Defendants appeal from a judgment in favor of plaintiff in an action based upon certain policies of fire insurance issued by defendants. The policies in question, however, were duly canceled prior to the occurrence of the fire. The complaint, therefore, should have been dismissed.
The facts are not in dispute, and, in so far as material, are as follows:
The Standard Insurance Company of New York offered to carry the insurance of the plaintiff on a somewhat different plan at a rate some forty per cent lower than that charged by the defendant companies in which plaintiff was then insured. Plaintiff accepted this offer, and on September 26, 1928, received a binder issued by the Standard Insurance Company covering various properties of the plaintiff, including a plant located in Oakdale, La. The latter was damaged by fire on October 1,1928. Having obtained insurance in the Standard Insurance Company to take the place of that carried in the defendant companies, the plaintiff instructed the brokers through whom the latter policies had been obtained to cancel said policies as of October 1, 1928. Said policies were subsequently duly *479canceled in accordance with said instructions and adjustment of return premium for the unexpired portion of the term made on that basis was paid to and accepted and retained by the plaintiff. The plaintiff claimed the full amount of the loss caused by the aforesaid fire of October 1, 1928, from the Standard Fire Insurance Company. The latter conceded its full liability to the plaintiff, but claimed that notwithstanding plaintiff had intended to cancel the policies in the defendant companies, notice to that effect had not been received by the defendants prior to the fire, and hence cancellation had not been effected. The Standard Insurance Company, therefore, claims there was double insurance upon the property in question and that the defendants are liable for one-half the loss. An arrangement was, therefore, made between Standard Insurance Company and the plaintiff to institute this action upon the agreement that Standard Insurance Company would pay the entire loss should the litigation prove unsuccessful.
The learned court at Trial Term sustained the contention of the Standard Insurance Company that the policies in the defendant companies had not been canceled prior to the fire, upon the ground that a letter of September 27, 1928, written by an officer and general counsel of the plaintiff to Wagner-Taylor Company, the broker through whom plaintiff had obtained the insurance, was ineffective as a cancellation, the court holding that said letter did not show an intention presently to cancel, and further that Wagner-Taylor Company were not the agents of the defendants, but the broker of the plaintiff. The form of this letter Heed not be considered, since the fact is that Wagner-Taylor Company accepted it as an instruction to cancel as of October first and acted accordingly by calling on the telephone on September 28, 1928, Mr. Harry Moragas, the New York representative of the defendants’ agency, and instructed him to cancel the policies as of October first. Thus also was removed the objection that notice of cancellation had not been given to the agent of the defendants. In this latter connection I disagree with the conclusion of the learned court at Trial Term that the evidence does not sustain the contention of the defendants that Moragas was their agent authorized at the time to receive cancellations of policies. Moragas was the New York representative of the New Orleans agency of the defendants which issued and countersigned the policies in question. These agents have never questioned the authority of Moragas to act for them, but on the contrary have recognized such authority and ratified and approved his acts. It does not lie with a stranger to question the authority of an agent held out by both principal and agent to exist in fact and in fact recognized by the principal.
*480That the notice thus given to the representative of the defendants’ agents in New Orleans was notice to the latter and to the defendants, is not open to question. As was said by Chief Judge Pound in Barone v. Ætna Life Insurance Company (260 N. Y. 410): “ It is held to be a matter of common knowledge, of which the company is, of course, aware, that the insurance business is carried on by agents largely through subordinates; that it cannot properly be carried on in any other way, and that, therefore, the ordinary local but so-called general agent may, as a matter of implied consent, appoint sub-agents and subordinates whose statements, acts, knowledge or receipt of notice, within the ordinary course of business, will bind the company.”
To recapitulate, on September twenty-eighth, or two days before the fire, the plaintiff’s Philadelphia brokers, Wagner-Taylor Company, telephoned Harry Moragas, the New York representative of the agency of the defendants, and instructed him to cancel the policies in the defendant companies as of October first. This is the determinative piece of evidence in the case.
It follows that the judgment appealed from should be reversed and the complaint dismissed.
Judgment affirmed, with costs.