Foster v. Aetna Life Insurance Co.

Decision Date01 November 1943
Docket NumberNo. 38522.,38522.
PartiesCLARA LOUISE FOSTER v. AETNA LIFE INSURANCE COMPANY of Hartford, Connecticut, a Corporation, Appellant.
CourtMissouri Supreme Court

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...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT