Dartmouth College Case

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4 Wheat. (17 U.S.) 518 (1819), argued 10–12 Mar. 1818, decided 2 Feb. 1819 by vote of 5 to 1; Marshall for the Court, Washington and Story concurring separately, Duvall in dissent without opinion. In 1816, New Hampshire's newly elected Jeffersonian‐Republican governor, William Plumer, and the Republican‐dominated legislature determined to transform Dartmouth College by ousting what they regarded as a self‐perpetuating Federalist hierarchy among the college's trustees and replacing it with trustees appointed through the political process. They therefore enacted statutes that revised the royal charter of 1769 that created the college, changing the institution to a “University,” altering the procedures of internal control, and imposing external, public restraints on the governance of the school. The college's extant trustees determined to contest the constitutionality of this action.

When the case reached the United States Supreme Court for argument in 1818, the college's lawyers, led by Daniel Webster, directed their arguments to the meaning and impact of the Contract Clause of the Constitution (Article I, section 10), contending that the New Hampshire legislature, in amending the original charter of the college, had passed a law “impairing the Obligation of Contracts.” Webster argued that in effect the state legislature had “take[n] away from one … rights, property, and franchises, and give[n] them to another” (p. 558). He asserted that the Contract Clause should be interposed as a constitutional barrier to state activity of this kind.

Chief Justice John Marshall responded in his characteristically facile manner. Though the Court had previously decided Contract Clause cases, Marshall, for the first time, extended the protection of the Contract Clause to a corporate charter. Since the college insisted that it was entitled to constitutional protection from the legislative acts, Marshall had to analyze the relationship between the Contract Clause and the legal status of the college. He found that the college charter was a contract and that the college under the charter was a private and not a public corporation. This last point was important because the New Hampshire state courts had construed the college to be a public, and not a private entity, and therefore subject to the state's regulatory power. If the college were held to be private, the state could not interfere with its vested rights, particularly its property rights of acquisition, management, or control, because the Contract Clause, according to Marshall, was directed at acts affecting private property. The Contract Clause prevented the state from impairing the obligations of the original contract between the college and the state (as successor to the colonial government under the original royal grant). When a charter or an act of incorporation is found to be a contract between a state and a private party, it is protected from legislative interference. Only Justice Joseph Story's concurring opinion modified the sweep of Marshall's statements, suggesting that legislatures could retain certain prerogatives by including “reservation” clauses in corporate charters that allowed legislatures to alter or amend the charter.

By construing the Contract Clause as a means of protecting corporate charters from state interventions, Marshall derived a significant constitutional limitation on state authority. As a result, various forms of private economic and social activity would enjoy security from state regulatory policy. Marshall thus encouraged, through constitutional sanction, the emergence of the relatively unregulated private, autonomous economic actor as the major participant in a liberal political economy that served the commonwealth by promoting enlightened self‐interest.

See also Private Corporation Charters; Property Rights.

Bibliography

• G. Edward White, History of the Supreme Court of the United States, vols. 3–4, The Marshall Court and Cultural Change, 1815–35 (1988)

— Alfred S. Konefsky

• 4 Wheat. 518 (1819)
• Vote: 5–1
• For the Court: Marshall
• Concurring: Story and Washington
• Dissenting: Duvall

Dartmouth College was established in 1769 by a charter from King George III of England. After the formation of the United States, the agreement with the king became an agreement with the state of New Hampshire. In 1816 that state's legislature passed several amendments to the college's charter. By placing the school under the authority of the state government, these amendments had the effect of changing the private college into a state university.

Officials and friends of Dartmouth College objected. They believed the state legislature should not possess the authority to destroy the private nature of their college.

The Issue

Daniel Webster, arguing for the Dartmouth College trustees, maintained that the legislature had violated Article 1, Section 10, of the Constitution, which provides that “no State shall… pass any… Law impairing the Obligation of Contracts.” In an 1810 case (Fletcher v. Peck), the Supreme Court had ruled that a land grant is a contract. Webster now argued that “a grant of corporate powers and privileges is as much a contract as a grant of land.”

