Chap. 661.—An ACT to regulate and contro] guaranty, trust, indemnity, fidelity
and other like companies having for their purpose or oneof their purposes to
become security for the faithful performance of any trust, duty, contract,
agreement or bond, public or private, official or otherwise, or to assume any
duty or obligation of like nature as principal or otherwise, or to become fidu-
ciary.

=e Approved March 6, 18H.

1. When such companies not to conduct business in this state.—
Be it enacted by the general assembly of Virginia, That no guaranty,
trust, indemnity, fidelity or other company having for its purpose t
become security for the faithful performance of any trust, duty, con.
tract, agreement ar bond, public or private, official or otherwise, or tc
assume any duty or obligation of like nature as principal or other.
wise, or to become fiduciary, shall conduct any business in this state
until such company shall have complied with the provisions of thi:
act.

2. Appointment of agent; on whom process may be served.—Every
such company not incorporated by the laws of this state shall, by a
written power of attorney, appoint a citizen of this state, residing in
the city of Richmond, its agent, upon whom may be served all law-
ful process against such company, and who shall be authorized ta
enter an appearance in its behalf. A copy of such power of attor-
ney, duly certified and authenticated, shall be filed with the auditor
of public accounts, and copies thereof, duly certified by the audi-
tor, shall be received as evidence in all courts of this state.

3. If agent die, another to be appointed; where service of process
may be on auditor.—If any such such agent shall be removed, resign,
die, become insane or otherwise incapable of acting, it shall be the
duty of the company to appoint another agent in his place, as pre-
scribed in the preceding section, and until such appointment is made,
or during the absence of any agent of such company from this state,
or if no such agent be appointed as prescribed by preceding section,
service of process may be upon the auditor of public accounts with
like effect as upon an agent appointed by the company. The officer
serving such process upon the auditor shall immediately transmit a
copy thereof by mail to the company and state such facts in his re-
turn.

4. Effect of judgment.—A judgment, decree or order of court en-
tered or made after service of process as aforesaid, shall be as valid
and binding on said company as if it had been incorporated by the
general assembly and served with process in this state.

5. Contract valid.—Although such company may become surety
for the faithful performance of any trust, duty, contract, agreement
or bond, public or private, official or otherwise, or assumed any duty
or obligation of like nature, as principal or otherwise, or qualified
as fiduciary without conforming to the requirements of this act, the
undertaking or obligation shall be valid, whether said company was
incorporated by the laws of this state or not.

6. Bond to be given by company.—Every such company not in-
corporated by the laws of this state shall, before conducting any
business as aforesaid, give bond to the auditor of public accounts,
with two or more sureties, to be approved by him, in a sum of not
less than one thousand nor more than five thousand dollars, at the
discretion of such auditor, with condition to make the returns and
pay the tax required by law.

7. Securities to be deposited with the treasurer. — Every
such company, whether incorporated by the laws of this state
or not, shall, by an agent employed to superintend or manage
its business in this state, deliver under oath to the treasurer
of this state a statement of the amount of capital stock of
said company and deposit with him bonds of the state of
Virginia or of the United States, or bonds of the cities of Richmond,
Petersburg, Lynchburg, Norfolk, Alexandria or Danville, to an
amount equal to five per centum on said capital stock, and the trea-
surer shall thereupon give the agent a receipt for the same: provided
that the cash value of the securities so deposited need not be more
than fifty thousand dollars nor shall be less than ten thousand dol-
lars. If the bonds so deposited be registered bonds, the company
shall at the same time deliver to the treasurer a power of attorney,
authorizing him to transfer the said bonds, or any part thereof, for
the purpose of paying any of the liabilities provided for in this act.
Upon the exhibition of the said receipt to a commissioner of the
revenue of the county, city or district in which an office of the said
company in this state is or is intended to be located, and the pay-
ment of the specific license tax which may be imposed thereon, a
license shall be issued in the manner prescribed by law to the said
company to carry on its business. And if at the end of the period
for which a license is given the said company desire another license,
it shall only be given in the certificate of the treasurer that the
bonds required by this section to be deposited with him are in his
possession. The treasurer shall require any such company to make
good any depreciation or reduction in value of said securities, and
he shall, in the month of December of every year, examine all se-
curities so deposited with him for the purpose of ascertaining
whether any of them have depreciated or have been reduced in
value. °

8. Companies to draw interest on securities.—The treasurer at the
time of receiving said bonds shall give to the company authority to
draw the interest thereof as the same may become due and payable
for the use of the company; which authority shall continue in force
until the company fails to pay any of its liabilities in this state by
reason of its becoming security as aforesaid or by reason of its as-
suming any duty or obligation of like nature as principal or other-
wise, or becoming fiduciary, in which case party charged with the
payment of such interest shall be notified of such failure; and there-
after such interest shall be payable to the treasurer, to be applied,
if necessary, to the payment of such liabilities.

