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What’s that called?

Reader and friend Larry Head was doing what The Legal Genealogist so often recommends — poking around the statute books — when he realized that he wasn’t entirely sure what to call something he was coming across in those books.

off.bondIt was a surety bond, to be posted by federal appointees, but what exactly it was called and how exactly it worked… those were not so clear.

The issue came up when Larry was reviewing an early federal statute creating four federal land offices to handle the sale of lands in what was then the Northwest Territory — that vast swath of land that later became the States of Ohio, Indiana, Illinois, Michigan, Wisconsin and Minnesota.1

The law created four land offices, “one at Cincinnati…; one at Chilicothe…; one at Marietta…; and one at Steubenville…” and:

Each of the said offices shall be under the direction of an officer, to be called “The Register of the Land Office,” who shall be appointed by the President of the United States, by and with the advice and consent of the Senate, and shall give bond to the United States, with approved security, in the sum of ten thousand dollars, for the faithful discharge of the duties of his office ; and shall reside at the place where the land office is directed to be kept.2

Then a little later in the statute, the law provided that payments received for the lands were either to be paid

to the treasurer of the United States or to such person or officer as shall be appointed by the President of the United States, with the advice and consent of the Senate, receiver of public monies for lands of the United States, at each of the places respectively where the public and private monie of public sales of the said lands are to be made ; and the said receiver of public monies shall, before he enters upon the duties of his office, give bond with approved security, in the sum of ten thousand dollars, for the faithful discharge of his trust…3

So… both the Registers and the Receivers had to give bond with approved security. What was that bond called, and how did it work?

Larry originally thought the bond might be called a performance bond, but quickly came to the conclusion that wasn’t right. And, sure enough, a performance bond is a special term that means something entirely different: it’s the kind of bond that’s required of a contractor who’s doing some work that ensures that the work will be done right. If it isn’t, the bonding company will either hire another contractor to fix it or pay the property owner any financial damages.4

What it is usually called is an official bond: “A bond given by a public officer, conditioned that he shall well and faithfully perform all the duties of the office.”5

The approved security? That was the term for someone “who becomes surety or guarantor for another.”6 A surety, in turn, is defined as “one who at the request of another, and for the purpose of securing to him a benefit, becomes responsible for the performance by the latter of some act in favor of a third person…”7

In the early days, what you had was other people essentially co-signing the official’s promise to faithfully discharge the duties of his office. At that point, nobody actually paid any money: the official and his sureties simply promised, in writing, that they would pay if the bond was ever forfeited for not doing the job. That in part was why the security had to be approved: the approving authority (the court or whoever was accepting the bond) had to be sure the people serving as security were actually in a financial position to pay up if the need ever arose.

By the end of the 19th century, this co-signed promise had pretty much been replaced by what are effectively insurance policies from bonding or surety companies. As Black’s Law Dictionary explains, a surety company is “a company, usually incorporated, whose business is to assume the responsibility of a surety on the bonds of officers, trustees, executors, guardians, etc., in consideration of a fee proportioned to the amount of the security required.”8

There are of course lots of different kinds of bonds: marriage bonds; bonds posted by guardians, executors or administrators of an estate; bail bonds; appeal bonds. But the specific term for this particular kind of bond: official bond.


SOURCES

  1. See Wikipedia (http://www.wikipedia.com), “Northwest Territory,” rev. 8 Dec 2014.
  2. §1, “An Act to amend the act intituled ‘An act providing for the sale of the lands of the United States, in the territory northwest of the Ohio, and above the mouth of Kentucky river,’” 2 Stat. 73 (10 May 1800).
  3. Ibid., §6.
  4. See generally Juan Rodriguez, “Performance Bonds Basics,” About.com Money: Construction (http://construction.about.com : accessed 16 Dec 2014).
  5. Henry Campbell Black, A Dictionary of Law (St. Paul, Minn. : West, 1891), 845, “official bond.”
  6. Ibid., 1073, “security.”
  7. Ibid., 1142,“ surety.”
  8. Ibid.
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