association, are hereby legalized and made valid, and all members and contracting parties shall be deemed and held to be fully bound by their contracts with such association.

3420d. Repealing clause. 18. All acts in conflict with the provisions of this act are repealed: Provided, however, That all rights acquired and all acts performed in pursuance of the provisions of any act so repealed are saved from the effects of such repeal, and all building, loan fund and savings associations or corporations which have commenced proceedings under said acts, or any of them, may proceed according to the provisions of this act.

3420e. Foreign company may do business. 1. Any surety company incorporated and organized under the laws of any State of the United States other than this State, or foreign country, for the purpose of transacting business as surety on obligations of persons or corporations may transact such business in this State, upon complying with the provisions of this act and not otherwise.

3420f. State Auditor to be its true attorney. 2. No surety company not incorporated under the authority of this State shall, directly or indirectly, take risks or transact business in this State until it shall have first appointed, in writing, the Auditor of State of this State to be the true. and lawful attorney of such company in and for this State, upon whom all lawful process in any action or proceeding against the company, which said action or proceeding may be instituted in the county in which the plaintiff resides or has its principal office, if a corporation, may be served with the same effect as if the company existed in this State. Said power of attorney shall stipulate and agree, on the part of the company, that any lawful process against the company which is served on said attorney shall be of the same legal force and validity as if served on the company; and that the authority shall continue in force so long as any liability remains outstanding against the company in this State. A certificate of such appointment, duly certified and authenticated, shall be filed in the office of the Auditor of State, and copies certified by him shall be received in evidence in all the Courts in this State. Service upon such attorney shall be deemed sufficient service upon the principal.

3420g. Legal process against. 3. Whenever lawful process against a surety company shall be served upon the Auditor of State, he shall forthwith forward a copy of the process served on him by mail, postpaid, and directed to the secretary of the company. For each copy of process the Auditor of State shall collect the sum of two dollars, which shall be paid by the plaintiff at the time of such service, the same to be recovered by him as part of the taxable costs, if he prevails in the suit.

3420h. Requirements as to doing business. 4. No person shall act within this State as agent or otherwise in procuring or securing appli cations for suretyship upon the bond of any person or corporation, or aid in transacting the business of such suretyship for any company incorporated or organized under the laws of any other State, unless such company is possessed of two hundred and fifty thousand dollars capital, and unless such capital to the extent of one hundred thousand dollars is invested in stocks created by the laws of the United States or by or under the laws of the State or country in which such company is located, or in other safe stocks or securities, the value of which at the time of such deposit shall be at or above par, which investments are deposited with the Insurance Commissioner, Auditor, Comptroller, or chief financial officer of the State or country under whose laws such company is incorporated, and the Auditor of this State is furnished with the certificate of such Insurance Commissioner, Auditor, Comptroller, or chief financial officer aforesaid, under his hand and official seal, that he, as such Insurance Commissioner, Auditor, Comptroller, or chief financial officer of such State or country, holds in trust and on deposit for the benefit of all obligees of such company, the security before mentioned, which certificates shall embrace the items of security so held, and shall state that he is satisfied that such securities are worth one hundred thousand dollars.

3420i. Agency. 5. 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 applications 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, or upon bonds given to 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 companies. 3420j. Deposit of copy of charter. 6. Every such agent, before transacting any business as aforesaid, shall deposit with the Auditor of State a copy of the charter or act of incorporation of the company or corporation for which he is agent as aforesaid, unless a copy thereof has already been deposited with such Auditor.

3420k. Certificate of authority to act. 7. Every such agent shall

also, before transacting any business as aforesaid, procure a certificate of authority from the Auditor of State, and before obtaining such certificate such agent shall furnish the Auditor of State 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 the 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 company is surety, stating what portion thereof is secured by the deposit with such company of collateral security, the amount of premium thereof, and the amount of liabilities, 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, and upon the filing of the aforesaid statement with the Auditor of State and furnishing him with satisfactory evidence of such investment as aforesaid, it shall be the duty of said Auditor to issue a certificate thereof with authority to transact the business of such company to the agent or agents applying for the same; said statement, evidence and certificate shall be renewed annually.

34201. Annual statement. 8. Every such company, or its agent, shall, in the month of January, annually, also deposit with the Auditor of State a similar statement of the capital of the company which he represents, and the investments and risks, as aforesaid, to be made up the 31st day of December, next preceding, signed and sworn to as above directed; and said Auditor shall, annually, in the month of February, publish an abstract of the statement filed in his office, as required by section 9 of this act and by this section, and the expense of publishing said abstract shall be paid by such companies: Provided, however, That not more than one such statement need be filed by such company in any one year.

