on plaintiff. But substantial evidence of accidental death made a prima facie case and shifted the burden of the evidence to defendant as to its good faith in claiming nonliability. But the burden of proof, upon all the evidence, remained with plaintiff.

3. RELEASE: Insurance: Trial: Lack of Consideration: Evidence Showed Accidental Death: Size of Settlement as Evidence of Bad Faith. The medical reports which the insurance company had at the time of the settlement and the execution of the release by plaintiff pointed to accident as the cause of death and did not justify a reasonable belief that death was due to disease. An accidental injury which aggravated a previous disease and hastened death would come within the provisions of an accidental death policy. And the trial court was not bound to accept as true the testimony of defendant's insurance adjuster that one of the physicians had made a prior verbal report of death from disease. And the large percentage paid in settlement after prior offers of much less was some evidence of lack of faith in the claim of nonliability.

4. RELEASE: Insurance: Trial: Instruction Gave Jury Roving Commission. Plaintiff's instruction as to setting aside the prior release executed by plaintiff was erroneous because it gave the jury a roving commission to invalidate the release upon their own view as to the legal question of what would constitute a valid legal defense. And a correct defense instruction did not cure the error.

Appeal from Circuit Court of City of St. Louis. — Hon. William S. Connor, Judge.

REVERSED AND REMANDED.

Sullivan, Finley Lucas for appellant; Oliver R. Beckwith and Berkeley Cox of counsel.

(1) Where the evidence makes a case for a jury as to the liability on an insurance policy, and such question gives rise to a dispute which is the basis of a settlement and release, the dispute constitutes a sufficient consideration for the release. This is true in this case, even though the amount due under the policy is liquidated, because it is admitted that the defendant denied liability in any amount. Stierman v. Meissner, 253 S.W. 383; State ex rel. Isaacson v. Trimble, 72 S.W.2d 111, 335 Mo. 213; State ex rel. United Commercial Travelers v. Shain, 98 S.W.2d 597, 339 Mo. 903; Helling v. United Order of Honor, 29 Mo. App. 309; Sheppard v. Travelers Protective Assn., 124 S.W.2d 528, 233 Mo. App. 602. (2) The term "good faith," in a case of this kind, means without fraud or deceit. Sheppard v. Travelers Protective Assn., 104 S.W.2d 784; 28 C.J. 716; 18 Words Phrases, p. 478. (3) Good faith is presumed, and the burden was on the plaintiff to set aside the release. Williams v. American Life Accident Ins. Co., 112 S.W.2d 909; Sheppard v. Travelers Protective Assn., 104 S.W.2d 784; Wood v. K.C. Home Tel. Co., 223 Mo. 537; Sheppard v. Travelers Protective Assn., 233 Mo. App. 602, 124 S.W.2d 528. (4) The court erred in giving Instruction 4, on the part of the plaintiff, because such instruction submits questions of law, and gives the jury a roving commission to invalidate the release for any reason that the jury might see fit to adopt, regardless of pleadings or evidence and the law of the case. Said instruction is also confusing, and submits no facts for determination by the jury. Ampleman v. North Britis M. Ins. Co., 35 Mo. App. 317; Buffington v. South Mo. Land Co., 25 Mo. App. 492; Gillioz v. State Highway Comm., 153 S.W.2d 18; Macklin v. Fogel Const. Co., 31 S.W.2d 14, 326 Mo. 38. The error was not cured by other instructions. State ex rel. Jefferson City v. Shain, 124 S.W.2d 1194, 344 Mo. 57; State ex rel. Railway Co. v. Shain, 108 S.W.2d 351, 341 Mo. 733; State ex rel. Fourcade v. Shain, 119 S.W.2d 788, 342 Mo. 1190. (5) The evidence wholly fails to authorize a finding that the denial of liability by the defendant was unfounded, and the court erred in submitting to the jury the question of vexatious refusal to pay. Bandy v. East West Ins. Co., 163 S.W.2d 350; State ex rel. v. Allen, 295 Mo. 307, 243 S.W. 839; St. Clair v. Washington Fid. Natl. Ins. Co., 89 S.W.2d 85.

Alexander M. Goodman and A.B. Frey for respondent; Frey Korngold of counsel.

