New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-07-02
NEW METHOD or GIVING BONDS.

| COMMENTS ON THE LAW AUTHORIZING CORPORA
TONS TO BECOME SECURITY FOR FAITHFUL
| PERFORMANCE OF DUTY.
law was signed by Governor Cornell June
13 which, IL 1t IL successful in its operation rs
promoters anticipate, promises effect a revolution IN
the methods OF giving bonds furnishing security
many embarrassing and often disastrous
connected with the present method OF giving security
either for the faithful performance trusts or as col
lateral security in judicial business proceedings
led to many complaints and % attempts to correct
these evils. The present system frequently operates
badly for the trustee well for the surety In the
first place, II Is often difficult for worthy persons
when appointed administrators receivers to any
similar places OF trust to obtain friends both able and
willing to go upon their bonds 1t is at the best,
barrassng and somewhat distressing thing for "A man to
go about among his acquaintance with the request.
These acquaintance when able pccuniarily
come suretes often consent with great reluctance
ref'isc outright They have all OF them too many
instances in which the been called upon to
pay where the trustee has good intentions and
was an honest man. Then, too, II happens that the per-
whose interests supposed be secured by the
undertakings or bonds find, when the emergency
that the suretes responsible persons and their
interests are destroyed without power OF redress.
Inc remedy provided for by the new bill Is to be T.
fortcd by substituting organized companies large
capital In the place of individuals sureties and by
authorizing them to guarantee the fidelity the persons
holding positions OF private public trust 1t is said
that in England such bonds have been for many years
received in preference to the bonds OF private
30 that an individual bond is rarely given. this
the first time in the history the United States where
Legislature has authorized the courts accept corporate
bonds In proceedings before them This present pro-
vidcs that: Whenever any person, who hercaf
ter may he required permitted by law to make,
cute bond undertaking with security condi-
toned for the faithful performance of any duty for
the doing not doing bond or under
taking specified, any head of department. surrogate
judge sheriff dstricattorney or any other officer who
Is now or shall hereafter be required approve
hccncy OF any such bond undertaking. may, in tho
discretion OF such officer accept such bond
ing and approve the whenever the conditions
such bond or undertaking guaran by a company
duly organized authorized to do business under the
laws OF this State, and authorized guarantee the dcl
ity Of persons holding positions OF public private
trust, and all such corporations hereby
full power and authority to guarantee such bonds
undertakings but this net shall not prevent justlca-
ton the OF such company through its officers
required by law OF other surctics."
II IL further provided that the guarantee Of any such
company shall not be accepted whenever its liabilities
shall exceed it's assets. When its liabilities exceed it's
assets the superintendent OF the Department
DAYS md If it is not paid he IL to publ sh the
In tine state Paper and the company is to do
The me-. act does not apply to bonds IN criminal cases
judges lawyers others some Of which Is favoraSe
and some not Surrogate Calvin says he thinks the plan
that there shall be doubt about the inancial condi
ton OF tnc company seeking act under this
inc diliculty VIII be that questions viii constantly he
arising M to the relative amounts of its and it's
habtes, and to the possibility OF its suddenly be-
coming insovcnt or unable to act under the law This
would necessarily require judicial investigations and the
inquiry might OFTEN DC too expensive IL
Judge Van Hoesen, In the Court of Common Pleas
Chambers, June 20 received application for the APP
prevail Of bond OF this Sort guaranteed by the only
company that has yet been organized this purpos
namely the Fidelity ana Casualty Company This un-
dertakng was filed up in the ordinary way with sure
Ties ana upon II was an Endorsement signed by William
ing the performance OF the undertaking. Judge Van
1oescn said that from the first reading the law he
nhd supposed that II was intended that the company
should ctuay be substituted in the place ordinary
individual suretics. lie thought that the execution OF
the plan In the form proposed In this application might
result badly because the person seeking remedy from
the bond or undertaking would have tn look
nTst, 10 inc suretiea as usual, and after
ward to tho company. This was however
matter Tor futurc determination, and II likely that
| OF the language OF the statute. Judge Van Hocscn
thought that tho work of such II company must necess
rily be limited for II IL had large capital Ii would
only require short time before the amount its labil-
tues on the bonds would equal its assets.
Judge GOepp or the Marine Court thought that great
care would have to be exercised by Judges and other
officers to prevent irresponsible companies taking adj
vantage OF the law After judges had begun To
cept the guarantee OF company 1t might often happen
that thcy would continue to do with confidence and
so would not know Of its actual condition until 1t sud
denly became insOlvent
"A particular deficiency" Judge GOepp said occurs
IN tne tnird section In estimating the condition
such company the superintendent shall allow assets
only sucR as ARE authorized under existing laws the
time Now there IL no law authorizing asset every
thing il an asset except, perhaps, goodwill There is
therefore, no guarantee whatever extended by this"