The TRUSTEES OF DARTMOUTH COLLEGE v. WOODWARD.
SUPREME COURT OF THE UNITED STATES
17 U.S. 518; 1819 U.S. LEXIS 330; 4 L. Ed. 629; 4 Wheat. 518
FEBRUARY, 1819 Term
[arguments by counsel omitted]
OPINION: [*624] [***656] The opinion
of the Court was delivered by Mr. Chief Justice MARSHALL.
This is an action of trover, brought by the Trustees of Dartmouth College
against William H. Woodward, in the State Court of New Hampshire, for the book
of records, corporate seal, and other corporate property, to whcih the
plaintiffs allege themselves to be entitled.
A special verdict, after setting out the rights of the parties, finds for the
defendant, if certain acts of the legislature [**140] of
New-Hampshire, passed on the 27th of June, and on the 18th of December, 1816,
be valid, and binding on the trustees without their assent, and not repugnant
to the constitution of the United States; otherwise, it finds for the
plaintiffs.
[*625] The Superior Court of Judicature of New-Hampshire rendered a
judgment upon this verdict for the defendant, which judgment has been brought
before this Court by writ of error. The single question now to be considered
is, do the acts to which the verdict refers violate the constitution of the
United States?
This Court can be insensible neither to the magnitude nor delicacy of this
question. The validity of a legislative act is to be examined; and the opinion
of the highest law tribunal of a State is to be revised: an opinion which
carries with it intrinsic evidence of the diligence, of the ability, and the
integrity, with which it was formed. On more than one occasion, this Court has
expressed the cautious circumspection with which it approaches the
consideration of such questions; and has declared, that, in no doubtful case, would
it pronounce a legislative act to be contrary to the constitution. But the
American people have said, [**141] in the constitution of the
United States, that "no State shall pass any bill of attainder, ex post
facto law, or law impairing the obligation of contracts." In the same
instrument they have also said, "that the judicial power shall extend to
all cases in law and equity arising under the constitution." On the judges
of this Court, then, is imposed the high and solemn duty of protecting, from even
legislative violation, those contracts which the constitution of our country
has placed beyond legislative control; and, however irksome the task may be,
this is a duty from which we dare not shrink.
[*626] The title of the plaintiffs originates in a charter dated
the 13th day December, in the year 1769, incorporating twelve persons therein
mentioned, by the name of "The Trustees of Dartmouth College,"
granting to them and their successors the usual corporate privileges and
powers, and authorizing the trustees, who are to govern the college, to fill up
all vacancies which may be created in their own body.
The defendant claims under three acts of the legislature of New-Hampshire, the
most material of which was passed on the 27th of June, 1816, and is entitled,
"an act to amend the charter, [**142] and enlarge and improve
the corporation of Dartmouth College." Among other alterations in the
charter, this act 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, with power to inspect and control the most
important acts of the trustees. This board consists of twenty-five persons. The
president of the senate, the speaker of the house of representatives, of
New-Hampshire, and the governor and lieutenant governor of Vermont, for the
time being, are to be members ex officio. The board is to be completed by the
governor and council of New-Hampshire, who are also empowered to fill all
vacancies which may occur. The acts of the 18th and 26th of December are
supplemental to that of the 27th of June, and are principally intended to carry
that act into effect.
The majority of the trustees of the college have refused to accept this amended
charter, and have [*627] brought this suit for the corporate
property, which is in possession of a person holding by virtue of the acts
which have been stated.
It can require no argument to prove, that the circumstances of this case
constitute [**143] 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.
[***657] Surely in this transaction every ingredient of a complete
and legitimate contract is to be found.
The points for consideration are,
1. Is this contract protected by the constitution of the United States?
2. Is it impaired by the acts under which the defendant holds?
1. 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 effected by the laws respecting [**144] divorces. That the
clause in the constitution, if construed in its greatest latitude,
[*628] 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 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.
[**145] 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 himsel; 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 [*629] description; to cases within the
mischief it was intended to remedy.
The general correctness of these observations cannot be controverted. That the
framers of the constitution did not intend to retrain the States in the
regulation of their civil institutions, adopted for internal government, and
that the instrument they have given us, is not to be so construed, may be
admitted. 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,
[**146] 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 [*630] 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
[**147] 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.
[**148]
It becomes then the duty of the Court most [*631] seriously to
examine this charter, and to ascertain its true character.
From the instrument itself, it appears, that about the year 1754, the Rev.
Eleazer Wheelock established at his own expense, and on his own estate, a
charity school for the instruction of Indians in the christian religion. The success
of this institution inspired him with the design of soliciting contributions in
England for carrying on, and extending, his undertaking.In this pious work he
employed the Rev. Nathaniel Whitaker, who, by virtue of a power of attorney
from Dr. Wheelock, appointed the Earl of Dartmouth and others, trustees of the
money, which had been, and should be, contributed; which appointment Dr.
