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continue and cover the period of service ensuing until the appointment and qualification of the successor of the principal:

Sec. 5, act of Mar. 2, 1895 (28 Stat. 808); 6 U. S. C. 3.

528. Premium limited in amount and not to be paid by the United States.Until otherwise provided by law no bond shall be accepted from any surety or bonding company for any officer or employee of the United States which shall cost more than thirty-five per centum in excess of the rate of premium charged for a like bond during the calendar year nineteen hundred and eight: Provided, That hereafter the United States shall not pay any part of the premium or other cost of furnishing a bond required by law or otherwise of any officer or employee of the United States. Act of Aug. 5, 1909 (36 Stat. 125); 6 U. 8. C. 14.

529. Sureties; notification of default of principal.—That thereafter, whenever any deficiency shall be discovered in the accounts of any official of the United States, or of any officer disbursing or chargeable with public money, it shall be the duty of the accounting officers making such discovery to at once notify the head of the department having control over the affairs of said officer of the nature and amount of said deficiency, and it shall be the immediate duty of said head of department to at once notify all obligors upon the bond or bonds of such official of the nature of such deficiency and the amount thereof. Said notification shall be deemed sufficient if mailed at the post office in the city of Washington, District of Columbia, addressed to said sureties respectively, and directed to the respective post offices where said obligors may reside, if known; but a failure to give or mail such notice shall not discharge the surety or sureties upon such bond. Sec. 1, act of Aug. 8, 1888 (25 Stat. 387); 6 U. S. C. 4.

530. Sureties; limitation of action against.--That if, upon the statement of the account of any official of the United States, or of any officer disbursing or chargeable with public money, by the accounting officers of the Treasury, it shall thereby appear that he is indebted to the United States, and suit therefor sball not be instituted within five years after such statement of said account, the sureties on his bond shall not be liable for such indebtedness. Sec. 2, act of Aug. 8, 1888 (25 Stat. 387); 6 U. S. C. 5.

The General Accounting Office (see 1646, post), rather than the Treasury, would probably now make the statement provided for in this section.

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Notes of Decisions When limitations begin to run.--Limita- Respecting limitation period, bond requiretions begin to run against liability of Gov. ing Army officer honestly to account for ernment official's sureties as soon as indebt public money and property held not eviedness is incorporated in statement properly dence of "debt," and duty secured thereby rendered. U. S. v. U. S. Fidelity & Guaranty did not become debt until officer defaulted. Co. (D. C., 1928), 25 F. (2d) 500.

U. S. v. Geise (C. C. A., 1932), 56 F. (20) Government's claim against surety 583. official's bond held barred five years after Statement of account of Government of"statement of account" was rendered not-ficial, when rendered, is final as to surety withstanding subsequent statement within and starts limitation period running. Id. five years.

Id. 531. Sureties; priority rights against insolvent principal.-Whenever the principal in any bond given to the United States is insolvent, or whenever, such principal being deceased, his estate and effects which come to the hands of his executor, administrator, or assignee, are insufficient for the payment of his debts, and, in either of such cases, any surety on the bond, or the executor, administrator, or assignee of such surety pays to the United States the money due upon such bond, such surety, his executor, administrator, or assignee, shall have the like priority for the recovery and receipt of the moneys out of the estate and effects of such insolvent or deceased principal as is secured to the United States; and may bring and maintain a suit upon the bond, in law or equity, in his own name, for the recovery of all moneys paid thereon. R. 8. 3468; 31 U. 8. C. 193.