Is a charter a contract? Did the Constitution's contract clause protect private corporate charters, such as Dartmouth's?

Opinion of the Court

The Supreme Court ruled in favor of Dartmouth College. Chief Justice John Marshall's opinion held that the charter of a private corporation was a contract. Thus, the Constitution forbade the state legislature from changing that agreement. For the first time, the Court extended the protection of the Constitution's contract clause to a corporate charter. Marshall intended this ruling to be an important limitation on the powers and rights of state governments within the federal Union.

Dissent

Justice Gabriel Duvall dissented in this case. However, he did not file an opinion.

Significance

The decision increased the power of the federal government over the states. It reaffirmed that the U.S. Supreme Court could invalidate state laws when it found those laws unconstitutional. Further, the case reinforced the practice begun by Fletcher v. Peck of imposing restrictions upon state legislatures with regard to the regulation of corporations. The national government would not allow state legislatures to void or change existing charters because to do so would violate the contract clause of Article 1, Section 9, of the Constitution.

The Dartmouth College decision did not attract the attention of the press at the time. Yet it deserves recognition as one of the early Court's important decisions. Business corporations were just forming in a young nation, and the Court's decision gave these businesses security against unexpected legislative interference.

Such security was vital to those who might invest money in new industries and corporations. Investors could be sure that any rights granted a corporation by one state legislature could not be taken away by some future legislature. Such assurances encouraged investment in railroads and other new industries, which in turn stimulated the country's economic development. The Dartmouth College case did not, however, prevent states from regulating corporations. The decision merely held that a state government could not alter corporate charters it had already granted, unless the state reserved the right to do so when it initially granted the charter.

After the resolution of the Dartmouth College case, many state legislatures placed restrictions on companies they chartered. These new corporate charters often contained clauses allowing the state, under certain circumstances, to revoke the charters or to buy the companies. Nevertheless, the Dartmouth College decision encouraged investors by assuring them that the Supreme Court would regulate state grants and charters and that after the granting of a charter, the grantees could expect the courts to protect their rights.

See also Contract clause; Federalism; Fletcher v. Peck

Sources

• Richard N. Current, “The Dartmouth College Case”, in Quarrels That Have Shaped the Constitution, edited by John A. Garraty (New York: Harper & Row, 1987)

In 1819 the U.S. Supreme Court, in Trustees of Dartmouth College v. Woodward, 4 Wheaton 518, extended judicial interpretation by declaring private-corporation charters to be contracts and hence, by the contract clause of the Constitution of the United States, immune from impairment by state legislative action. Circumstances had aligned Republicans against Federalists and egalitarianism against religious establishment to complicate the education squabble. On 26 August 1815 the self-perpetuating board of trustees established under the charter of 1769 deposed the president of Dartmouth, John Wheelock. New Hampshire legislative enactments presently altered the charter and brought the institution under state control by enlarging the board; by creating a board of overseers appointed by the legislature, with veto on trustee action; and by changing its name to Dartmouth University. The college sued William H. Woodward, an adherent of the university faction and former secretary-treasurer of the college, for recovery of the charter, the seal, and other documents. After a state court decision favorable to the university faction, Daniel Webster argued the case before the Supreme Court. Chief Justice John Marshall's opinion held that the New Hampshire law was invalid because it impaired contractual obligations. This decision freed existing corporations from control by the states that created them and became a bulwark of laissez faire and a boon to corporate development. Control was later largely restored by (a) state legislation reserving the right to alter or repeal subsequent charters and (b) judicial decisions forbidding legislatures to grant, by charter, rights that menace the community or to surrender, by charter, its duty under the police power to protect the life, safety, and morals of the community.

Bibliography

Johnson, Herbert Alan. The Chief Justiceship of John Marshall, 1801–1835. Columbia: University of South Carolina Press, 1997.

Tobias, Marilyn. Old Dartmouth on Trial: The Transformation of the Academic Community in Nineteenth-Century America. New York: New York University Press, 1982.