(1) There could not have been a denial of liability in good faith. Fetter v. Fidelity Cas. Co., 174 Mo. 256, 73 S.W. 592; Wheeler v. Fidelity Cas. Co., 298 Mo. 619, 251 S.W. 924; State ex rel. Prudential Ins. Co. v. Shain, 344 Mo. 623, 127 S.W.2d 675; Kahn v. Metropolitan Cas. Co., 240 S.W. 793; Elbe v. John Hancock Mut. Life Ins. Co., 155 S.W.2d 302; Smith v. Washington Natl. Ins. Co., 91 S.W.2d 169; Roberts v. Woodman Acc. Co., 233 Mo. App. 1058, 129 S.W.2d 1053; Schepman v. Mutual Benefit H. A. Assn., 231 Mo. App. 651, 104 S.W.2d 777; Hooper v. Standard Life Acc. Co., 166 Mo. App. 209, 148 S.W. 116; Driskell v. U.S. Health Acc. Co., 117 Mo. App. 362, 93 S.W. 880; Freeman v. Accident Assn., 156 Mass. 351, 30 N.E. 1013. (2) In determining the propriety of the ruling of the trial court on a demurrer to the evidence, the appellate court will accept as true all the evidence tending to support the verdict, together with all favorable inferences therefrom and will disregard all evidence and inferences to the contrary. Stevens v. Meadows, 340 Mo. 252, 100 S.W.2d 281; McKeighan v. Klines, 339 Mo. 523, 98 S.W.2d 555; Foster v. Kurn, 234 Mo. App. 909, 133 S.W.2d 1114; Pabst v. Ambruster, 91 S.W.2d 652; Hinds v. Chicago, B. Q.R. Co., 85 S.W.2d 165. (3) After the death of an insured, payment by the insurer to the beneficiary of less than the amount due on a life or accident policy does not constitute payment in full unless there is a dispute by the insurer as to its liability, based upon substantial grounds and in good faith, notwithstanding that a release is given by the beneficiary to the insurer, for there is no valuable consideration for such release. A mere sham or pretended dispute, or a dispute in bad faith will not suffice to exonerate the insurer. Accord and Satisfaction, 1 C.J. 55, sec. 75; Compromise and Settlement, 12 C.J. 367, sec. 82; Head v. N.Y. Life Ins. Co., 241 Mo. 403, 147 S.W. 827; Williams v. American Life Acc. Co., 112 S.W.2d 909; Smith v. Washington Natl. Ins. Co., 91 S.W.2d 169; Nelson v. Standard Life Ins. Co., 112 S.W.2d 901; Schreiber v. Cent. Mut. Ins. Assn., 108 S.W.2d 1052; Brizendine v. Cent. Life Ins. Co., 234 Mo. App. 460; 131 S.W.2d 906; Lynn v. Business Men's Assurance Co., 232 Mo. App. 842, 111 S.W.2d 231; Fowler v. Mo. Mut. Assn., 86 S.W.2d 946; Roberts v. Woodmen Acc. Co., 233 Mo. App. 1058, 129 S.W.2d 1053; Mills v. Amer. Mut. Assn., 151 S.W.2d 459; Friedman v. State Mut. Life Assur. Co., 108 S.W.2d 156; Limbaugh v. Monarch Life Ins. Co., 84 S.W.2d 208; Biddlecom v. Gen. Acc. Assur. Co., 167 Mo. App. 581, 152 S.W. 103. (4) By "good faith" is meant "an honest intention to abstain from taking any unconscientious advantage of the beneficiary, together with an absence of all information, notice or belief of facts which would render the transaction unconscientious." Black's Law Dictionary (3rd Ed.), "Good faith", and cases there cited. (5) "Bona Fide" is defined as, "good faith, honest." Bouvier's Law Dictionary (3rd Ed.). (6) "Good faith" is synonomous with truth, sincerity, candor, honesty, uprightness, fairness, clean hands. Roget's Thessaurus of English Words and Phrases, Veracity, Probity. (7) While bad faith may constitute fraud or deceit, it is not necessary to prove actual fraud in order to invalidate a release for want of consideration. See cases cited under Point (3) hereof. (8) The jury having found that appellant did not act in good faith, and the trial court having concurred therein, this court will accept such finding as final herein, if the evidence discloses any reasonable basis therefor. Smith v. Washington Natl. Ins. Co., 91 S.W.2d 169. (9) When an insurer denies liability on the grounds that the deceased died of disease, and not of accidental injuries, and bases such denial on the coroner's report, if the report gives as the first cause of death, ulcer of the leg, admittedly due to accident, then as a matter of law such insured does not act in good faith. Morris v. Equitable Assur. Soc., 340 Mo. 709, 102 S.W.2d 569. (10) An insurer which states that it has made a "careful investigation" or that it has made "investigations", if it has not done so, is not acting in good faith. Morris v. Equitable Assur. Soc., supra. (11) An insurer which states that it denies liability on a policy and then immediately, or in a short time thereafter, offers a settlement of over twenty per cent of the total due on the policy, and, when the beneficiary says nothing, makes a second offer of sixty-five percent of the total amount due on the policy, reveals by such conduct that its denial of liability is not in good faith. Streeter v. Washington Fidelity Natl. Ins. Co., 229 Mo. App. 33, 68 S.W.2d 889; Lynn v. Business Men's Assur. Co., 232 Mo. App. 842, 111 S.W.2d 231; Brizendine v. Cent. Life Ins. Co., 234 Mo. App. 460, 131 S.W.2d 906. (12) The statements of the accredited representatives of the insurer before and at the time of the settlement with the beneficiary are competent evidence on the question of the good faith of the insurer. Lynn v. Business Men's Assur. Co. of America, 232 Mo. App. 842, 111 S.W.2d 231; Sappington v. Cent. Mut. Ins. Co., 77 S.W.2d 140; Sheppard v. Travelers Protective Assn. of Amer., 104 S.W.2d 784. (13) In determining whether or not the insurer acted in good faith in denying liability and, thereafter, settling with the beneficiary for less than the amount due on the policy, the court will consider only such facts on which the insurer relied at the time of the offer of settlement and not on after-acquired facts which the insurer develops at the trial. Lynn v. Business Men's Assur. Co. of America, 232 Mo. App. 842, 111 S.W.2d 231; Brizendine v. Central Life Ins. Co., 234 Mo. App. 460, 131 S.W.2d 906. (14) The payment of less than the total amount due on a claim for a liquidated amount is no consideration for the release of the balance due. Such a settlement is nudum