The decision helped establish the principle that corporations, such as Dartmouth College, were protected from alteration by states for public reasons. In 1769, Dartmouth College had received a charter from the King of England, establishing it as a college. Over the years, the state of New Hampshire had granted lands to the college, and the college had taken on the function of providing higher education in the state. On 27 June 1816, New Hampshire amended the charter of Dartmouth College, reconstituting it as Dartmouth University, with a new board of trustees, incorporating some of the older board, and establishing the power of the state to name future board members. William Woodward, the secretary-treasurer of the College, was reappointed as secretary-treasurer of the newly-chartered university. In five separate lawsuits that were later combined into one, trustees of the original college sued the state of New Hampshire, claiming that under the U.S. Constitution the state had no authority to pass laws impairing the obligations of contracts. The original charter, they claimed, was such a contract. Daniel Webster, arguing for the appellant, pointed out that to take property away from an institution is an act of forfeiture, and should be the action of the judiciary, not of the legislature. The charter which the King had issued was such that not even Parliament could have annulled it, and it was thus improper for the state of New Hampshire to believe that it could. The corporation established was a lay corporation, not a civil corporation, and therefore it did not belong to the public. Rather, it belonged to the trustees and to those they appointed to succeed them. John Holmes, arguing for the state of New Hampshire, pointed out that the charter was not to a private institution, but was a grant of a public nature. Chief Justice Marshall, who wrote the opinion of the court, noted that states did have the power to change contracts. No one doubted that states had the power, for example, to allow for divorce, which is the breaking of marriage contracts. However, in the case of corporate charters, Chief Justice Marshall suggested that if a charter was to a public corporation, the state would have the power to alter such a charter. But if a charter was to a private corporation, then the federal government had an obligation under the Constitution to protect the corporation from the state. A corporation, Chief Justice Marshall pointed out, is an artificial being--immortal, but it may act as an individual. However, it does not have a political character, in that it cannot vote or run for office. Ultimately, he held that the charter to the college was a contract in the letter and spirit of the Constitution and it could not be violated or impaired without violation of the Constitution. The ruling of the state court was reversed. One of the consequences of the case was that in the future, when states chartered colleges or other institutions of a semi-public nature, the states reserved in the chartering legislation the right to amend the charter in later years. In later years, the distinction between a civil institution employed in the administration of the government and a teaching institution beca-me increasingly blurred, and the sharp distinction once made by Chief Justice Marshall has come increasingly hard to apply.
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After having been removed as president by Dartmouth's Board of Trustees in 1815, John Wheelock persuaded the governor of New Hampshire to amend the College's charter to make the College a public institution governed by the state legislature. "Dartmouth University" was born. The College's board resisted; their subsequent court cases in the state courts resulted in losses before they argued in front of the Supreme Court in 1818. Dartmouth alumnus Daniel Webster, class of 1801, served as one of the lawyers for the College's trustees and he delivered a lengthy, impassioned oration to the court, which decided in the Board's favor in 1819 with a historic decision penned by Chief Justice John Marshall. Considered a landmark ruling in the development of U.S. constitutional and corporate law, Trustees of Dartmouth College v. Woodward (1819) held that the College would remain a private institution and not become a state university. The court’s decision confirmed that the U.S. Constitution’s contract clause prohibits states from impairing a contract—in this case, Dartmouth’s charter. Generations of Dartmouth students will have at least some familiarity with the 200-year-old case thanks to the oft-quoted words of Daniel Webster, Class of 1801, spoken during his argument on behalf of the College’s trustees: “It is, sir, as I have said, a small college, and yet there are those who love it!” The Dartmouth College case set up the concept of the private charitable organization in United States constitutional law. The case is still referenced today as the basis for the protection of corporate persons under the Constitution, and has been cited in recent opinions such as Burwell v. Hobby Lobby and Citizens United v. FEC.” Richard W. Morin ‘24, the College's librarian, outlined the case in detail in an article titled "The Will to Resist," which appeared in the April 1969 issue of Dartmouth Alumni Magazine. Photo courtesy of the Dartmouth Library
In order to continue enjoying our site, we ask that you confirm your identity as a human. Thank you very much for your cooperation.  Supreme Court of the United States Decided February 2, 1819Full case nameTrustees of Dartmouth College v. WoodwardCitations17 U.S. 518 (more)4 Wheat. 518; 4 L. Ed. 629 Case historyPriorError to the New Hampshire Superior CourtHoldingThe 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 JohnsonH. Brockholst Livingston · Thomas Todd Gabriel Duvall · Joseph Story Case opinionsMajorityMarshall, joined by Johnson, LivingstonConcurrenceWashington, joined by LivingstonConcurrenceStory, joined by LivingstonDissentDuvallTodd took no part in the consideration or decision of the case.Laws appliedU.S. Const. Art. 1, Sec. 10 Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819), was a landmark decision in United States corporate law from the United States Supreme Court dealing with the application of the Contracts 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 of New Hampshire. The Supreme Court upheld the sanctity of the original charter of the college, which pre-dated the creation of the State.[1] The decision settled the nature of public versus private charters and resulted in the rise of the American business corporation and the American free enterprise system.[2] BackgroundIn 1769 King George III of Great Britain 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 1816, over thirty years after the conclusion of the American Revolution, the legislature of New Hampshire altered Dartmouth's charter in order to reinstate the College's deposed president, place the ability to appoint positions in the hands of the governor, add new members to the board of trustees, and create 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.[citation needed] JudgmentThe 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 of the court was written by John Marshall. The opinion reaffirmed Marshall's belief in the sanctity of a contract (also seen in Fletcher v. Peck[3]) as necessary to the functioning of a republic (in the absence of royal rule, contracts rule).[according to whom?] 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 were no longer royal colonies, the contract was still valid because the Constitution said that a state could not 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."[4] SignificanceThe decision was not without precedent, earlier the Court had invalidated a state act in Fletcher v. Peck (1810),[3] concluding that contracts, no matter how they were procured (in that case, a land contract had been illegally obtained), cannot be invalidated by state legislation. Fletcher was not a popular decision at the time, and a public outcry ensued. Thomas Jefferson's earlier commiseration with New Hampshire Governor William 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. The courts, however, have imposed limitations to this. After the Dartmouth decision, many states wanted more control so they passed laws or constitutional amendments giving themselves the general right to alter or revoke at will, which the courts found to be a valid reservation.[5][6] The courts had established, however, that the alteration or revocation of private charters or laws authorizing private charters must be reasonable and cannot cause harm to the members (founders, stockholders, and the like).[7][8][9] The traditional view holds that this case is one of the most important Supreme Court rulings, strengthening the Contracts Clause and limiting the power of the States to interfere with private charters, including those of commercial enterprises.[citation needed] See also
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What was the effect of the ruling in Dartmouth College v Woodward?
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