sureties and amount. * 525. Examination as to sufficiency of Hereafter every officer required by law to take and approve official bonds shall cause the same to be examined at least once every two years for the purpose of ascertaining the sufficiency of the sureties thereon; and every officer having power to fix the amount of an official bond shall examine it to ascertain the sufficiency of the amount thereof and approve or fix said amount at least once in two years and as much oftener as he may deem it necessary. * Sec. 5. act of Mar. 2, 1895 (28 Stat. 807), making appropriations for legislative, executive, and judicial expenses; U. S. C. 6: 2. Notes of Decisions Examination by United States attorney.United States attorneys are not authorized, and can not be required by the Navy Department, to make examination into the sufficiency of sureties upon official bonds provided for in this section. (1895) 21 Op. Atty. Gen. 154. 526. Renewal.-* * Hereafter every officer whose duty it is to take and approve official bonds shall cause all such bonds to be renewed every four years after their dates, but he may requife such bonds to be renewed or strengthened oftener if he deem such action necessary. In the discretion of such officer the requirement of a new bond may be waived for the period of service of a bonded officer after the expiration of a four-year term of service pending the appointment and qualification of his successor: * * *. Sec. 5, act of Mar. 2, 1895 (28 Stat. 808), making appropriation for legislative, executive, and judicial expenses; U. S. C. 6: 3. All disbursing officers of the pay department shall renew their bonds, or furnish additional security, at least once in four years, and as much oftener as the President may direct. R. S. 1192; U. S. C. 10: 1314. The provsions of R. S. 1192 are now applicable to officers of the Finance Department, created by sec. 9, act of June 4, 1920, 68, ante. Notes of Decisions Effect of renewal bond on liability of surety on original bond.-Bonds of officers of the United States given for the faithful discharge of their duties which are not in terms limited to a specified period expressed in dates remain in full force and effect so long as such officers continue in office, even though another and different bond be given by way of renewal. (1906) 26 Op. Atty. Gen. 70. A provision in an official bond shortening the life of the bond from the entire period during which the office is held until such time as "a new official bond shall be accepted by the proper authority and substituted" therefor runs counter to the statute and would be without effect. In its other particulars the bond would be good. Suspension of officer as involving suspension of bond.-The suspension of an officer involves a suspension of his bond; the bond required of the person designated to take the place of the former being substi tuted therefor while the person so desig nated is performing the duties of the office. (1885) 18 Op. Atty. Gen. 318. Liability of sureties after principal ceases to hold office. The sureties of a public officer are not liable to the United States for moneys improvidently advanced to such party by the Government after he shall have ceased to hold office. (1856) 8 Op. Atty. Gen. 7. Payment of old debt or defalcation from moneys in which new sureties are interested. The moneys of the second term of an officer in which his new sureties are interested can not be taken to pay off an old debt or defalcation with which they had no concern. U. S. v. Able (D. C. 1872), Fed. Cas. No. 14417. Liability on Navy agent's bond.-The sureties on the bond of a Navy agent are liable only for his acts during the continuance of his commission. (1865) 11 Op. Atty. Gen. 286. * Provided, That the nonper 527. Liability of principal and sureties.formance of any requirement of this section on the part of any official of the Government shall not be held to affect in any respect the liability of principal or sureties on any bond made or to be made to the United States: Provided further, That the liability of the principal and sureties on all official bonds shall 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); U. S. C. 6:3. 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); U. S. C. 6:14. Notes of Decisions Bonds given to superior officers.-This act does not apply to bonds voluntarily given by an employee or officer of the United States to a superior officer. (1909) 28 Op. Atty. Gen. 28. Legality of bond extorted against requirements of law. A bond extorted against the requirements of statute is illegal. U. S. v. Tingey (1831), 5 Pet. 115, 129, 8 L. Ed. 66. 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); U. S. C. 6:4. Notes of Decisions due, does not require the secretary to notify sureties on officer's bond as required by this section. (1923) 34 Op. Atty. Gen. 5. Cited without specific application.