—L. Ethan Ellis/A. R.

by John Marshall, 1819

Daniel Webster's famous speech before the Supreme Court in Dartmouth College v. Woodward is said to have brought tears to the eyes of Chief Justice John Marshall. Marshall's majority opinion in favor of the college was not based on sentiment but rather on his strong views concerning the contract clause in the Constitution. He had previously set forth the principle in Fletcher v. Peck that contracts could not be impaired by state rulings. In the Dartmouth case he extended this principle to corporate charters such as the one at hand. This new doctrine was to be a turning point in constitutional law. Since business corporations were now free from state interference, investors were more willing to support such enterprises. Thus, the whole field of business was encouraged to expand, with far-reaching effects on the American economy. Half a century later, Justice Samuel Miller remarked that "it may be doubted whether any decision ever delivered by any court has had such a pervading operation and influence in controlling legislation as this."

It can require no argument to prove that the circumstances of this case constitute a contract. An application is made to the Crown for a charter to incorporate a religious and literary institution. In the application it is stated that large contributions have been made for the object, which will be conferred on the corporation as soon as it shall be created. The charter is granted, and on its faith the property is conveyed. Surely in this transaction every ingredient of a complete and legitimate contract is to be found.

The points for consideration are:

• Is this contract protected by the Constitution of the United States?

• Is it impaired by the acts under which the defendant holds?

On the first point, it has been argued that the word "contract," in its broadest sense, would comprehend the political relations between the government and its citizens, would extend to offices held within a state for state purposes and to many of those laws concerning civil institutions, which must change with circumstances and be modified by ordinary legislation; which deeply concern the public, and which, to preserve good government, the public judgment must control - that even marriage is a contract, and its obligations are affected by the laws respecting divorces; that the clause in the Constitution, if construed in its greatest latitude, would prohibit these laws.

Taken in its broad, unlimited sense, the clause would be an unprofitable and vexatious interference with the internal concerns of a state, would unnecessarily and unwisely embarrass its legislation, and render immutable those civil institutions which are established for purposes of internal government, and which, to subserve those purposes, ought to vary with varying circumstances. That as the framers of the Constitution could never have intended to insert in that instrument a provision so unnecessary, so mischievous, and so repugnant to its general spirit, the term "contract" must be understood in a more limited sense. That it must be understood as intended to guard against a power of at least doubtful utility, the abuse of which had been extensively felt; and to restrain the legislature in future from violating the right to property. That anterior to the formation of the Constitution, a course of legislation had prevailed in many, if not in all, of the states which weakened the confidence of man in man and embarrassed all transactions between individuals by dispensing with a faithful performance of engagements.

To correct this mischief, by restraining the power which produced it, the state legislatures were forbidden "to pass any law impairing the obligation of contracts," that is, of contracts respecting property, under which some individual could claim a right to something beneficial to himself; and that since the clause in the Constitution must in construction receive some limitation, it may be confined, and ought to be confined, to cases of this description; to cases within the mischief it was intended to remedy. ...

The provision of the Constitution never has been understood to embrace other contracts than those which respect property, or some object of value, and confer rights which may be asserted in a court of justice. It never has been understood to restrict the general right of the legislature to legislate on the subject of divorces. Those acts enable some tribunal not to impair a marriage contract but to liberate one of the parties because it has been broken by the other. When any state legislature shall pass an act annulling all marriage contracts, or allowing either party to annul it without the consent of the other, it will be time enough to inquire whether such an act be constitutional.

The parties in this case differ less on general principles, less on the true construction of the Constitution in the abstract than on the application of those principles to this case and on the true construction of the charter of 1769. This is the point on which the cause essentially depends. If the act of incorporation be a grant of political power, if it create a civil institution to be employed in the administration of the government, or if the funds of the college be public property, or if the state of New Hampshire, as a government, be alone interested in its transactions, the subject is one in which the legislature of the state may act according to its own judgment, unrestrained by any limitation of its power imposed by the Constitution of the United States.