pactum and void. Wayland v. Pendleton, 337 Mo. 190, 85 S.W.2d 492; Enright v. Schaden, 242 S.W. 89; Head v. N.Y. Life Ins. 241 Mo. 403, 147 S.W. 827; Stephens v. Curtner, 205 Mo. App. 255, 222 S.W. 497. (15) The amount due on an accident insurance policy which contains a death benefit clause is a claim for a liquidated amount upon the death of the insured by accident. See cases under Point (3). (16) Appellant's contention that the burden of proof was on respondent to establish the invalidity of the release is not correct. The burden of proof is on the insurer to establish the validity of a release, where want of consideration is pleaded. Schreiber v. Cent. Mut. Ins. Ass'n., 108 S.W.2d 1052; Nelson v. K.C. Public Service Co., 30 S.W.2d 1044; Anrold v. Brotherhood of Locomotive Firemen Engine Men, 231 Mo. App. 508, 101 S.W.2d 729. (17) One who receives by way of settlement less than the amount due on a liquidated claim may sue the obligor for the balance due without returning or tendering the amount paid by way of settlement. Enright v. Schaden, 242 S.W. 89; Head v. N.Y. Life Ins. Co., 241 Mo. 403, 147 S.W. 827; Arnold v. Brotherhood of Locomotive Firemen Enginemen, 231 Mo. App, 508, 101 S.W.2d 729. (18) This rule is applicable to beneficiaries of life and accident insurance policies. Occidental Ins. Co. v. Eiler, 125 F.2d 229; Berry v. Detroit Casualty Co., 300 S.W. 1026; Head v. N.Y. Life Ins. Co., 241 Mo. 403, 147 S.W. 827; Crowder v. Continental Cas. Co., 115 Mo. App. 535, 91 S.W. 1016; Biddlecom v. General Acc. Assur. Co., 167 Mo. App. 581, 152 S.W. 103. (19) Under the facts in this case respondent was entitled to a peremptory instruction telling the jury that the release on which appellant relied was without consideration as a matter of law, since appellant's evidence showed no consideration. Yancey v. Cent. Mut. Ins., 77 S.W.2d 149; Schreiber v. Cent. Mutual Ins. Assn., 108 S.W.2d 1052; Occidental Life Ins. Co. v. Eiler, 125 F.2d 229. (20) Instruction 4 was in the conjunctive and not in the disjunctive and required that before the jury could find the release was without consideration it must find, first, that there was not an actual bona fide dispute, and, second, that the claim made by defendant that there was such a dispute "was not made in good faith upon substantial grounds, sufficient to warrant a reasonable person to believe that the defendant had a valid legal defense." This imposed a greater burden on respondent than was necessary, since if the jury found that there was not an actual bona fide dispute that was all that it was required to find to invalidate the release. Sappington v. Cent. Mut. Ins. Co., 77 S.W.2d 140; Webster v. International Shoe Co., 18 S.W.2d 131; Wolfe v. Payne, 241 S.W. 915, 294 Mo. 170. (21) Instruction 4 did not submit a question of law to the jury. The use of the word "substantial" in Instruction 4, of which use appellant complains, has been repeatedly approved by our appellate courts. Rose v. Natl. Lead Co., 94 S.W.2d 1047; Bellows v. Travelers Ins. Co. of Hartford, Conn., 203 S.W. 978; Moss v. Met. Life Ins. Co., 230 Mo. App. 70, 84 S.W.2d 395. (22) The use of the words "that the defendant had a valid legal defense" of which appellant complains, can not be read alone but must be read as part of the entire sentence. Under this part of Instruction 4 the jury could not find for respondent on the issue of consideration for the release, if the jury found that the claim of a defense which was made by appellant to support the release, was based upon substantial grounds sufficient to warrant any reasonable person to believe that he had any valid legal defense, regardless of whether or not it was valid. The jury were not required to find what was a valid legal defense. The court instructed the jury on that subject at the request of appellant. Shepman v. Cent. Mut. Assn., 104 S.W.2d 777; Schreiber v. Cent. Mut. Assn., 108 S.W.2d 1052. (23) Instructions must be read together. Larey v. Missouri-Kansas-Texas R. Co., 64 S.W.2d 681, 333 Mo. 949; Jenkins v. Mo. State Life Ins. Co., 69 S.W.2d 666, 334 Mo. 941; Engleman v. Railway Exp. Agency, 100 S.W.2d 540, 340 Mo. 360; Smith v. Southern Illinois Mo. Bridge Co., 30 S.W.2d 1077, 326 Mo. 109; Morris v. Equitable Assur. Soc., 102 S.W.2d 569, 340 Mo. 709. (24) Instruction 4 was in an approved form. Mills v. American Mut. Assn., 151 S.W.2d 459. (25) Even if Instruction 4 were erroneous, the error was harmless. Schreiber v. Cent. Assn., 108 S.W.2d 1052; Roberts v. Woodmen Acc. Co., 233 Mo. App. 1058, 129 S.W.2d 1053; Yancey v. Cent. Mut. Ins. Co., 77 S.W.2d 149; Secs. 973, 1228, R.S. 1939; Schuepbach v. Laclede Gas Co., 232 Mo. 603; St. Louis v. Senter, 102 S.W.2d 103; Cornwell v. Highway Motor Freight Line, 152 S.W.2d 10. (26) The court followed the statute and the controlling decisions in submitting the question of vexatious delay and refusal to pay to the jury. The bad faith of the appellant in denying liability and the expense and delay to which it had put the respondent, thoroughly warranted the jury in returning a verdict for damages for vexatious refusal to pay and delay. Sec. 6040, R.S. 1939; Exchange Bank of Novinger v. Turner, 324 Mo. 1101, 14 S.W.2d 425; Morris v. Equitable Assur. Soc., 340 Mo. 709, 102 S.W.2d 569; Friedman v. State Mut. Life Assur. Co., 108 S.W.2d 156; Lynn v. Business Men's Assn. Co., 232 Mo. App. 842, 111 S.W.2d 231; Lux v. Milwaukee Mechanics Ins. Co., 30 S.W.2d 1090; Rush v. Met. Life Ins. Co., 63 S.W.2d 453; Bailey v. Met. Life Ins. Co., 115 S.W.2d 151; Wollums v. Mutual Benefit Assn., 226 Mo. App. 647, 46 S.W.2d 259; Clair v. American Bankers Ins. Co., 137 S.W.2d 969; Cox v. Kansas City Life Ins. Co., 154 Mo. App. 464, 135 S.W. 1013; Weintraub v. Abe Lincoln Ins. Co., 99 S.W.2d 160; Streeter v. Washington Fidelity Ins. Co., 229 Mo. App. 33, 68 S.W.2d 889; Chavaries v. Natl. Life Acc. Ins. Co., 110 S.W.2d 790.

