CHAPTER XVIII BOND The comparative values of personal Bonds and of surety company Bonds, and of certified checks, have been discussed previously. This chapter is concerned mainly with the form of Bonds. The Contract Bond adopted by the American Railway Engineering Association has the following form: lawful money of the United States of America (or Canada, as the case may be), to be paid to said..... ....its successors and assigns, to which payment the undersigned, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns. The Condition of this Obligation is that if... Contractor, shall faithfully furnish and do everything required in the contract, executed in writing, dated.... ...19.. Company, this obligation shall become of no effect; other wise it shall continue in full force. 19... . (SEAL) This is substantially the same in form as that used by the Cambridge Bridge Commission, the principal point of difference being that the latter refers to the "foregoing Contract" contained probably in a single pamphlet, while the Bond above describes the Contract. The Cambridge Bridge form is this: That the undersigned are held and bound unto the Cambridge Bridge Commission in the sum of two hundred thousand (200,000) dollars, lawful money of the United States of America, to be paid to said Commission or its assigns, to which payment, well and truly to be made, the undersigned jointly and severally bind themselves, their heirs, executors, administrators, successors and assigns. The Condition of this Obligation is, that if the party designated as Contractor in the foregoing contract shall faithfully furnish, and do everything required therein of said party, this obligation shall become of no effect, otherwise it shall continue in full force. Signed, sealed and delivered this January 20, 1904. Attest: THE CITY TRUST SAFE DEPOSIT AND GUARANTY (SEAL) Charles H. Laird, Jr., Asst. Secty. The Corporation or Company signing above is incorporated in the State of Pennsylvania, and has its usual place of business in Massachusetts at 23 Central Street, Boston. The distinguishing feature of either of these is its simplicity. The Contractor has made his Contract and agreed to furnish and to do certain things. A failure to keep his agreement brings the Bond into action. If the Contract recites all that is required of the Contractor, this simple Bond is sufficient. If the first draft of the Contract omits any point ordinarily specially covered in the Bond, the Contract should be revised (before the letting) so that in its final form it will cover everything necessary. For instance, the indemnity clause in the Uniform Contract Form makes an indemnity clause in the Bond superfluous. In the above forms of Bond, the Contractor is not made the "principal" of the Bond. Why should he be so made the principal? If he does not do what he agreed in his Contract, if he defaults, why should one have further disagreement and trouble with him? The direct way is to reach the surety. A lawsuit with the surety may be unnecessary if the surety is businesslike. The surety will, no doubt, have an agreement with the Contractor by which to recoup himself if the Contractor is solvent, but that is his affair. It is cleaner cut for the railroad, or the City, to look to the surety directly, rather than to straddle between the Contractor and the surety. The question may arise whether a surety company will sign a Bond in the above form. An answer to this is that the following companies did sign the above form of Bond of the Cambridge Bridge Commission: The Etna Indemnity Company. United States Fidelity and Guaranty Company. The City Trust, Safe Deposit, and Surety Company of Philadelphia. American Surety Company of New York. Empire State Surety Company. National Surety Company. Fidelity and Deposit Company of Maryland. Another form, even shorter, but in essentials the same, was signed by the Metropolitan Surety Company and is shown here: The undersigned surety company hereby binds itself, its successors and assigns, to pay to the Cambridge Bridge Commission the sum of two thousand (2,000) dollars. This obligation is upon the condition that if the party to the contract hereto annexed, other than the city, shall faithfully furnish and do everything therein required of the party, the obligation shall become of no effect, otherwise it shall continue in full force. Signed, sealed and delivered this January 3, 1907. (SEAL) METROPOLITAN SURETY COMPANY, Attest: Harry A. Chandler, Attorney in Fact. Corporation is of the state of New York.' President is John F. Candlet. Treasurer is Frank A. Condon. Place of business in Boston is 85 Water Street. That we,.. as principal and.. as surety are held and firmly bound unto the Commonwealth of Massachusetts in the sum of... lawful money of the United States of America, to be paid to the Commonwealth, to which payment, well and truly to be made, we bind ourselves, our respective heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents. Whereas, the said principal has made a contract with the Commonwealth, bearing date the.... ...day of...... ..1906, for..... Now, the Condition of this Obligation is such that, if the said principal shall in all things stand to and abide by and well and truly keep and perform all the agreements, terms and conditions of said contract on his part to be kept and performed, and shall also pay for all labor performed or furnished, and for all materials used in the carrying out of said contract, then this obligation shall be void; otherwise it shall remain in full force and virtue. In Witness Whereof, we hereunto set our hands and seals this.... day of.... ..in the year nineteen hundred and..... .(SEAL) .(SEAL) And the following differs mainly in phraseology from the form next above: E. BOND FOR PERFORMANCE OF CONTRACT Know all Men by These Presents, That we.... as principal; and as surety, are held and firmly bound unto The City of New York, in the sum of.. ...dollars ($ .), lawful money of the United States of America, to be paid to The City of New York, or to its certain attorney, successors or assigns, for which payment, well and truly to be made, we bind ourselves, our successors and our several and respective heirs, executors and administrators, jointly and severally, firmly by these presents. Sealed with our seals. Dated this... .one thousand nine hundred and nine. Whereas, the above bounden... .day of by an instrument in writing, bearing even date with these presents, has contracted with The City of New York to furnish all the materials and labor for, and in good, sufficient and workmanlike manner, construct Hill View reservoir and portions of Yonkers and Van Cortlandt siphons in the City of Yonkers, Westchester county, New York: Now, Therefore, the condition of the above obligation is such, that if the said.... shall well and truly, and in a good, sufficient and workmanlike manner, perform the said contract, and each and every provision therein contained on his part to be done and performed, and complete the same in accordance with the terms and provisions therein stipulated, and in each and every respect comply with the conditions therein contained, then this obligation shall be void, otherwise it shall remain in full force and virtue. (SEAL). .Contractor. F. The following is more extensive: BOND Know all Men by These Presents, That..... ..of. hereinafter called the Sureties are held and firmly bound unto The City of New York, hereinafter called the City, in the sum of forty thousand dollars ($40,000) lawful money of the United States of America, to be paid to the City, for which payment well and truly to be made the Contractor and the Sureties do hereby bind themselves and their, and each of their, executors, administrators, successors and assigns firmly by these presents, as follows: The Contractor to be so held and bound for the full amount of the said sum of forty thousand dollars ($40,000) and |