532. Surety companies as sureties.—That whenever any recognizance, stipulation, bond, or undertaking conditioned for the faithful performance of any duty, or for doing or refraining from doing anything in such recognizance, stipulation, bond, or undertaking specified, is by the laws of the United States required or permitted to be given with one surety or with two or more sureties, the execution of the same or the guaranteeing of the performance of the condition thereof shall be sufficient when executed or guaranteed solely by a corporation incorporated under the laws of the United States, or of any State having power to guarantee the fidelity of persons holding positions of public or private trust, and to execute and guarantee bonds and undertakings in judicial proceedings: Provided, That such recognizance, stipulation, bond, or undertaking be approved by the head of department, court, judge, officer, board, or body executive, legislative, or judicial required to approve or accept the same. But no officer or person having the approval of any bond shall exact that it shall be furnished by a guarantee company or by any particular guarantee company. Sec. 1, act of Aug. 13, 1894 (28 Stat. 279); 6 U. 8. C. 6.

A list of corporations acceptable as sureties on Federal bonds was promulgated by the Secretary of the Treasury under date of October 17, 1938 (3 F. R. 2596).

533. Surety companies; appointment of agents and service of process. That no such company shall do business under the provisions of this act beyond the limits of the State or Territory under whose laws it was incorporated and in which its principal office is located nor beyond the limits of the District of Columbia, when such company was incorporated under its laws or the laws of the United States and its principal office is located in said District, until it shall by a written power of attorney appoint some person residing within the jurisdiction of the court for the judicial district wherein such suretyship is to be undertaken, who shall be a citizen of the State, Territory, or District of Columbia, wherein such court is held, as its agent, upon whom may be served all lawful process against such company, and who shall be authorized to enter an appearance in its behalf. A copy of such power of attorney, duly certified and authenticated, shall be filled with the clerk of the district court of the United States for such district at each place where a term of such court is or may be held, which copy, or a certified copy thereof, shall be legal evidence in all controversies arising under this Act. If any such agent shall be removed, resign, or die, become insane, or otherwise incapable of acting, it shall be the duty of such company to appoint another agent in his place as hereinbefore prescribed, and until such appointment shall have been made, or during the absence of any agent of such company from such district, service of process may be upon the clerk of the court wherein such suit is brought, with like effect as upon an agent appointed by the company. The officer executing such process upon such clerk shall immediately transmit a copy thereof by mail to the company, and state such fact in his return. A judgment, decree, or order of a court entered or made after service of process as aforesaid shall be as valid and binding on such company as if served with process in said district. Sec. 2, act of Aug. 13, 1894 (28 Stat. 279); 6 U.S. C. 7.

534, Surety companies; deposit of charter and statement of assets and liabilities.--That every company, before transacting any business under this Act, shall deposit with the Secretary of the Treasury of the United States a copy of its charter or articles of incorporation, and a statement, signed and sworn to by its president and secretary, showing its assets and liabilities. If the said Secretary of the Treasury shall be satisfied that such company has authority under its charter to do the business provided for in this Act, and that it has a paid-up capital of not less than two hundred and fifty thousand dollars, in cash or its equivalent, and is able to keep and perform its contracts, he shall grant authority in writing to such company to do business under this Act. Sec. 3, act of Aug. 13, 1894 (28 Stat. 279); act of Mar. 23, 1910 (36 Stat. 241); 6 U. S. C. 8.

The amendment of this section and the section next following consisted in the substitution of the Secretary of the Treasury for the Attorney General, wherever the latter was mentioned in said sections as originally enacted.

535. Surety companies; quarterly statements.---That every such company shall, in the months of January, April, July, and October of each year, file with the said Secretary of the Treasury a statement, signed and sworn to by its president and secretary, showing its assets and liabilities, as is required by section three of this Act. And the said Secretary of the Treasury shall have the power, and it shall be his duty, to revoke the authority of any such company to transact any new business under this Act whenever in his judgment such company is not solvent or is conducting its business in violation of this Act. He may institute inquiry at any time into the solvency of said company and may require that additional security be given at any time by any principal when he deems such company no longer sufficient security. Scc. 4, act of Aug. 13, 1894 (28 stat. 279); act of Mar. 23, 1910 (36 Stat. 241); 6 U.S. C. 9.