But if this be a private, eleemosynary institution, endowed with a capacity to take property for objects unconnected with government, whose funds are bestowed by individuals on the faith of the charter; if the donors have stipulated for the future disposition and management of those funds in the manner prescribed by themselves, there may be more difficulty in the case, although neither the persons who have made these stipulations nor those for whose benefit they were made should be parties to the cause. Those who are no longer interested in the property may yet retain such an interest in the preservation of their own arrangements as to have a right to insist that those arrangements shall be held sacred. Or, if they have themselves disappeared, it becomes a subject of serious and anxious inquiry whether those whom they have legally empowered to represent them forever may not assert all the rights which they possessed, while in being; whether, if they be without personal representatives who may feel injured by a violation of the compact, the trustees be not so completely their representatives, in the eye of the law, as to stand in their place, not only as respects the government of the college but also as respects the maintenance of the college charter. ...

A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created. Among the most important are immortality, and, if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered as the same, and may act as a single individual. They enable a corporation to manage its own affairs and to hold property without the perplexing intricacies, the hazardous and endless necessity of perpetual conveyances for the purpose of transmitting it from hand to hand. It is chiefly for the purpose of clothing bodies of men, in succession, with these qualities and capacities that corporations were invented and are in use.

By these means, a perpetual succession of individuals are capable of acting for the promotion of the particular object, like one immortal being. But this being does not share in the civil government of the country, unless that be the purpose for which it was created. Its immortality no more confers on it political power, or a political character, than immortality would confer such power or character on a natural person. It is no more a state instrument than a natural person exercising the same powers would be.

If, then, a natural person, employed by individuals in the education of youth, or for the government of a seminary in which youth is educated, would not become a public officer, or be considered as a member of the civil government, how is it that this artificial being, created by law for the purpose of being employed by the same individuals for the same purposes, should become a part of the civil government of the country? Is it because its existence, its capacities, its powers are given by law? Because the government has given it the power to take and to hold property in a particular form, and for particular purposes, has the government a consequent right substantially to change that form or to vary the purposes to which the property is to be applied? This principle has never been asserted or recognized and is supported by no authority. Can it derive aid from reason? ...

From the fact, then, that a charter of incorporation has been granted, nothing can be inferred which changes the character of the institution or transfers to the government any new power over it. The character of civil institutions does not grow out of their incorporation but out of the manner in which they are formed and the objects for which they are created. The right to change them is not founded on their being incorporated but on their being the instruments of government, created for its purposes. The same institutions, created for the same objects though not incorporated, would be public institutions and, of course, be controllable by the legislature. The incorporating act neither gives nor prevents this control. Neither, in reason, can the incorporating act change the character of a private, eleemosynary institution. ...

From this review of the charter, it appears that Dartmouth College is an eleemosynary institution, incorporated for the purpose of perpetuating the application of the bounty of the donors to the specified objects of that bounty; that its trustees or governors were originally named by the founder and invested with the power of perpetuating themselves; that they are not public officers, nor is it a civil institution, participating in the administration of government, but a charity school, or a seminary of education, incorporated for the preservation of its property, and the perpetual application of that property to the objects of its creation.

Yet a question remains to be considered, of more real difficulty, on which more doubt has been entertained than on all that have been discussed. The founders of the college, at least those whose contributions were in money, have parted with the property bestowed upon it, and their representatives have no interest in that property. The donors of land are equally without interest so long as the corporation shall exist. Could they be found, they are unaffected by any alteration in its constitution, and probably regardless of its form, or even of its existence. The students are fluctuating, and no individual among our youth has a vested interest in the institution, which can be asserted in a court of justice. Neither the founders of the college nor the youth for whose benefit it was founded, complain of the alteration made in its charter or think themselves injured by it. The trustees alone complain, and the trustees have no beneficial interest to be protected. Can this be such a contract, as the constitution intended to withdraw from the power of state legislation? Contracts, the parties to which have a vested beneficial interest, and those only, it has been said, are the objects about which the Constitution is solicitous, and to which its protection is extended. ...