[484] CLARK, J.

This case was heard and determined by the St. Louis Court of Appeals [169 S.W.2d 423] and transferred here because of the dissent of one of the judges of that court. We determine the case as though the appeal had properly come here in the first instance. [Mo. Const., Art. 6, amendment of 1884, sec. 6.]

The majority opinion in the court of appeals contains a statement of the pleadings and evidence which statement has been adopted by the appellant in its brief in this court, and a portion of which we quote, as follows:

"This suit was instituted in the Circuit Court of the City of St. Louis, on May 14, 1941, for the balance due plaintiff as beneficiary in a policy of accident insurance issued by the defendant to her husband, Leslie W. Foster, on December 30, 1909. The policy provided for death benefit for accidental death in the sum of $3,000.00, to be increased at the rate of 10% of the original principal sum for five consecutive years, until the amount of the principal sum or death benefit was $4,500.00.

"The petition alleges that on December 15, 1938, that the plaintiff's husband slipped and fell, while walking up the steps to the front porch of his home and struck his right leg against the steps, severely injuring his right knee, and, as a direct result of such injury, he was thereafter totally and permanently disabled until his death on January 25, 1939; that after proof of death, the defendant paid the plaintiff the sum of $3,000.00, leaving a balance due the plaintiff in the sum of $1,500.00 on the death benefit and $87.85 for total disability of her husband from the time of his injury until his death, and $60.00 for surgical services to her husband, making a total of $1,647.85, for which she asked judgment, with interest and for damages and a reasonable attorney's fee for vexatious refusal to pay the loss.