Wheelock confirmed by a deed of trust authorizing the trustees to
[***658] fix on a site for the college.They determined to establish
the school on Connecticut river, in the western part of New-Hampshire; that
situation being supposed favourable for carrying on the original design among
the Indians, and the also for promoting learning among the English; and the
proprietors in the neighbourhood having made large offers of land, on
condition, that [**149] the college should there be placed. Dr.
Wheelock then applied to the crown for an act of incorporation; and represented
the expediency of appointing those whom he had, by his last will, named as
trustees in America, to be members of the proposed corporation. "In
consideration of the premises," "for the education and instruction of
the youth of the Indian tribes," &c. "and also of English youth,
and any other," the charter was granted, and the trustees of Dartmouth
College were by that name created a body [*632] corporate, with
power, for the use of the said college, to acquire real and personal property,
and to pay the president, tutors, and other officers of the college, such
salaries as they shall allow.
The charter proceeds to appoint Eleazer Wheelock, "the founder of said
college," president thereof, with power by his last will to appoint a
successor, who is to continue in office until disapproved by the trustees. In
case of vacancy, the trustees may appoint a president, and in case of the
ceasing of a president, the senior professor or tutor, being one of the
trustees, shall exercise the office, until an appointment shall be made. The
trustees have power to appoint and [**150] displace professors,
tutors, and other officers, and to supply any vacancies which may be created in
their own body, by death, resignation, removal, or disability; and also to make
orders, ordinances, and laws, for the government of the college, the same not
being repugnant to the laws of Great Britain, or of New-Hampshire, and not
excluding any person on account of his speculative sentiments in religion, or
his being of a religious profession different from that of the trustees.
This charter was accepted, and the property both real and personal, which had
been contributed for the benefit of the college, was conveyed to, and vested
in, the corporate body.
From this brief review of the most essential parts of the charter, it is
apparent, that the funds of the college consisted entirely of private
donations. It is, perhaps, not very important, who were the donors. The
probability is, that the Earl of Dartmouth, and the other trustees in England,
were, in fact, the largest [*633] contributors. Yet the legal
conclusion, from the facts recited in the charter, would probably be, that Dr.
Wheelock was the founder of the college.
The origin of the institution was, undoubtedly, the [**151] Indian
charity school, established by Dr. Wheelock, at his own expense. It was at his
instance, and to enlarge this school, that contributions were solicited in
England. The person soliciting these contributions was his agent; and the
trustees, who received the money, were appointed by, and act under, his authority.
It is not too much to say, that the funds were obtained by him, in trust, to be
applied by him to the purposes of his enlarged school. The charter of
incorporation was granted at his instance. The persons named by him in his last
will, as the trustees of his charity school, compose a part of the corporation,
and he is declared to be the founder of the college, and its president for
life. Were the inquiry material, we should feel some hesitation in saying, that
Dr. Wheelock was not, in law, to be considered as the founder, n75 of this
institution, and as possessing all the rights appertaining to that character.
But be this as it may, Dartmouth College is really endowed by private
individuals, who have bestowed their funds for the propagation of the christian
religion among the Indians, and for the promotion of piety and learning
generally. From these funds the salaries [**152] of the tutors are
drawn; and these salaries lessen the expense of education to the students. It
[*634] is then an eleemosynary, n76 and, as far as respects its
funds, a private corporation.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -
n75 1 Bl. Com. 481.
n76 1 Bl. Com. 471.
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Do its objects stamp on it a different character? Are the trustees and
professors public officers, invested with any portion of political power,
partaking in any degree in the administration of civil government, and
performing duties which flow from the sovereign authority?
That education is an object of national concern, and a proper subject of
legislation, all admit. That there may be an institution founded by government,
and placed entirely under its immediate control, the officers of which would be
public officers, amenable exclusively to government, none will deny. But is
Dartmouth College such an institution? Is education altogether in the hands of
government? Does every teacher of youth become a public officer, and do donations
for the purpose of education necessarily become public property, so far that
the will of the legislature, not the will of the donor, becomes the law of the
donation? These questions are of serious moment to [**153] society,
and deserve to be well considered.
Doctor Wheelock, as the keeper of his charity school, instructing the Indians
in the art of reading, and in our holy religion; sustaining them at his own
expense, and on the voluntary contributions of the charitable, could scarcely
be considered as a public officer, exercising any portion of those duties which
belong to government; nor could the legislature have [*635]
supposed, that his private funds, or those given by others, were subject to
legislative management, because they were applied to the purposes of education.
When, afterwards, his school was enlarged, and the liberal contributions made
in England, and in America, enabled him to extend his cares to the education of
the youth of his own country, no change was wrought in his own character, or in
the nature of his duties. Had he employed assistant tutors with the funds
contributed by others, or had the trustees in England established a school with
Dr. Wheelock at its head, and paid salaries to him and his assistants, they
would still have been private tutors; and the fact, that they were employed in
the education of youth, could not have converted them into public officers,
[**154] concerned in the administration of public duties, or have
given the legislature a right to interfere in the management
[***659] of the fund. The trustees, in whose care that fund was
placed by the contributors, would have been permitted to execute their trust
uncontrolled by legislative authority.