9. Sale of securities to pay liabilities.—If the said company fail
to pay any of its liabilities after the same shall have been ascer-
tained by any agreement by the parties, a judgment, order or decree
of any court having jurisdiction of the subject or otherwise, the
treasurer shall, upon the application of the party to whom the debt
or money is due, proceed to sell at auction such an amount of said
bonds as with the interest in his hands will pay the sum due and
expenses of sale, and of the proceeds of sale pay said sums and ex-
penses: provided the treasurer give the company or its agent in
this state ten days’ notice, by mail or personally, of the said appli-
cation having been made.

10. Lien on securites.—Upon the bonds deposited as aforesaid with
the treasurer any party or person who may be interested in the
faithful performance of any such undertakings or obligations of such
company, whether as principal or surety, shall have a lien for the
amounts due or to become due in consequence of any failure in the
performance, and shall be entitled to be paid ratably out of the pro-
ceeds of such bonds if such proceeds be not sufficient to pay all the
liabilities of such company. Whenever any such company deposit-
ing bonds as aforesaid shall have become insolvent or bankrupt or
shall have made an assignment for the. benefit of its creditors, it
shall be the duty of the attorney-general to file a bill in the circuit
court of Richmond in the name of any party or person interested in
securing the payment or the enforcement of such liabilities, and to
convene all parties or persons in interest and to enforce the said
lien. The treasurer shall be a party and the funds distributed by
the court. ’

11. When principal of securities paid; what treasurer to do.—
When the principal of any of the said bonds so deposited is paid to
the treasurer he shall] notify by mail the company or its agent in
this state, and may pay the money so received to the said company
upon receiving like bonds to an equal amount; upon failure of
thirty days after receiving said notice to deliver like bonds to an
equal amount to the treasurer he may invest the said money in such
bonds and hold the same as he held those that were paid off.

12. Treasurer may return securities.—If such company cease to
carry on business in this state, and its liability, whether fixed or
contingent, shall have been satisfied or shall have been terminated,
upon satisfactory evidence of the fact he shall deliver to such com-
pany the bonds in his possession belonging to it, or such of them as
may remain after paying the liabilities aforesaid; or if such com-
pany shall reduce the amount of its liabilities, both fixed and con-
tingent, below the value of the bonds in possession of the treasurer,
he may in his discretion deliver to such company a part of such
bonds.

13. Illegal disposal of bonds by treasurer a felony.—If the treasurer
shall dispose of the bonds deposited with him by any such company
under the provisions of this act, or any part of said bonds otherwise
than is provided in this act, he shall be deemed guilty of a felony,
and, upon conviction thereof, shall be confined in the penitentiary
for not less than five or more than fifteen years.

14. Who deemed agent.—Every person who shall so far represent
any surety company established in any other state as to receive or
transmit applications for suretyship, or to receive for delivery bonds
founded on application forwarded from this state, or otherwise to
procure suretyship to be effected by such company upon the bonds
of persons or corporations in this state, shall be deemed as acting as
agent for said company, and shall be subject to the restrictions and
liable to the penalties herein made applicable to agents of such com-

anies. :
° 15. Report to be made.—Every such agent, before transacting any
business as aforesaid, shall deposit with the auditor of public ac-
counts a copy of the charter of the company or corporation for which
he is agent as aforesaid, unless a copy thereof has already been de-
762 ACTS OF ASSEMBLY.

posited with the auditor; and every such agent shall also, before
transacting any busineas as aforesaid, deposit with the auditor of
public accounts a statement, signed and sworn to by the president
and secretary of the company for which he acts, stating the amount
of its capital and the manner of its investments, designating the
amount invested in mortgages, in public securities, in stock of
incorporated companies (stating what companies), and also the
amount invested in other securities—particularizing each item of
investment—the amount of existing bonds upon which such com-
pany is surety, stating what portion thereof is secured by the de-
posit with such company, collateral security, the amount of pre-
mium thereon, and the amount of labilities, specifying therein the
amount of outstanding claims, adjusted or unadjusted, due or not
due: provided, however, that not more than one such statement
need be filed on behalf of such company.