3420m. Capital required. 9. No person shall act as agent, as aforesaid, for any such surety company in this State, unless the capital stock of the company which he represents amounts to the sum of two hundred and fifty thousand dollars, actually paid in in money, and invested exclusively of any obligations of the stockholders of any description.

3420n. Acting without authority - Penalty. 10. It shall be unlawful for any person to act as agent of any such surety company until such company and such agent shall have complied with all the requirements of the law of this State relating to such companies and their agents; and every person acting without such compliance shall, upon conviction thereof, be fined in any sum not exceeding one thousand dollars.

3420 0. Annual examination. II. The Auditor of State 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 obscure, defective, or unsatisfactory, he shall immediately require answers, 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 explain such return, and exhibit a full and accurate view of the business and resources of the company represented by such agent.

3420p. Agent's liability.

12. 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 liable to the penalty prescribed in section ten of this act.

3420q. Insolvency - Procedure. 13. The Auditor of State, either personally or by a committee appointed by him, consisting of one or more persons not directors, officers or agents of any surety company doing business in this State, may at any time examine into the affairs of any surety 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 any such company in relation to its affairs; and said Auditor shall, if he deems it for the best so to do, publish the result of such investigation in one or more newspapers published in the State. Whenever it shall appear to the Auditor from the statement, or from an examination of the affairs of any surety company not incorporated under the authority of this State, that such company is insolvent, or is conducting its business fraudulently, or refuses or neglects 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 the State, and the agent or agents of such company, after such notice, shall transact no further business in this State. All the expenses of an examination and publications made under the provisions of this section shall be paid to the Auditor by the company examined.

3420г. Attorney General to sue. 14. The Auditor of State shall report to the Attorney General any violation of the provisions of this act which shall come to his knowledge, and the Attorney General shall institute the proper legal proceedings, in the name of the State, against any person violating any such provision.

3420s. Fees. 15. Every surety company not incorporated in this State, applying for admission to transact business therein, shall pay to the Auditor of State, for the use of the State, for filing copy of its charter or act of incorporation, the sum of five dollars; for filing statements preliminary to admis

sion, and for filing each annual statement after admission, the sum of five dollars, and for each agent's certificate, annually, the sum of two dollars.

1. For further legislation on the subject of surety companies, see chapter on that subject at end of book. [SS 7496 to 7504.]

2. Sections 3420t and 3420u, Horner's R. S. of 1896, being 1885 S., p. 238, which authorized the acceptance of surety companies as sureties upon bonds required by the laws of this State, and prescribing the rights and liabilities of such companies as sureties upon such bonds, were repealed by 1897 S., p. 196.

3. A surety is not bound beyond the terms of his contract, reasonably interpreted. A material alteration, although favorable to the surety, will release him from liability upon the contract.-Weir Co. v. Wamsley, 110 Ind. 242.

4. Sureties are regarded as favorites of the law, and are not bound beyond the strict terms of their engagements, and their liabilities are not to be extended by implication beyond the terms of their contracts.-City v. Fames, 92 Ind. 240; Dunlap v. Eden, 15 App. 525; Irwin v. Kilburn, 104 Ind. 113.

5. Sureties, while not bound beyond the terms of their contract, the contract itself must be given a reasonable interpretation, in accordance with the settled canons of construction. The rule which requires that sureties shall not be bound beyond the terms of the engagement, does not require nor authorize a forced and unreasonable construction of the contract with a view of relieving the sureties.— Irwin v. Kilburn, 104 Ind. 113.

6. When the surety pays the debt of the principal, he may sue and recover back from the principal the amount which he has paid in discharge of the debt. His right is one of indemnity, and if he satisfies the payee by the payment of a less sum than that he is legally liable for, he can recover from his principal no greater sum than he has paid. Goodwin v. Davis, 15 App. 120.

[1893 S., p. 274. In force May 18, 1893.]

3420v. Foreign associations Statements.

1. It shall be

unlawful for any corporation, association or society, organized under the laws of any State (other than the State of Indiana), or of any government foreign to the government of the United States, to conduct or engage in the business of a building, loan fund, savings or investment association, and of issuing stock or bonds to members, payable in weekly, monthly or yearly installments or assessments, agreeing to pay thereon dividends or profits, or interest, or to pay off bonds by number consecutively or otherwise, without having first filed in the office of the auditor of State a statement, under the oath of the president, secretary, and at least three of the directors, showing the name and location of