"The answer admitted the issuance of the policy, the death of plaintiff's husband, the insured, on January 25, 1939, and the payment by the defendant to the plaintiff of $3,000.00 and denied all other allegations in the petition. For an affirmative defense, it was alleged that after the death of Leslie W. Foster, the plaintiff made claim for the principal sum of $4,500.00, and for $87.85 for total disability, and $30.00 for surgical services; that the plaintiff contended that Leslie W. Foster's disability and death resulted from a fall which injured his right knee; that upon investigation of the facts the defendant concluded that the death of Leslie W. Foster did not result directly and independently of all other causes from bodily injuries suffered by him, but resulted from disease, that is to say, nephritis and uremia; that thereupon the defendant, in good faith, denied liability, and a controversy arose in good faith as to the liability of the defendant, and that for the purpose of settling said controversy and avoiding litigation, the parties agreed upon a compromise and settlement of plaintiff's claim, and the defendant agreed to pay and the plaintiff agreed to accept the sum of $3,000.00 in settlement of all claims which she had or might have under said policy; that on May 6, 1939, the defendant paid plaintiff by its check or draft the sum of $3,000.00, and the plaintiff executed and delivered to defendant her receipt and release for said sum in full payment of her claim under the policy.

"The reply admits the payment of the sum of $3,000.00 and the execution of the release and receipt, and seeks to avoid said settlement and release by denial that a controversy arose in good faith as to the liability of the defendant, and that the parties agreed upon a compromise by the payment of $3,000.00 in full settlement of plaintiff's claims, and specifically pleads that the purported satisfaction and compromise was invalid for want of consideration.

"The case was tried and resulted in a verdict and judgment for the plaintiff for the sum of $1,500.00, with interest thereon in the sum of $240.00, and for damages in the sum of $150.00 and attorneys' fees in the sum of $500.00, making an aggregate judgment of $2,390.00". Defendant appealed.

Appellant offered a demurrer to the evidence at the close of respondent's case and at the close of the whole case.

We deem it unnecessary to recite in detail the evidence given at the trial. Suffice it to say that respondent (plaintiff) offered substantial evidence authorizing the jury to find that insured died as the result of an accident, and appellant (defendant) offered substantial evidence which would have authorized the jury to find that the death was due to disease and not accident. There was a submissible issue on liability unless respondent's cause of action was foreclosed by the purported release set up in appellant's answer. The release acknowledged payment by appellant [485] to respondent of $3,000.00 "in full payment, satisfaction and discharge — and final adjustment of all claims" under the policy sued on.

Aside from the small claims for disability benefits and medical fees, the liability of the appellant, if any, at the death of insured was the sum of $4,500.00. By the cases cited in their briefs the parties concede that release of a liquidated claim on payment of only a part thereof is not binding without an independent consideration, but that a dispute as to liability, made in good faith after reasonable investigation, will furnish a valid consideration.

In this case respondent does not claim that the release was procured by fraud or duress. If the appellant, at the time the release was executed, had made a reasonable investigation and had ascertained facts or evidence which would cause a reasonable person in good faith to believe that insured came to his death as the result of disease and not by accident, or cause such a person to have an honest doubt that death was due to accident, the release is based on a valid consideration, otherwise it is not. [Zinke v. Maccabees, 275 Mo. 660, 205. S.W. 1; State ex rel. v. Trimble, 335 Mo. 213, 72 S.W.2d 111; Wood v. Tel. Co., 223 Mo. 537, 123 S.W. 6; Creason v. Harding, 344 Mo. 452, l.c. 469, 126 S.W.2d 1179.]

Appellant argues that, as the evidence made a case for the jury as to liability, there was a sufficient consideration for the release. But the question depends upon the facts or evidence within the possession of appellant at the time the release was executed, not at the time of trial, because there must have been a consideration at the time the contract of settlement was made. In Lynn v. Business Men's Assur. Co., 232 Mo. App. 842, 111 S.W.2d 231, l.c. 236, the Kansas City Court of Appeals in speaking of the consideration for an alleged compromise said: "The main question is whether or not the evidence shows that the defendant at the time of settlement had information which caused it to believe there was no liability". [Italics supplied.]

In Brizendine v. Central Life Insurance Co., 234 Mo. App. 460, 131 S.W.2d 911, it is said:

"Furthermore, the question of whether or not there was a genuine good faith dispute as to liability must be determined in the light of the information in the possession of the defendant at the time of the settlement. Information discovered subsequent to a settlement certainly could not afford the basis of a controversy existing at the time of the settlement. Hence, facts developed at the trial of a case, unless shown to have been in the possession of the party relying on the release at the time the settlement was consummated, would not support the contention that a bona fide dispute existed at the time the settlement was made and the release executed".

