Eddy

This is an appeal from a judgment rendered in an action for declaratory relief which upheld the validity of a clause in a deed of trust executed by plaintiffs to secure their promissory note, dated July 15, 1938, in the sum of $1,968, payable to defendant.

Defendant is a federal savings and loan association organized under the Home Owners Loan Act, 1933, as amended. (48 Stats. 132; title 12, U.S.C.A. secs. 1464 et seq.) Charles K. Fletcher was president and general manager of defendant. He was also agent of a fire insurance company authorized to issue fire insurance policies. He received a thirty per cent commission on the premiums of such policies written on houses within the city of San Diego.

At the time of the loan to plaintiffs, their building was covered by a fire insurance policy in the sum of $2,000 which was accepted by defendant. This policy expired on August 23, 1941, and prior to the expiration date plaintiffs obtained and tendered to defendant a policy of fire insurance issued by the New York Underwriters Insurance Company in the sum of $2,000. Defendant refused to accept this policy and obtained one in the same amount in the National American Fire Insurance Company…