On appeal from the Supreme Court.
For the appellant, Edward Felt (Aaron Z. Schomer, of counsel).
For the respondent, Louis Ogust.
The opinion of the court was delivered by
CAMPBELL, CHANCELLOR. This is an appeal from a judgment against the appellant in an action upon seven promissory notes; each dated November 14th, 1937; one each due monthly from March 14th, 1938, to September 14th, 1938, inclusive.
The cause was heard by the court without a jury.
The proofs and stipulation show the following transaction:
The appellant being engaged in a general trucking business, sought to insure itself against liability and property damage in the operation of its trucks and engaged Frizzell & Company, insurance brokers, to effect such insurance for it. The result was the entering into an agreement by appellant with Frizzell & Company, whereby the latter engaged to secure such a contract of insurance for the term of one year for the sum or compensation to such brokers of $4,000. Such agreement dated November 14th, 1937, is Exhibit D -2 and provides for the payment of the compensation of $4,000 to Frizzell
& Company, as follows: "The sum of $800 herewith and the sum of $320 on the fourteenth day of each month until the sum of $3,200 shall have been paid in full, and such other sums as herein set forth. As collateral security for the payment thereof assured (Moon Carrier Corporation) agrees to secure promissory notes for the above amount payable as set forth above." Thereupon the respondent paid to Frizzell & Company $800 in cash and executed and delivered to it ten promissory notes of $320 each, dated November 14th, 1937, and payable, consecutively, from one to ten months after date. Therewith the cash payment of $800 made up the total of $4,000. Frizzell & Company effected such insurance through policy No. 44-20218 of the Pennsylvania Casualty Company dated November 24th, 1937, and running for the period of one year to November 14th, 1938.
The policy of insurance called for a total annual premium of $3,859.46.
The notes executed and delivered by the Moon Corporation to Frizzell & Company under the foregoing agreement were in the usual form of promissory notes but each contained the following acceleration provision:
"This note is one of a series of ten notes of even date and if this note or any of the series of notes is not paid at maturity of each respective note at the time and place specified the entire unpaid amount of said notes shall become due and ...