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 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 filed 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 the 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. 3. That every company before transacting any business under this act shall deposit with the AttorneyGeneral 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 Attorney-General 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."

The conditions under which surety companies incorporated outside the State of Washington may do business within that State are prescribed in sections 3254, 3255, and 3259, Pierce's Washington Code, 1905, which provide that a copy of the articles of incorporation, duly certified, together with a certificate showing net assets of not less than $350,000, shall be filed with the insurance commissioner of the State of Washington. (Sec. 3254.) When the corporation has complied with all the provisions of the act and the insurance commissioner is satisfied that the corporation has net assets or paid up and unimpaired capital of not less than $350,000, he is directed to issue to the surety company a certificate of authority to transact business in the State. (Sec. 3255.) (Sec. 3255.) Every surety company incorporated outside the State is directed to appoint a process agent who shall reside within the State. (Sec. 3259.) Section 3256 makes it unlawful for a company to do a surety business without complying with the provisions of the act, and section 3257 imposes a penalty. These sections provide:

"SEC. 3256. It shall be unlawful for any corporation to transact business as a surety corporation in this State, unless the corporation shall have complied with all the provisions of this act, and shall have obtained a certificate of authority from the insurance commissioner as herein provided.

"SEC. 3257. Penalty: If any such surety corporation, its agent, or attorney shall do business as such in this State without having complied with the provisions of this act, said corporation, its agents or attorneys, so doing business shall be guilty of a misdemeanor and shall be subject to a fine of not less than $100 or more than $500."

I may call your attention to the fact that the question, as stated by you, is whether a bond may be accepted which has been executed by "a principal residing in a State wherein said company has not been licensed to do a surety business under the laws of said State," whereas the provisions of section 2 of the act of August 13, 1894, quoted

above, and to which you refer, require the appointment of a process agent in the judicial district where the suretyship is to be undertaken. However, inasmuch as you state that the conditions of section 2 have been complied with, and as the real purpose of your inquiry is to ascertain whether those are the only conditions which you should consider, and whether you may disregard the requirements of the State of Washington, I shall proceed upon the assumption that the question upon which you request my opinion is whether a company which has complied with the provisions of that section may properly be accepted as surety on a bond given to the United States, although the company has not been licensed to do a surety business under the laws of the State where the suretyship is to be undertaken.

It is to be observed that your question is in regard to the practice which should be adopted by your department in the future in the acceptance or rejection of bonds and does not have reference to any concrete case. In other words, the question before me is not to determine whether or not a particular bond, accepted by your department from a company which has undertaken a suretyship in a State in which it is not authorized by the laws of the State to do business, is a contract which may be lawfully enforced. I am requested to construe the act of August 13, 1894 (28 Stat. 279), and to state whether the conditions imposed by that act on companies which wish to do business with the United States outside the State of their incorporation are the only conditions to be considered by your depart

ment.

Section 3255 of the code of Washington, quoted above, makes it unlawful for a foreign surety corporation to do business in the State of Washington unless it has complied with the requirements of the act; section 3257 imposes a penalty for violation. The companies referred to in the communication from the insurance commissioner of the State of Washington have not complied with the conditions imposed by the code of that State and are all companies incorporated outside of Washington.

The Supreme Court has repeatedly held that it is a matter entirely within the power of each State to prescribe the conditions under which a corporation incorporated in another State may do business within its borders. In view of these decisions it is not to be supposed that Congress intended to confer upon a surety company, foreign to the State of Washington, the power to do business in Washington with the United States in contravention of the laws of the State of Washington. Rather it is to be inferred that Congress intended to prescribe the conditions applicable to a surety company wishing to do business with the United States in a State other than its State of incorporation, subject always to the further condition that the surety company had a right, under the laws of the State, to do business therein. The conditions imposed by Congress as to surety companies doing business outside the State of incorporation safeguard the United States in States where there are no state laws on the subject; but, where there are state requirements, the statute of August 13, 1894, is supplemental to and not exclusive of the laws of the State.

Therefore it is my opinion that your department should not accept the bond of a surety company in a State in which the company is forbidden by the laws of the State to do business.

As stated above, it is not necessary for me to determine whether a bond given to the United States in violation of the laws of a State could be enforced.

You also request my opinion as to whether, under the act of August 13, 1894, "a process agent is necessary in the State where the principal resides, or in the State where the contract is to be performed or carried out, or both."

In this connection section 5 of the act referred to is in point:

"SEC. 5. 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 purposes 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."

Section 2 above quoted requires the appointment of a process agent in the judicial district wherein the suretyship is to be undertaken. Of this section it is said in volume 25, Opinions of Attorneys-General, 600: "The obvious purpose of section 2 is to bring surety companies within the jurisdiction of the court in the district where the contract is to be performed."

The act of February 24, 1905 (33 Stat. 812), is primarily for the protection of material men and laborers on public works, and provides that any person who has furnished labor or materials in the construction of a public building for which payment has not been made by the contractor shall have the right to intervene in any action instituted by the United States on the bond of the contractor; and if no suit is brought by the United States for a period of six months such laborers or material men are, under certain conditions, "authorized to bring suit in the name of the United States in the Circuit Court of the United States in the district in which said contract was to be performed and executed, irrespective of the amount in controversy in such suit, and not elsewhere, for his or their use and benefit, against said contractor and his sureties, and to prosecute the same to final judgment and execution."

In the opinion referred to, the necessity of reading all these laws together is made apparent. It is pointed out that, while section 2 of the act of 1894 does not specifically enact that a "process agent" shall be appointed in the judicial district wherein the principal resides, such an appointment is necessary in order to carry out the provisions of section 5 of the same act, which authorizes suit to be brought in the district in which the principal resides.