BOND, a written acknowledgment or bind ing of a debt under seal. The person who gives the bond is called the obligor, and he to whom it is given the obligee. A bond may be single,. as where the obligor obliges himself, his heirs, executors and administrators, to pay a certain sum of money to another at a day named, or it may be conditional (which is the kind more generally used) that if the obligor does some particular act, the obligation shall be void, or else shall remain in full force, as pay ment of rent, performance of covenants in a deed, or repayment of a principal sum of money borrowed of the obligee with interest, which principal sum is usually half of the penal sum specified in the bond. There must be proper parties, and no person can take the benefit of a bond, except the parties named therein, except, perhaps, in some cases of bonds given for the performance of their duties by certain classes of public officers. A man cannot be bound to himself even in connection with others. The bond must be in writing and sealed, but a seal ing sufficient where the bond is made is held sufficient though it might be an insufficient sealing if it had been made where it is sued on. It must be delivered by the party whose bond it is to the other. But the delivery and accept ance may be by attorney. The date is not considered of the substance of a bond, and therefore a bond which has either no date or an impossible date is still valid, provided the real day of its being dated or given can be proven. The condition is a vital part of a conditional bond, and usually limits and deter mines the amount to be paid in case of a breach, but interest and costs may be added (12 Johns. 351)). The recovery against a surety in a bond for the payment of money is not limited to the penalty, but may exceed so far as to include interest from the time of the breach. So far as interest is payable by the terms of the contract, and until default made, it is lim ited by the penalty, but after breach it is re coverable, not on the ground of contract, but as damages, which the law gives for its viola tion. On the forfeiture of the bond, or its becoming single, the whole penalty was for merly recoverable at law, but here the courts of equity interfered, and would not permit a man to take more than in conscience he ought, that is, his principal, interest and expenses in case the forfeiture accrued by non-payment of money borrowed, the damages sustained upon non-performance of covenants, etc. And the
similar practice having gained some footing in the courts of law, the statute of 4 and 5 Anne, c. 16, at length enacted, in the same spirit of equity, that in case of a bond conditioned for the payment of money, the payment or tender of the principal sum due with interest and costs, even though the bond were forfeited and a suit commenced thereon, should be a full satisfaction and discharge (2 Bl. Com. 340). If in a bond the obligor binds himself without adding his heirs, executors and administrators, the execu tors and administrators are bound, but not the heir (Sheppard's Touchstone, 369), for the law will not imply the obligation upon the heir (Coke, Litt. 209a). If a bond lie dormant for 20 years it cannot afterward be recovered; for the law raises a presumption of its having been paid, and the defendant may plead .rolvit ad diem to an action upon it (1 Burr. 434; 4 Burr. 1963). When chartered most corporations are empowered to issue bonds, which must bear a fixed interest and run for a definite period. Such bonds are either registered or coupon bonds, the former issued to individual owners listed on the corporation's books who when disposing of them, must authorize the transfer to the purchaser. Coupon bonds are payable to bearer and attached to them are a series of coupons, which are promises of the payment of interest at stated periods. These coupons as they fall due are cut from the bond and pre sented for payment. Corporation bond issues are often secured by a mortgage made to a trustee for the bondholders on the property of the issuing corporation, and which may be fore closed in the usual way upon default of pay ment.
Government bonds are not secured by any mortgage and their security rests upon the con fidence of the purchaser in the issuing govern ment. In many States the bonds of the State gov ernment and in all States the issues of school, county and city bonds are covered by constitu tional provisions which impose a limit to in debtedness through bond issues. See BONDS, INVESTMENT; and consult Cook, 'Treatise on Stock and Stockholders' (3d ed. Chicago Dillon, 'Law of Municipal Bonds' (Saint Louis 1876); Hainer, 'Modern Law of Municipal Securities' (Indianapolis 1898) ; Short, 'Law of Railway Bonds and Mortgages' (Boston 1897).