-U. S. v. Maxwell (D. C. 1923), 286 Fed. 740, reversed U. S. v. Cash (C. C. A. 1923), 293 Fed. 584. Effect of certificate of Secretary of Navy relieving disbursing officer from responsibility. Where the Secretary of the Navy makes a certificate under Act of July 11, 1919 (41 Stat. 132), relieving officer from responsibility for loss or deficiency, a subsequent notice from the Comptroller General to the secretary that loss or deficiency is still charged against the officer and is 530. Same; 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 shall 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); U. S. C. 6:5. The General Accounting Office (see 1665, post), rather than the Treasury, would probably now make the statement provided for in this section. Notes of Decisions Conflict of laws.-The liability of sureties on a bond given by a Navy agent at New Orleans, conditioned for the accounting for public moneys, is governed by the rules of the common law. His accountability being at Washington, and the bond being joint and several, each is bound for the whole. Contribution between the sureties is a matter in which the United States has no concern. Cox v. U. S. (1832), 6 Pet. 172, 203. When limitations begin to run. The five year limitation fixed by this section within which suits may be brought upon the official bonds of disbursing officers of the Government begins to run from the time the accounting officers of the Treasury make the statement of the account showing an indebtedness to the United States. (1899) 22 Op. Atty. Gen. 611. Whether the accounting officer makes the statement showing an indebtedness to the United States as early as he should, or does not, the limitation fixed by this section begins to run only from the time that the accounting officer of the Treasury makes the statement of account showing an indebtedness to the United States, as provided in that section. (1899) 22 Op. Atty. Gen. 613. Discharge of sureties. This section is absolute as regards the discharge of sureties if suit on the bond be not instituted "within five years after such statement of said account by the accounting officer of the Treasury. It makes no exception in case the accounting officer does not make such statement as early as he should, or when a deficiency is discovered by him. (1899) 22 Op. Atty. Gen. 612. Laches. The right of the United States to recover on the bond of an officer for a defalcation can not be affected by the laches of its other officers or agents in permitting such officer to remain in office after knowledge of prior defalcations. U. S. v. Campbell (1909), 170 Fed. 318; judgment reversed (1912), 224 U. S. 99. Cited without specific application.-U. S. v. Belknap (C. C. 1896), 73 Fed. 19, 21; U. S. v. Cash (C. C. A. 1923), 293 Fed. 584. 531. Same; 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. S. 3468; U. S. C. 31: 193. Notes of Decisions Operation and effect in general.-The right of a surety to a preference under this section and 724, post, giving preference to debts due the United States, is a creature of statutory law and exists only in cases where the facts fall strictly within provisions of statute. United States Fidelity & Guaranty Co. v. Porter (D. C. 1924), 3 Fed. (2d) 57. Persons who become entitled to priorityIn general.-Under 724, post, giving priority to debts due the United States by an insolvent, the taking over of a bank by the State bank commissioner of Oklahoma was not insolvencey, nor an "act of bankruptcy," within sec. 1, act of July 1, 1898 (30 Stat. 546), as amended by sec. 3, act of Feb. 5, 1903 (32 Stat. 797), so as to give deposits of the United States priority over other deposits, since the bank commissioner does not necessarily take possession because of bank's insolvency, within the meaning of Federal laws, and hence a surety on a bond to secure such deposit was not entitled to priority under this section. Strain v. U. S. Fidelity & Guaranty Co. (C. C. A. 1923), 292 Fed. 694, decree affirmed (1924), 264 U. S. 570 (upon authority of U. S. บ. Oklahoma (1923), 261 U. S. 253). The surety on a bond given to secure a Government deposit in a bank which has become insolvent is entitled to be subrogated to the priority of the Government against the assets of the bank. State v. Kilgore State Bank (Neb. 1924), 201 N. W. 901. Thus, a surety, who on the insolvency of the bank paid the amount of a deposit by the United States of money held in trust for Indians on a reservation, was entitled to priority over the general creditors of the bank. U. S. Fidelity, etc., Co. V. Bramwell (D. C. 1923), 255 Fed. 331. affirmed (C. C. A. 1924), 299 Fed. 705. which was affirmed (1926), 269 U. S. 483. Actions and proceedings to enforce priority. In suit by surety on deposit of Indian funds under this section and 724, post, to have its claim declared a preference against funds of insolvent State bank in hands of State commissioner of finance final decree of dismissal of former action was held to estop plaintiff from suing on same cause of action, though allegations that defendant took possession of funds