16. Every such agent shall annually, between the first day of
January and the thirty-first day of March, also deposit with the
auditor of public accounts a similar statement of the capital of the
company which he represents and the investments and risks as
aforesaid, showing the actual condition of such company on the last
day of the preceding year, signed and sworn to as above directed ;
and the auditor of public accounts shall annually, as soon as prac-
ticable after the filing thereof, publish such statement, at the ex-
pense of such company, once in some newspaper in the city of Rich-
mond. |

17. The auditor of public accounts shall annually examine the
statements and returns required to be made by the companies and
agents as aforesaid, and if in his opinion any return shall be ob-
scure, defective or unsatisfactory, he shall immediately require an-
swers under oath from the agent by whom such obscure, defective or
unsatisfactory return shall have been made to such interrogatories
as he may deem necessary or proper to be answered in order to ex-
plain such return, and exhibit a full and accurate view of the busi-
ness and resources of the company represented by such agent. Every
agent who shall refuse or neglect to answer such interrogatories for
the space of thirty days, and continue to act as agent as aforesaid,
shall be fined not less than fifty nor more than five hundred dollars.

18. The auditor of public accounts, either personally or by a com-
mittee appointed by him, consisting of one or more persons not
directors, officers or agents of any company mentioned herein doing
business In this state, may at any time examine into the affairs of
any company incorporated by or doing business in this state. The
officers or agents of such company shall exhibit its books to said
auditor or committee, and otherwise facilitate such examination,
and the auditor or committee may examine under oath the officers
and agents of arry such company in relation to its affairs; and said
officer shall, if he deems it for the best so to do, publish the result
of such investigation in one or more newspapers published in this
state. Whenever it shall appear to the auditor of public accounts
from the statement or from an examination of the affairs of any
surety company that such company is insolvent or is conducting its
business fraudulently, or refuse or neglect to comply with the laws
of the state relating to surety companies, it shall be the duty of said
auditor to revoke the certificate of authority issued to the agent or
agents of any such company, and shall cause a notice thereof to be
published in one or more newspapers published in this state, and the
agent or agents of such company, after such notice, shall transact
no new business in this state. All the expenses of an examination
made under the provisions of this section shall be paid to the auditor
by the public examiner.

19. The auditor of public accounts shall annually, in the month
of April in each year, furnish to the clerk of each court in this state
a list of the names of all corporations allowed to do business in this
state under the provisions of this act, together with a statement of
the assets and liabilities of each of said corporations; and said clerk
shall file the same in his office, and whenever said auditor revokes
the authority of any corporation he shall immediately notify the
clerk of each court in this state.

20. The auditor of public accounts shall report to the attorney-
general any violations of the provisions of this chapter which
shall come to his knowledge, and the attorney-general shall cause to
be instituted the proper legal proceedings against any person viola-
ting any such provison.

21. Penalty on company for failure to make report.—If any com-
pany mentioned in this act, whether chartered by the laws of this
state or not, doing business in this state, fail to make such report
after being lawfully required, it shall for every such failure be fined
not less than one hundred nor more than one thousand dollars.

22. False statements; how punished.—If the persons verifying any
report mentioned in sections fifteen and sixteen knowingly make
any false statement, they shall be guilty of a misdemeanor, and on
conviction thereof shall be fined not less than one hundred dollars
nor more than one thousand dollars.

23. Jurisdiction in criminal prosecution.—In any criminal prose-
cution under the two preceding sections the county or corporation
court of the county or corporation wherein the company became se-
curity, or wherein it qualified as fiduciary or assumed any duty or
obligation as principal or otherwise, shall have jurisdiction. -

24. Civil suits; service and return of process.—Any suit or other
civil proceeding may be instituted against any such company in the
place in which it has become surety, qualified as fiduciary or as-
sumed any duty or obligation as principal or otherwise, which may
be the subject of the suit or other civil proceeding, or such suit or
proceeding may be instituted in the place in which the principal
obligor, for whom it has become surety, may be sued: provided,
however, when the state is a party, plaintiff or defendant, it shall be
in the circuit court of the city of Richmond. Process shall be
served upon a non-resident company as provided in section two of
this act, and upon a resident company in the manner prescribed by
the general law for the service of notice to or process against a corpo-
ration. —
25. Remedy may be by motion.—Civil proceeding to enforce any
liability against such company may be by motion in the prope:
court on ten days’ notice; but nothing herein contained shall be con:
strued to take away any existing remedy by action at common law
or suit in equity.

26. All taxes and fees which shall be payable to the state of Vir.
ginia, or any of its officers, by any surety company transacting
business in this state under the provisions of this act, and auy lia.
bility to the said state which may be in any manner incurred by
any such company, shall be paid in lawful money of the United
States, and not in coupons. Nothing in this act contained shall he
construed to apply to any company until it shall begin to exercise
the powers in reference to which a deposit of securities or reports
are by this act required to be made, notwithstanding such company
under its charter have the right to exercise such powers.

27. This act shall be in force from its passage.