536. Surety companies; jurisdiction of suits.—That any surety company doing business under the provisions of this act may be sued in respect thereof in any court of the United States which has now or hereafter may have jurisdiction of actions or suits upon such recognizance, stipulation, bond, or undertaking, in the district in which such recognizance, stipulation, bond or undertaking was made or guaranteed, or in the district in which the principal office of such company is located. And for the purpose of this Act such recognizance, stipulation, bond, or undertaking shall be treated as made or guaranteed in the district in which the office is located, to which it is returnable, or in which it is filed, or in the district in which the principal in such recognizance, stipulation, bond, or undertaking resided when it was made or guaranteed. Sec. 5, act of Aug. 13, 1894 (28 Stat, 280); 6 U. S. C. 10.

537. Surety companies; nonpayment of judgments.--That if any such company shall neglect or refuse to pay any final judgment or decree rendered against it upon any such recognizance, stipulation,'bond, or undertaking made or guaranteed by it under the provisions of this Act, from which no appeal, writ of error, or supersedeas has been taken, for thirty days after the rendition of such judgment or decree, it shall forfeit all right to do business under this Act. Sec. 6, act of Aug. 13; 1894 (28 Stat. 280); 6 U. S. C. 11.

538. Surety companies; estoppel to deny corporate power.—That any company which shall execute or guarantee any recognizance, stipulation, bond, or undertaking under the provisions of this Act shall be estopped in any proceeding to enforce the liability which it shall have assumed to incur, to deny its corporate power to execute or guarantee such instrument or assume such liability. Sec. 7, act of Aug. 13, 1894 (28 Stat. 280); 6 U. 8. C. 12.

539. Surety companies; penalties for noncompliance with law. That any company doing business under the provisions of this Act which shall fail to comply with any of its provisions shall forfeit to the United States for every such failure not less than five hundred dollars nor more than five thousand dollars, to be recovered by the suit in the name of the United States in the same courts in which suit may be brought against such company under the provisions of this Act, and sueh failure shall not affect the validity of any contract entered into by such company. Sec. 8, act of Aug. 13, 1894 (28 Stat. 280); 6 U. 8. C. 13.

540. Bonds or notes of the United States in lieu of surety.--When used in this Act, the term “person” means an individual, a trust or estate, a partnership, or a corporation.

The term "Secretary” means the Secretary of the Treasury. Sec. 2, act of June 2, 1924 (43 Stat. 253); sec. 2, act of Feb. 26, 1926 (44 Stat. 9); 6 U.S. C. 15.