This court, in Reilly v. Chouquette, 18 Mo. 220, l.c. 226, approved in Wood v. Tel. Co., 223 Mo. l.c. 565, held that, if there was sufficient basis for dispute at the time when made, a compromise would not be disturbed should it afterwards turn out that one of the parties had no right at law. In the instant case appellant's instruction number seven is drawn on the theory that the consideration for the release depends upon the situation at the date it was executed.

Appellant contends that the burden was on respondent to prove lack of consideration for the release. Respondent denies that this burden rested upon her. She further says that the question is not in the case, because no instruction was given or refused on burden of proof as to the release. However, the question is briefed by both parties and is pertinent to a consideration of respondent's instruction number four which we will discuss later. Release is an affirmative defense and the burden of proof is on the party who pleads it to prove that it was executed. But release is merely a contract of compromise and settlement and where, as respondent has done here, the execution of a release purporting to rest on a consideration is admitted in the reply the burden is on the plaintiff to plead and prove some invalidity in the release. [Macklin v. Fogel Const. Co., 326 Mo. 38, 31 S.W.2d 14; Wood v. Tel. Co., 223 Mo. 537, l.c. 565, 123 S.W.2d 6; Sheppard v. Protective Co., 233 Mo. App. 602, 124 S.W.2d 528; Williams v. American Life Co. (Mo. App.), 112 S.W.2d 909; 15 C.J.S. Compromise and Settlement, pp. 774, 5, 6, 7; Release, 23 R.C.L., pp. 4, 7, sec. 48.]

Respondent seems to concede that the burden is on one who attacks a release [486] for fraud or duress, but says the same rule does not apply to an attack for want of consideration. We fail to see a reason for such distinction. Respondent, in support of this contention, cites: Schreiber v. Cent. Mut. Ins. Ass'n. (Mo. App.), 108 S.W.2d 1052; Nelson v. K.C. Pub. Serv. Co. (Mo. App.), 30 S.W.2d 1044, and Arnold v. Brotherhood of Locomotive Firemen Enginemen, 231 Mo. App. 508, 101 S.W.2d 729. The Schreiber opinion does not discuss the burden of proof, but it does inferentially lend some support to respondent's contention in the instant case by holding that the failure of plaintiff's instruction to mention a release pleaded by defendant was cured by an instruction for defendant which supplied the omission, the reason given being that release is an affirmative defense. The opinion overlooked the fact that plaintiff had admitted the execution of the release in his reply, and had pleaded matter in avoidance. The Nelson opinion is similar to that in the Schreiber case. In the Arnold case plaintiff had two policies of insurance, but sued on only one. Defendant pleaded a release and plaintiff's reply denied that the release was in settlement of the policy sued on. The court correctly held that defendant had the burden to prove that the release pertained to the cause of action on trial. Other cases cited by respondent are not in point on this question. It so happens in this case that respondent, to prove want of consideration, must prove a negative and a fact peculiarly within the knowledge of appellant, to wit, that appellant was without substantial evidence to justify a denial of liability in good faith. That does not relieve respondent of the burden of proof, but does shift the burden of evidence to appellant as to facts peculiarly within its knowledge. [Evidence, 31 C.J.S., p. 720, sec. 113.] Plaintiff offered substantial evidence that insured died as the result of an accident. That made a prima facie case both on the merits and on the lack of consideration for the release; for, if the jury believed plaintiff's testimony that the death was due to accident and appellant offered no evidence to the contrary, the jury would necessarily find that there was no good faith controversy as to liability which would furnish a consideration for the release. Thus, after respondent's prima facie case was made the burden of going forward with evidence shifted to appellant. In other words, it was then incumbent on appellant to disclose facts or evidence within its knowledge at the date of the release tending to justify its claim of nonliability, [Emory v. Emory (Mo.), 53 S.W.2d 908] but, upon all the evidence, the burden remained upon respondent to disprove consideration for the release, the execution of which she had admitted in her reply.

