Town Bonding Act Law and Legal Definition

Town bonding act means an act empowering a town, county, or a municipal corporation to issue the corporate bonds for the purpose of aiding construction in the town, county, or municipal corporation. The corporate bonds are often issued for aiding the construction of railroads. It is also referred as town-bonding law.

In Farnham v. Benedict, 107 N.Y. 159 (N.Y. 1887), the court observed that “Under the town bonding act of 1869 (Chap. 907, Laws of 1869) the existence of a railroad corporation having power to issue stock or bonds, and to construct the road to be aided, lies at the foundation of the power to issue the municipal bonds.”