Wherever by the laws of the United States or regulations made pursuant thereto, any person is required to furnish any recognizance, stipulation, bond, guaranty, or undertaking, hereinafter called "penal bond," with surety or sureties, such person may, in lieu of such surety or sureties, deposit as security with the official having authority to approve such penal bond, United States Liberty bonds or other bonds or notes of the United States in a sum equal at their par value to the amount of such penal bond required to be furnished, together with an agreement authorizing such official to collect or sell such bonds or notes so deposited in case of any default in the performance of any of the conditions or stipulations of such penal bond. The acceptance of such United States bonds or notes in lieu of surety or sureties required by law shall have the same force and effect as individual or corporate sureties, or certified checks, bank drafts, post-office money orders, or cash, for the penalty or amount of such penal bond. The bonds or notes deposited hereunder and such other United States bonds or notes as may be substituted therefor from time to time as such security, may be deposited with the Treasury of the United States, a Federal reserve bank, or other depositary duly designated for that purpose by the Secretary, which shall issue receipt therefor, describing such bonds or notes so deposited. As soon as security for the performance of such penal bond is no longer necessary, such bonds or notes so deposited shall be returned to the depositor: Provided, That in case a person or persons supplying a contractor with labor or material as provided by the Act of Congress, approved February 24, 1905 (33 Stat. 811), entitled "An Act to amend an Act approved August thirteenth, eighteen hundred and ninety-four, entitled 'An Act for the protection of persons furnishing materials and labor for the construction of public works,'" shall file with the obligee, at any time after a default in the performance of any contract subject to said Acts, the application and affidavit therein provided, the obligee shall not deliver to the obligor the deposited bonds or notes nor any surplus proceeds thereof until the expiration of the time limited by said Acts for the institution of suit by such person or persons, and, in case suit shall be instituted within such time, shall hold said bonds or notes or proceeds subject to the order of the court having jurisdiction thereof: Provided further, That nothing herein contained shall affect or impair the priority of the claim of the United States against the bonds or notes deposited or any right or remedy granted by said acts or by this section to the United States for default upon any obligation of said penal bond: Provided further, That all laws inconsistent with this section are hereby 80 modified as to conform to the provisions hereof: And provided further, That nothing contained herein shall affect the authority of courts over the security where such bonds are taken as security in judicial proceedings, or the authority of any administrative officer of the United States to receive United States bonds for security in cases authorized by existing laws. The Secretary may prescribe rules and regulations necessary and proper for carrying this section into effect. In order to avoid the frequent substitution of securities such rules and regulations may limit the effect of this section, in appropriate classes of cases, to bonds and notes of the United States maturing more than a year after the date of deposit of such bonds as security. The phrase "bonds or notes of the United States” shall be deemed, for the purposes of this section, to mean any public-debt obligations of the United States and any bonds, notes, or other obliga tions which are unconditionally guaranteed as to both interest and principal by the United States. Sec. 1029, act of June 2, 1924 (43 Stat. 349); sec. 1126, act of Feb. 26, 1926 (44 Stat. 122); sec. 7, act of Feb. 4, 1935 (49 Stat. 22); 6 U. 8. C. 15.

541. Bidders' bonds.-And he may require every bid to be accompanied by a written guaranty, signed by one or more responsible persons, to the effect that he or they undertake that the bidder, if his bid is accepted, will, at such time as may be prescribed by the Secretary of War, or the officer authorized to make a contract in the premises, give bond, with good and sufficient sureties, to furnish the supplies proposed or to perform the service required. If after the acceptance of a bid and a notification thereof to the bidder he fails within the time prescribed by the Secretary of War or other duly authorized officer to enter into a contract and furnish a bond with good and sufficient security for the proper fulfillment of its terms, the Secretary or other authorized officer shall proceed to contract with some other person to furnish the supplies or perform the service required, and shall forthwith cause the difference between the amount specified by the bidder in default in the proposal and the amount for which he may have contracted with another party to furnish the supplies or perform the service for the whole period of the proposal to be charged up against the bidder and his guarantor or guarantors, and the sum may be immediately recovered by the United States for the use of the War Department in an action of debt against either or all of such persons. Act of Apr. 10, 1878 (20 Stat. 36); act of Mar. 3, 1883 (22 Stat. 487); 5 U. S. C. 218.

542. Bonds of contractors.---That (a) before any contract, exceeding $2,000 in amount, for the construction, alteration, or repair of any public building or public work of the United States is awarded to any person, such person shall furnish to the United States the following bonds, which shall become binding upon the award of the contract to such person, who is hereinafter designated as "contractor":

(1) A performance bond with a surety or sureties satisfactory to the officer awarding such contract, and in such amount as he shall deem adequate, for the protection of the United States.

(2) A payment bond with a surety or sureties satisfactory to such officer for the protection of all persons supplying labor and material in the prosecution of the work provided for in said contract for the use of each such person. Whenever the total amount payable by the terms of the contract shall be not more than $1,000,000 the said payment bond shall be in a sum of one-half the total amount payable by the terms of the contract. Whenever the total amount pay. able by the terms of the contract shall be more than $1,000,000 and not more than $5,000,000, the said payment bond shall be in a sum of 40 per centum of

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