by virtue of assignment were first made in second action. U. S. Fidelity & Guaranty Co. v. Porter (D. C. 1924), 3 F. (2d) 57. In such suit, evidence was held insuffi. cient to show that Idaho State finance commissioner took charge of affairs of bank under an assignment by resolution of board of directors, where such resolution did not purport to be an assignment, but simply a determination to discontinue business. Id. A surety paying the debt due by his bankrupt principal, is not by this section subrogated to any privilege or advantage possessed by the United States by reason of its sovereignty. Hence the surety on bond given to the United States, which settled and paid its obligation on the bond after the principal had been adjudged a bankrupt, is not entitled to prove its claim against the bankrupt estate after expiration of the year allowed for filing claims. While it is admitted that the surety company succeeded to all the rights of the United States against the bankrupt, it is not understood that R. S. 3468 (this section), upon which the surety company relies, was intended to confer or does confer all the advantages which the United States might assert against the bankrupt. The section referred to merely gives to the surety the right to bring suit in its own name for the recovery of all moneys which the surety has paid, and it gives him in addition the same priority in the assertion of that right which is given to the United States. But the question here does not relate to priorities; neither does it involve the right of the surety to sue in its own name. It relates to an advantage which the United States possesses as a sovereign and which individuals do not possess. In re J. Menist Co., Inc. (C. C. A. 1923), 289 Fed. 229. 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); U. S. C. 6: 6. Notes of Decisions Introductory.-By this section Congress has made elaborate provision for the safe use of surety companies as security upon bonds required in court and other proceedings, and while it does not exclude Individual sureties, it offers a most convenient and stable means of obtaining indemnity against the default of parties. This is much to be preferred to individual sureties because a properly conducted Surety company makes it its business promptly to investigate and to meet its liabilities. Newton v. Consolidated Gas Co. (1924), 265 U. S. 78, affirming Consolidated Gas Co. of New York v. Newton (D. C. 1923), 291 Fed. 704. State laws restricting or authorizing dealings of surety company with the United States. This act does not create surety companies acting thereunder instrumentalities of the United States, and relieve them from compliance with the laws of, or payment of the lawful taxes in, the States in which they transact their business. FidelIty & Deposit Co. v. Pennsylvania (1916), 240 U. S. 319. If the laws of a State under which a surety company is incorporated limit the amount of liability to a certain perantage of the capital, which can be incurred on account of any one partnership or association, and if a greater amount of llability is incurred it is to be secured by a collateral agreement of indemnity, such provision is thereby made a part of its charter, and to that extent it is restricted in its dealings with the United States. (1899) 22 Op. Atty. Gen. 421. Bonds given to superior officers.-Voluntary bonds given by employees or officers of the United States to superior officers do not come within the purview of this act. (1909) 28 Op. Atty. Gen. 28. Conditions and regulations by Government officials.The act authorizing the acceptance of bonds and undertakings of Burety and fidelity companies (28 Stat. Affixing corporate seals to bonds.-An agent of a corporation appointed by an instrument under the corporate seal of the corporation, may, on its behalf, adopt a special seal, so as to make it, in executing the purpose for which he was appointed, the corporate seal of the corporation. (1908) 26 Op. Atty. Gen. 507. A corporation may adopt for the purpose and use a seal other than its corporate seal on a bond, so as to make the bond a corporate deed of the corporation. Id. Acknowledgment of bond.-An acknowledgment of a bond is not necessary. (1908) 26 Op. Atty. Gen. 507. Nature of instruments.--A bond given by a contractor for Government work, conditioned as provided by this section, is in effect two separate instruments; one securing performance of the contract to the United States, and the other the payment by the contractor of bills for labor and materials furnished, and in the latter aspect the surety is not discharged from liability by a variation of the contract which might relieve it from liability to the United States, as by a change in the site of a building. U. S. v. California Bridge & Construction Co. (C. C. 1907), 152 Fed. 559. Bonds of deputy disbursing clerks.-The surety on a bond of an acting or deputy disbursing clerk selected under sec. 8, act of Mar. 4, 1909 (35 Stat. 1027), should be |