At the date of the release it is undeniable that appellant had before it certain documentary evidence. The interpretation of such evidence was for the court and, if it was such as might cause an honest doubt in the minds of reasonable men as to whether insured died from disease or accident, there was a basis for compromise and the court should have given a peremptory instruction for the defendant. This evidence consisted of the notice of injury; the statement of Dr. Gundlach, the attending physician; the hospital record; and the coroner's report with a statement and opinion of Dr. Gundlach attached to it. All this evidence was offered by respondent at the trial. The notice of injury stated that on December 14, 1938, insured fell on the steps at his home and injured his right knee. The statement of Dr. Gundlach furnished to appellant on January 30, 1939, diagnosed insured's injury as a bruised right knee, with complications of periostitis, right knee, uremia and hypostatic pneumonia; stated that he saw insured daily from December 16, 1938, to his death on January 25, 1939, during all of which time he was totally disabled, and recited three operations performed on insured's leg. The hospital record gave the age of insured as 68, stated that he was admitted January 15, 1939; that his previous health was good as far as could be learned; recited the condition of insured from the time of his admission to the hospital until his death and stated uremia as a complication and final cause of death. The coroner's report gave in detail the findings of Dr. D.L. Harris, who conducted a post mortem examination, and gave as the cause of death: "ulcer of leg, chronic nephritis, chronic bronchiectasis". The statement of Dr. Gundlach, attached to the coroner's report, gave a detailed history of insured's injury and resulting condition and concluded with the opinion that "death was hastened by the infection from the periostitis which aggravated any kidney condition which he might have had, and caused uremia".

We have briefly stated all the information which is conceded to have been [487] known to appellant at the date of the release. It points to the accident as the cause of death and does not justify a reasonable belief that death was due to disease. True, the post mortem findings of Dr. Harris, after giving ulcer of the leg as the first cause of death, also gave chronic nephritis and chronic bronchiectasis as causes, but a reasonable investigation would have shown appellant that these two additional ailments did not cause death, and so Dr. Harris testified at the trial. The hospital report gave uremia as the final cause of death, but the statement of Dr. Gundlach recited that the injury aggravated any kidney condition which he might have had and caused uremia. Even though the resistance of insured may have been weakened by a previous kidney condition, if so, and but for such weakened condition he might have survived the injury, yet, if the injury aggravated the previous condition and hastened death, appellant could not reasonably deny that the injury was the active and efficient cause of death. To hold otherwise would prevent recovery of accidental death insurance unless the plaintiff could prove that insured was in perfect health at the time of the injury. [See Wheeler v. Fidelity Casualty Co., 298 Mo. 619, 251 S.W. 924, and cases cited.]

In addition to the above information, conceded to have been known by appellant at the date of the release, appellant claims to have had other information, to wit: a letter to appellant dated February 17, 1939, from Dr. Harris, inclosing a report on the autopsy performed by him on the body of insured on January 26, 1939, and a report by telephone from Dr. Harris to one of appellant's adjusters.

At the trial Dr. Harris said he was paid ten dollars by the coroner for performing the autopsy and appellant paid him one hundred dollars for making the report to it. He said he submitted to the coroner a copy of the report which he made to appellant, but could not explain why the coroner failed to preserve it in his files. In his report to the appellant Dr. Harris stated his anatomical findings as ulcer of the leg and other specified conditions. In his letter inclosing this report Dr. Harris stated: "There is no evidence which would establish a connection between the ulcer and the death. If any such connection is claimed it could be established only by the clinical history of the case". If we concede that appellant had this letter and report before it at the date of the release, we cannot say as a matter of law that they furnish a reasonable basis for a denial of liability. In the letter Dr. Harris does not express a positive opinion that there was no connection between the ulcer and the death. In fact, he indicates that there might be such a connection which could be dislosed by the clinical history. At best, this called for further investigation by appellant before it would be justified in claiming death was not due to accident. But, at that time, appellant had the clinical history of the case, which consisted of the hospital report and the statement of Dr. Gundlach, and the clinical history did purport to establish a connection between the ulcer and the death.