According to the theory of the British constitution, their Parliament is omnipotent. To annul corporate rights might give a shock to public opinion, which that government has chosen to avoid; but its power is not questioned. Had Parliament, immediately after the emanation of this charter, and the execution of those conveyances which followed it, annulled the instrument, so that the living donors would have witnessed the disappointment of their hopes, the perfidy of the transaction would have been universally acknowledged. Yet then, as now, the donors would have had no interest in the property; then, as now, those who might be students would have had no rights to be violated; then, as now, it might be said that the trustees, in whom the rights of all were combined, possessed no private, individual, beneficial interest in the property confided to their protection. Yet the contract would at that time have been deemed sacred by all. What has since occurred to strip it of its inviolability? Circumstances have not changed it. In reason, in justice, and in law, it is now what it was in 1769.

This is plainly a contract to which the donors, the trustees, and the Crown (to whose rights and obligations New Hampshire succeeds) were the original parties. It is a contract made on a valuable consideration. It is a contract for the security and disposition of property. It is a contract on the faith of which real and personal estate has been conveyed to the corporation. It is then a contract within the letter of the Constitution, and within its spirit also, unless the fact that the property is invested by the donors in trustees for the promotion of religion and education, for the benefit of persons who are perpetually changing, though the objects remain the same, shall create a particular exception, taking this case out of the prohibition contained in the Constitution.

It is more than possible that the preservation of rights of this description was not particularly in the view of the framers of the Constitution when the clause under consideration was introduced into that instrument. It is probable that interferences of more frequent recurrence, to which the temptation was stronger and of which the mischief was more extensive, constituted the great motive for imposing this restriction on the state legislatures. But although a particular and a rare case may not, in itself, be of sufficient magnitude to induce a rule, yet it must be governed by the rule, when established, unless some plain and strong reason for excluding it can be given.

It is not enough to say that this particular case was not in the mind of the Convention when the article was framed, nor of the American people when it was adopted. It is necessary to go further and to say that, had this particular case been suggested, the language would have been so varied as to exclude it, or it would have been made a special exception. The case, being within the words of the rule, must be within its operation likewise, unless there be something in the literal construction so obviously absurd, or mischievous, or repugnant to the general spirit of the instrument as to justify those who expound the Constitution in making it an exception.

On what safe and intelligible ground can this exception stand? There is no expression in the Constitution, no sentiment delivered by its contemporaneous expounders which would justify us in making it. In the absence of all authority of this kind, is there, in the nature and reason of the case itself, that which would sustain a construction of the Constitution not warranted by its words? Are contracts of this description of a character to excite so little interest that we must exclude them from the provisions of the Constitution as being unworthy of the attention of those who framed the instrument? Or does public policy so imperiously demand their remaining exposed to legislative alteration as to compel us, or rather permit us, to say that these words, which were introduced to give stability to contracts, and which in their plain import comprehend this contract, must yet be so construed as to exclude it?

Almost all eleemosynary corporations, those which are created for the promotion of religion, of charity, or of education, are of the same character. The law of this case is the law of all. In every literary or charitable institution, unless the objects of the bounty be themselves incorporated, the whole legal interest is in trustees and can be asserted only by them. The donors, or claimants of the bounty, if they can appear in court at all, can appear only to complain of the trustees. In all other situations, they are identified with, and personated by, the trustees; and their rights are to be defended and maintained by them. Religion, charity, and education are, in the law of England, legatees or donees, capable of receiving bequests or donations in this form. They appear in court and claim or defend by the corporation. ...

The opinion of the Court, after mature deliberation, is that this is a contract, the obligation of which cannot be impaired without violating the Constitution of the United States. This opinion appears to us to be equally supported by reason and by the former decisions of this Court.

We next proceed to the inquiry whether its obligation has been impaired by those acts of the legislature of New Hampshire to which the special verdict refers. ...

By the Revolution, the duties as well as the powers of government devolved on the people of New Hampshire. It is admitted that among the latter was comprehended the transcendent power of Parliament, as well as that of the Executive Department. It is too clear to require the support of argument that all contracts and rights respecting property remained unchanged by the Revolution.

