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collector himself; but each collector shall, in every respect, be responsible, both to the United States and to individuals, as the case may be, for all moneys collected, and for every act done or neglected to be done, by any of his deputies while acting as such.”
The statute contains no provision requiring that the bonds given by deputies to their superior, and which run to the collector and not to the United States, shall be approved by the head of the department or other officer. I understand also that the custody of such bonds remains with the collector personally, and not as an officer of the United States. They are not filed as are bonds given to the United States.
Under these circumstances I am of the opinion that the act of August 5, 1909, regulating the rate of premium, does not apply to such bonds. That act applies to bonds running to the United States and which are accepted in each case by the properly designated officer of the United States.
For the same reason I am of the opinion that the act of August 5, 1909, does not apply to bonds voluntarily given by an employee or officer of the United States to a superior officer.
Second. Referring to the act of August 13, 1894, and to the communication of this department of September 27, above referred to, you state:
“In reply to the further inquiry of this department as to 'whether or not bonds of subordinates given to their superiors which are not required by law, or which do not run directly to the United States, may be executed by other surety companies than those certified under the act of August 13, 1894,' you state that the surety on the bonds of acting or deputy disbursing officers of the class indicated above appointed under the act of March 4, 1909, should be such as are authorized under the act of August 13, 1894, In thus confining your reply to the case of deputy or acting disbursing clerks of the executive departments, it appears that the general inquiry of this department has not been fully understood. For your information I will therefore state that the inquiry was intended to more particularly apply to the large number of subordinates in the customs, subtreasury, and other services under this department who give voluntary bonds to their superior officers in pursuance of no specific requirement of law.
"For these reasons the department would appreciate a more general ruling on the question herein before propounded, namely, whether or not the bonds of subordinates given to their superiors which are not required by law or which do not run directly to the United States may be executed by other companies than those certified under the act of August 13, 1894."
Replying to your second question it is evident that the purpose of the act of August 13, 1894, was to establish regulations which should protect the United States in regard to bonds accepted by it.
Section 1 of that act provides (28 Stat. 279):
“Be it enacted, etc., 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.”
The proviso in the first section requires that the bond be approved by the head of department required to approve or accept the same." On the other hand, the voluntary
bonds to which you refer are not given pursuant to any specific statute, but are the result of the mutual agreements reached between various subordinates and their superior officers. Such bonds do not have to be approved or accepted by the head of a department, nor is there any officer required by statute to approve or accept the same. Accordingly they do not come within the purview of the act of August 13, 1894.
Third. Referring to the letter of this department of September 14, 1909 (27 Op. 598), addressed to the Secretary of the Interior, and construing the term "like bond” used in the act of August 5, 1909, you state:
“This department has not selected any one certain charge as the base of computing the rate on any class, but has used the rate paid in 1908 by the incumbent of a particular office as the base for computing the rate to be paid for a like bond for the incumbent of the same office during the year 1909. To follow any other course would contemplate first a classification, and second, the ascertaining of an average rate on the class.
If the average rate on the class should be computed for each company separately, the department would be confronted with the additional difficulty of having certain companies which executed no bonds during 1908 in a given class.
“In the light of the foregoing, will you please advise me if the Secretary of the Treasury is authorized under the law to compute an average rate upon bonds as classes, to be paid to the various bonding companies, and, if so, whether such classification should be based upon the general character of duties performed, or upon a correct measure of liability wherein the loss experience of the companies is given proper weight. Should you decide that this duty is not imposed upon the Secretary of the Treasury by the present law, will you please advise me whether the present practice of the department is correct, of using the rate paid by the incumbent of any particular oflice during 1905, as the base for computing the rate which shall be paid upon the bond of the incumbent of the same office under the act of August 5, 1909."
In its letter to the Secretary of the Interior under date of September 14, 1909 (27 Op. 601), referring to the term “like bond” this department said:
“What is evidently intended is that the charge for any bond shall not be more than 35 per cent above the rate paid last year on any bond belonging to the same general class, provided, of course, that the charge paid last year did not constitute some isolated instance of an unusual or extortionate premium. In other words, the departments in giving effect to this statute are authorized to accept any bond the charge for which is not more than 35 per cent above that exacted in 1908 for other bonds of like character, and, in determining what the charge was last year for other bonds of like character, they may exclude any premium which was so high as to be outside the range of the usual or customary charge, and include any charge, even though it be the highest paid, if it be not so high as to fall within the inhibition above stated.”
This holding does not preclude your department from “using the rate paid by the incumbent of any particular office during 1908, as the base for computing the rate which shall be paid upon the bond of the incumbent of the same office under the act of August 5, 1909," provided the rate paid by the incumbent during 1908 did not constitute an “isolated instance of an unusual or extortionate premium.” Respectfully,
WADE H. ELLIS,
Assistant to the Attorney-General. Approved:
GEORGE W. WICKERSHAM. The SECRETARY OF THE TREASURY.
BONDS OF SURETY COMPANIES-PROCESS AGENTS.
The Treasury Department should not accept the bond of a surety com
pany in a State where the company is forbidden by the laws of the State to do business, notwithstanding the company may have complied with the provisions of section 2 of the act of August 13, 1894.
(28 Stat. 279.) The act of August 13, 1894, requires the appointment of a process agent
in the district where the principal resides and also in the district where the contract is to be performed.
DEPARTMENT OF JUSTICE,
October 28, 1909. SIR: I have the honor to acknowledge receipt of your letter of the 16th ultimo in which you request my opinion " as to whether or not a company authorized to transact a surety business under the act of Congress of August 13, 1894, which has complied with the provisions of section 2 of that act, may properly be accepted as surety on a bond given to the United States 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.”
You state that the question has arisen by reason of the following communication received by you from the insurance commissioner of the State of Washington:
"In looking over your circular, form No. 356, division of appointments, revised to August 1, 1909, in reference to companies organized to be accepted as sureties on federal bonds, I note among the list several companies not authorized to do business in the State of Washington, which you have listed as acceptable in either the eastern or western divisions of this State, and which according to your circular have appointed process agents. The companies referred to, and which are not authorized to do business in the State of Washington, are as follows: Pacific Surety Company of California; Illinois Surety Company, Chicago; Federal Union Surety Company, Indianapolis; Peoples Surety Company of Brooklyn; United States Surety Guarantee Company of New York; Bankers Surety Company of Cleveland; and Citizens Trust and Guaranty Company of West Virginia.
“As the companies above named have not complied with the laws of this state governing companies of this kind, it would be unlawful for them to issue, or for any party to accept from them, indemnity bonds of any kind."
The requirements imposed by the act of Congress of August 13, 1894 (28 Stat. 279) are as follows:
“SEC. 2. 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 in which its principal office is located nor beyond the limits of the