At the trial a Mr. Morrow, one of appellant's adjusters, testified that in the latter part of January Dr. Harris, in response to a request for his opinion as to the cause of insured's death, said he thought it due to a disease, some kidney disease. Dr. Harris testified that a few days before he made his report to appellant some one called him over the telephone and asked for his opinion as to the cause of death and "I gave him my conclusions at that time, although they hadn't been reduced to writing". If the trial court was compelled to accept as true the testimony of Morrow that appellant had a positive opinion from a reputable, skilled physician after he had performed an autopsy, that the death was caused by disease, then the court should have held that there was a valid consideration for the release and should have sustained appellant's demurrer to the evidence. [Brennecke v. Lumber Co., 329 Mo. 341, 44 S.W.2d 627.] But the trial court was not compelled, nor authorized, to accept this testimony as true, even though it was not directly contradicted. There were other circumstances in evidence tending to cast some doubt that appellant had received such a positive opinion at the date of the release. It should be noted that Dr. Harris did not testify that he gave a positive opinion to Morrow. He said he gave his conclusions which had not yet been reduced to writing. When these conclusions were reduced to writing he gave only a tentative opinion which might be changed on further investigation of the clinical history. If Dr. Harris gave Mr. Morrow the same conclusions over the telephone which he later reduced to writing, the testimony of Mr. Morrow is incorrect. If he gave Mr. Morrow a [488] positive opinion, he later qualified it in his written report which would seem to call for further investigation by appellant. Also, the circumstances under which the release was obtained might raise some doubt that appellant had, or believed it had, substantial evidence that the death was due to disease. The negotiations for the release extended over a period of several months and respondent's testimony indicates that appellant was rather persistent in trying to make the settlement. Respondent testified that appellant first offered her $1,000.00, then $2,000.00, then $3,000.00, that she refused the offers; that some days later appellant's adjuster called her and said he had the draft; that she went to his office and, upon learning that the draft was for only $3,000.00, refused to accept it; that still later the adjuster brought the draft to her home and induced her to accept it and sign the release. Payment of $3,000.00. on a disputed claim for $4,500.00 was at least some indication that appellant lacked faith in its claim of nonliability. [Streeter v. Ins. Co., 229 Mo. App. 33, 68 S.W.2d 889; Lynn v. Assurance Co., 232 Mo. App. 842, 111 S.W.2d 231.] Appellant's explanation is that it paid a substantial sum because of the friendship of its adjuster for the insured. Considering all the testimony on the question, the court could not say as a matter of law that there was such a good faith dispute of liability as to furnish a consideration of the compromise. The issue was one of fact for the jury. [Macklin v. Const. Co., 326 Mo. 38, 31 S.W.2d 14.]

It may be well to notice certain contentions of respondent, to wit, that there was no real dispute as to liability because the negotiations were conducted in an amicable manner and appellant did not disclose its reason for refusing to pay the full amount called for by the policy. These contentions are without merit. Of course, it was unnecessary for the parties to show anger or ill will in their discussions and appellant, absent a request, was under no duty to disclose its reasons for denying liability.

Appellant complains of instruction number four given at request of respondent which we quote in full:

"The Court instructs the jury that the defendant relies, for one of its defenses herein, on an alleged settlement made with plaintiff on May 6, 1939, for the sum of three thousand, ($3,000.00) dollars, and release executed in connection therewith. The Court instructs you that in order for such settlement and release to constitute a bar to plaintiff's recovery for the balance alleged to be due, if you find plaintiff is otherwise entitled to recovery, there must have existed an actual bona fide dispute between plaintiff and defendant as to whether or not defendant was liable under its policy of insurance in evidence. Such dispute, if any, must have been based in good faith, upon substantial grounds, sufficient to warrant a reasonable person to believe that the defendant had a valid legal defense against plaintiff's claim. A mere assertion by defendant that it had such a defense, or that it believed that it had such a defense, unless based in good faith upon substantial grounds, will not be sufficient to constitute a consideration for such settlement and release for the balance claimed to be due on said policy. If, therefore, you find and believe from the evidence that there was not an actual bona fide dispute between plaintiff and defendant as to the liability of defendant under its said policy, and that the claim made by the defendant that it had such defense was not made in good faith, upon substantial grounds, sufficient to warrant a reasonable person to believe that the defendant had a valid legal defense against plaintiff's claim, then you should find that the settlement and release given on connection therewith did not constitute a consideration for the release of the balance claimed by plaintiff under the terms of said policy".

By the permission, twice given, for the jury to set aside the release if they found no dispute "sufficient to warrant a reasonable person to believe that the defendant had a valid legal defense against plaintiff's claim", this instruction gave the jury a roving commission to invalidate the release upon their own view as to the legal question of what would constitute a valid legal defense. Respondent argues that any vice in this instruction was cured by appellant's instruction number seven which submitted the facts essential to a valid consideration for the release. Respondent cites Schreiber v. Cent. Mut. Assn., 108 S.W.2d 1052, which we have already discussed. Other cases cited by respondent hold that error in a plaintiff's instruction directing a verdict, due to the omission of an essential element of the defense, may be cured by an instruction for defendant which correctly supplies the omission. That is not the question here. [489] The vice of respondent's instruction is not that it omits an element of the defense, but that it erroneously submits an element necessary to respondent's burden of avoiding the release.

We are compelled to hold that the instruction constitutes reversible error. [Stanich v. Western Union Tel. Co., 348 Mo. 188, 153 S.W.2d 54; Gillioz v. State Highway Comm., 348 Mo. 211, 153 S.W.2d 18, 26; Macklin v. Fogel Const. Co., 326 Mo. 38, 31 S.W.2d 14; State ex rel. v. Shain, 344 Mo. 57, 124 S.W.2d 1194; State ex rel. v. Shain, 341 Mo. 733, 108 S.W.2d 351; State ex rel. v. Shain, 342 Mo. 1190, 119 S.W.2d 788.]

Accordingly, the judgment is reversed and the cause remanded. All concur.