The obligations, then, which were created by the charter to Dartmouth College were the same in the new that they had been in the old government. The power of the government was also the same. A repeal of this charter at any time prior to the adoption of the present Constitution of the United States would have been an extraordinary and unprecedented act of power, but one which could have been contested only by the restrictions upon the legislature to be found in the constitution of the state. But the Constitution of the United States has imposed this additional limitation, that the legislature of a state shall pass no act "impairing the obligation of contracts."

It has been already stated that the act "to amend the charter, and enlarge and improve the corporation of Dartmouth College" increases the number of trustees to twenty-one, gives the appointment of the additional members to the executive of the state, and creates a board of overseers to consist of twenty-five persons, of whom twenty-one are also appointed by the executive of New Hampshire, who have power to inspect and control the most important acts of the trustees.

On the effect of this law, two opinions cannot be entertained. Between acting directly and acting through the agency of trustees and overseers, no essential difference is perceived. The whole power of governing the college is transferred from trustees, appointed according to the will of the founder, expressed in the charter, to the executive of New Hampshire. The management and application of the funds of this eleemosynary institution, which are placed by the donors in the hands of trustees named in the charter and empowered to perpetuate themselves, are placed by this act under the control of the government of the state. The will of the state is substituted for the will of the donors in every essential operation of the college.

This is not an immaterial change. The founders of the college contracted, not merely for the perpetual application of the funds which they gave to the objects for which those funds were given; they contracted, also, to secure that application by the constitution of the corporation. They contracted for a system, which should, as far as human foresight can provide, retain forever the government of the literary institution they had formed in the hands of persons approved by themselves.

This system is totally changed. The charter of 1769 exists no longer. It is reorganized; and reorganized in such a manner as to convert a literary institution, molded according to the will of its founders and placed under the control of private literary men, into a machine entirely subservient to the will of government. This may be for the advantage of this college in particular, and may be for the advantage of literature in general, but it is not according to the will of the donors, and is subversive of that contract, on the faith of which their property was given.

In the view which has been taken of this interesting case, the Court has confined itself to the rights possessed by the trustees, as the assignees and representatives of the donors and founders, for the benefit of religion and literature. Yet it is not clear that the trustees ought to be considered as destitute of such beneficial interest in themselves as the law may respect. In addition to their being the legal owners of the property, and to their having a freehold right in the powers confided to them, the charter itself countenances the idea that trustees may also be tutors with salaries. The first president was one of the original trustees; and the charter provides that in case of vacancy in that office "the senior professor or tutor, being one of the trustees, shall exercise the office of president until the trustees shall make choice of, and appoint a president."

According to the tenor of the charter, then, the trustees might, without impropriety, appoint a president and other professors from their own body. This is a power not entirely unconnected with an interest. Even if the proposition of the counsel for the defendant were sustained; if it were admitted that those contracts only are protected by the Constitution, a beneficial interest in which is vested in the party, who appears in court to assert that interest; yet it is by no means clear that the trustees of Dartmouth College have no beneficial interest in themselves. But the Court has deemed it unnecessary to investigate this particular point. ...

It results from this opinion that the acts of the legislature of New Hampshire, which are stated in the special verdict found in this cause, are repugnant to the Constitution of the United States; and that the judgment on this special verdict ought to have been for the plaintiffs. The judgment of the state court must therefore be reversed.

Trustees of Dartmouth College v. Woodward
Supreme Court of the United States
Decided February 2, 1819
Full case name	Trustees of Dartmouth College v. Woodward 1819
Citations	17 U.S. 518 (more) 4 L. Ed. 629
Prior history	ERROR to the Superior Court of the State of New Hampshire
Holding
The charter granted by the British crown to the trustees of Dartmouth College, in New-Hampshire, in the year 1769, is a contract within the meaning of that clause of the constitution of the United States, (art. 1. s. 10.) which declares that no State shall make any law impairing the obligation of contracts. The charter was not dissolved by the revolution.
Court membership
Chief Justice John Marshall Associate Justices Bushrod Washington · William Johnson Henry B. Livingston · Thomas Todd Gabriel Duvall · Joseph Story
Case opinions
Majority	Marshall
Concurrence	Washington
Concurrence	Story
Concurrence	Johnson (for reasons stated by Marshall)
Concurrence	Livingston (for reasons stated by Marshall, Washington, Story)
Dissent	Duvall
Todd took no part in the consideration or decision of the case.
Laws applied
U.S. Const. Art. 1, Sec. 10

Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819), was a landmark United States Supreme Court case dealing with the application of the Contract Clause of the United States Constitution to private corporations. The case arose when the president of Dartmouth College was deposed by its trustees, leading to the New Hampshire legislature attempting to force the College to become a public institution and thereby place the ability to appoint trustees in the hands of the governor. The Supreme Court upheld the sanctity of the original charter of the College, which pre-dated the creation of the State.

Contents 1 Facts 2 Judgment 3 See also 4 References 5 External links

Facts

In 1769 King George III of England granted a charter to Dartmouth College. This document spelled out the purpose of the school, set up the structure to govern it, and gave land to the college.

In 1815, over thirty years after the conclusion of the American Revolution, the legislature of New Hampshire attempted to alter Dartmouth's facts in order to reinstate the College's deposed president, placing the ability to appoint positions in the hands of the governor, adding new members to the board of trustees, and creating a state board of visitors with veto power over trustee decisions. This effectively converted the school from a private to a public institution. The College's book of records, corporate seal, and other corporate property were removed. The trustees of the College objected and sought to have the actions of the legislature declared unconstitutional.

The trustees retained Dartmouth alumnus Daniel Webster, a New Hampshire native who would later become a U.S. Senator for Massachusetts and Secretary of State under President Millard Fillmore. Webster argued the college's case against William H. Woodward, the state-approved secretary of the new board of trustees. Webster's speech in support of Dartmouth (which he described as "a small college," adding, "and yet there are those who love it") was so moving that it apparently helped convince Chief Justice John Marshall, also reportedly bringing tears to Webster's eyes.

Judgment

The decision, handed down on February 2, 1819, ruled in favor of the College and invalidated the act of the New Hampshire Legislature, which in turn allowed Dartmouth to continue as a private institution and take back its buildings, seal, and charter. The majority opinion was, predictably, written by Marshall. The opinion reaffirmed Marshall's belief in the sanctity of a contract (also seen in Fletcher v. Peck).

The Court ruled that the College's corporate charter qualified as a contract between private parties, the King and the trustees, with which the legislature could not interfere. Even though the United States are no longer royal colonies, the contract is still valid because the Constitution says that a state cannot pass laws to impair a contract. The fact that the government had commissioned the charter did not transform the school into a civil institution. Chief Justice Marshall's opinion emphasized that the term "contract" referred to transactions involving individual property rights, not to "the political relations between the government and its citizens.^[1]

The decision was not without precedent. Earlier the Court had invalidated a state act in Fletcher v. Peck, 10 U.S. 87 (1810), concluding that contracts, no matter how they were procured (in the case of Fletcher v. Peck, a land contract had been illegally obtained), cannot be invalidated by state legislation. Thus, the court, though working in an early era, was treading on Dartmouth was not a popular decision at the time, and a public outcry ensued. Thomas Jefferson's earlier commiseration with New Hampshire Governor Plumer stated essentially that the earth belongs to the living. Popular opinion influenced some state courts and legislatures to declare that state governments had an absolute right to amend or repeal a corporate charter.

Today some^[who?] still view Dartmouth as a problematic extension of individual contract rights to artificial corporate entities. The traditional view holds that the case is one of the most important Supreme Court rulings, strengthening the Contract Clause and limiting the power of the States to interfere with private charters, including those of commercial enterprises.

See also

• List of United States Supreme Court cases, volume 17
• Dartmouth College
• John Marshall
• Contract Clause

References

1. ^ The Oyez Project, "Dartmouth College v. Woodward", 17 U.S. 518 (1819)]

External links

• Dartmouth College v. Woodward, 17 U.S. 518 (1819) (opinion full text).

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