In further support of their position that a loss occasioned by arson of the insured's agent is caused by the wilful act of the insured within the meaning of Insurance Code section 533, defendants rely upon decisions holding that a term of the contract providing for nonliability in the event the insured files a false claim includes false claims filed by an agent of the insured, even though the agent was not authorized to falsify the claim. (See Stockton etc. Works v. Glen's Falls Ins. Co., 98 Cal. 557, 575 [33 P. 633]; Hyland v. Millers Nat. Ins. Co., 58 F.2d 1003, 1006; Davis Scofield Co. v. Reliance Ins. Co., 109 Conn. 686 [ 145 A. 42]; Bockser v. Dorchester Mut. Fire Ins. Co., 327 Mass. 473 [ 99 N.E.2d 640, 24 A.L.R.2d 1215]; Mick v. Royal Exch. Assur., 87 N.J.L. 607 [91 A. 102, 52 L.R.A.N.S. 1074].) [9] These decisions apply the general rule set forth in Restatement of the Law of Agency that, "A principal who puts an agent in a position that enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud."
Appellants' next contention is that the trial record does not establish that Lomartira's testimony constituted "intentionally made false and fraudulent statements" and "intentionally false swearing." Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 689, 145 A. 42, 44 (1929). With due regard to Judge Timbers' opportunity to observe the demeanor of the witnesses, we cannot hold on this record that his finding was clearly erroneous.
To the extent that we suggested that the clear and convincing standard should be applied to that defense, it was dictum. We now interpret our reference in Verrastro to the elevated burden of proof required for proof of fraud in a civil action as applying solely to claims of common law fraud, the elements of which are distinct from an insurer's defense of concealment or misrepresentation. Compare Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 689-90, 145 A. 42 (1929) (elements of concealment or misrepresentation defense) and Kilduff v. Adams, Inc., supra (elements of common law fraud). In Kilduff v. Adams, Inc., 219 Conn. 314, 330, 593 A.2d 478 (1991), we held that a plaintiff in a fraud action must prove damages by a preponderance of the evidence but must prove all the other elements of common law fraud by "clear and satisfactory" evidence.
In so doing, the defendant made Mrs. Mercier his agent for this specific purpose. Mrs. Mercier's answers thus were in law the answers of the defendant, regardless of the scope or existence of any other agency relationship between the Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 690, 145 A. 42; see cases such as Ezzo v. Geremiah, 107 Conn. 670, 680, 142 A. 461. Independently of this, since Mrs. Mercier's answers were made in the presence and hearing of the defendant and at his instigation, and he in nowise repudiated them or signified to the plaintiff that they were unauthorized, there was ample support, under the rule of apparent authority, for the court's finding of agency. Washington Cedar Fir Products Co. v. Elliott, 91 Conn. 350, 353, 100 A. 29; Fireman's Fund Indemnity Co. v. Longshore Beach Country Club, Inc., 127 Conn. 493, 496, 18 A.2d 347.
The majority, and we think the better reasoned, view is that the attempted fraud of the agent acting in the scope of his employment binds the principal. Davis-Scofield Co. v. Reliance Ins. Co. 109 Conn. 686, 690. Mick v. Corporation of Royal Exchange Assurance, 87 N.J.L. 607. Compare S.C. 87 N.J.L. 628. Kantor Silk Mills, Inc. v. Century Ins. Co. Ltd. 223 App. Div. (N.Y.) 387, affirmed 253 N.Y. 584.
Miller v. Metropolitan L. I. Co., 214 Ala. 4, 106 So. 335. The fraud of an agent acting within the line and scope of his authority in making proof of loss is binding on the insured and bars recovery in a suit by insured on the policy. Mick v. Royal Exch. Assur. Co., 87 N.J.L. 607, 91 A. 102, 52 L.R.A., N.S., 1074; Davis Scofield Co. v. Reliance Ins. Co.,'109 Conn. 686, 145 A. 42; Amer. Eagle Ins. Co. v. Vaughan, 4 Cir., 35 F.2d 147; Mullin v. Vt. M. F. Ins. Co., 58 Vt. 113, 4 A. 817; Saidel v. Union Assur. Soc., 84 N.H. 232, 149 A. 78; Baker v. Clark, 14 Ala. App. 152, 68 So. 593; Gulf Elec. Co. v. Fried, 218 Ala. 684, 119 So. 685; 1 A. E. Ency.Law, 2d Ed., 1158. Edgar Allen, of Birmingham, for appellee.
For that reason, the rule has been stated to be that to constitute fraud or false swearing, which will work a forfeiture of the insurance, there must be a false statement wilfully made with respect to a material matter with the intention of thereby deceiving the insurer. Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 689, 690, 145 A. 42; 14 R. C. L. 1343; 32 L.R.A. (N.S.) 453, 457, 458. Here the proof was filed, all questions were answered and the true state of the title appeared on the face of the document. Under "Title and Interest" it was stated that title is held by the assured for the benefit of Albert Chauser and under "Changes" that an unrecorded quitclaim has been given to Albert Chauser. These two clauses, taken together, were not susceptible of any misunderstanding.
Such a provision clearly provides that the consequence for concealing or misrepresenting a material fact after a loss is a voiding of the entire policy and the insured's forfeiture of any contractual benefit. See Rego v. Connecticut Ins. Placement Facility, 219 Conn. 339, 347, 593 A.2d 491 (1991); Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 689, 145 A. 42 (1929). Although the penalty seems harsh, it does not apply "[w]here the false [representation] was not intentionally false, or [where] the false [representation was] not intentionally so, but made through mistake or an opinion honestly entertained. . . .
(Citations omitted.) Bauco v. Hartford Fire Ins. Co., supra, 36 Conn. L. Rptr. 804; sec also Davis-Scofield Co. v. Reliance Ins. Co., 109 Conn. 686, 689, 145 A. 42 (1929) ("The fraud or false swearing by an insured after a loss which will bar recovery for the loss is the intentionally false swearing. Where the false swearing was not intentionally false, or the false statement not intentionally so, but made through mistake or an opinion honestly entertained, neither falls within the term `fraud or false swearing' as used in this provision.").
A misrepresentation that forfeits the contractual benefit under an insurance policy must generally be a misrepresentation of fact; see Rego v. Connecticut Insurance Placement Facility, supra, 219 Conn. 346; not of opinion. Davis-Scofield Co. v. Reliance Ins. Co., CT Page 3330 109 Conn. 686, 689, 145 A.42 (1929); Aetna Casualty Surety Co. v. Pizza Connection, Inc., 55 Conn. App. 488, 496, 740 A.2d 408 (1999). In his examination under oath, the plaintiff stated several times that he repaired the cause of the leak, although he never used the word "completely."