Whence, then, can be derived the idea, that Dartmouth College has become a
public institution, and its trustees public officers, exercising powers
conferred by the public for public objects? Not from the source whence its
funds were drawn; for its foundation is purely private and eleemosynary -- Not
from the application of those funds; for money may be given for education, and
the persons receiving it do not, by being employed in the education of youth,
become members of the civil government. Is it from [*636] the act
of incorporation? Let this subject be considered.
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 [**155] 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, [**156]
a natural person, employed [*637] 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 from, 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?
The objects for which a corporation is created are universally such as the
government wishes to promote. They are deemed beneficial to the country; and
this benefit constitutes the consideration, and, in most cases, the sole
consideration of the grant. In most eleemosynary institutions, the object would
be [**157] difficult, perhaps unattainable, without the aid of a
charter of incorporation. Charitable, or public spirited individuals, desirous
of making permanent appropriations for charitable or other useful purposes,
find it impossible to effect their design securely, and certainly, without an
incorporating act. They apply to the government, state their beneficent object,
and offer to advance the money necessary for its accomplishment,
[*638] provided the government will confer on the instrument which
is to execute their designs the capacity to execute them. The proposition is
considered and approved. The benefit to the public is considered as an ample
compensation for the faculty it confers, and the corporation is created. If the
advantages to the public constitute a full compensation for the faculty it
gives, there can be no reason for exacting a further compensation, by claiming
a right to exercise over this artificial being a power which changes its
nature, and touches the fund, for the security and application of which it was
created. There can be no reason for implying in a charter, given for a valuable
consideration, a power which is not only not expressed, but is in direct
[**158] contradiction to its express stipulations.
From the fact, them, 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
now prevents this control. Neither, in reason, can the incorporating act
[*639] change the character of a private eleemosynary institution.
We are next led to the inquiry, for whose benefit the property given to
Dartmouth College was secured? The counsel for the defendant have insisted,
that the beneficial interest is in the people of New-Hampshire. The charter,
after reciting the preliminary measures which had been taken, and the
[**159] application for an act of incorporation, proceeds thus:
"Know ye, therefore, that we, considering the premises, and being willing
to encourage the laudable and charitable design of spreading christian
knowledge among the savages of our American wilderness, and, also, that the
best means of education be established, in our province of New-Hampshire, for
the benefit of said province, do, of our special grace," &c. Do these
expressions bestow on New-Hampshire any exclusive right to the property of the
college, any exclusive interest in the labours of the professors? Or do they
merely indicate a willingness that New-Hampshire should enjoy those advantages
which result to all from the establishment of a seminary of learning in the
[***660] neighbourhood? On this point we think it impossible to
entertain a serious doubt. The words themselves, unexplained by the context,
indicate, that the "benefit intended for the province" is that which
is derived from "establishing the best means of education therein;"
that is, from establishing in the province Dartmouth College, as constituted by
the charter. But, if these words, considered alone, could admit of doubt, that
[*640] doubt is [**160] completely removed by an inspection
of the entire instrument.
The particular interests of New-Hampshire never entered into the mind of the
donors, never constituted a motive for their donation. The propagation of the
christian religion among the savages, and the dissemination of useful knowledge
among the youth of the country, were the avowed and the sole objects of their
contributions. In these, New-Hampshire would participate; but nothing
particular or exclusive was intended for her. Even the site of the college was
selected, not for the sake of New-Hampshire, but because it was "most
subservient to the great ends in view," and because liberal donations of
land were offered by the proprietors, on condition that the institution should
be there established. The real advantages from the location of the college, are,
perhaps, not less considerable to those on the west, than to those on the east
side of Connecticut river. The clause which constitutes the incorporation, and
expresses the objects for which it was made, declares those objects to be the
instruction of the Indians, "and also of English youth, and any
others." So that the objects of the contributors, and the incorporating
[**161] act, were the same; the promotion of christianity, and of
education generally, not the interests of New-Hampshire particularly.
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 [*641] 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 [**162] 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 [*642]
which the constitution is solicitous, and to which its protection is extended.
The Court has bestowed on this argument the most diliberate consideration, and
the result will be stated. Dr. Wheelock, acting for himself, and for those who,
at his solicitation, had made contributions to his school, applied for this
charter, as the instrument which should enable him, and them, to perpetuate
[**163] their beneficent intention. It was granted. An artificial,
immortal being, was created by the crown, capable of receiving and distributing
forever, according to the will of the donors, the donations which should be
made to it. On this being, the contributions which had been collected were
immediately bestowed. These gifts were made, not indeed to make a profit for
the donors, or their posterity, but for something in their opinion of
inestimable value; for something which they deemed a full equivalent for the
money with which it was purchased. The consideration for which they stipulated,
is the perpetual application of the found to its object, in the mode prescribed
by themselves. Their descendants may take no interest in the preservation of
this consideration. But in this respect their descendants are not their
representatives. They are represented by the corporation. The corporation is
the assignee of their rights, stands in their place, and distributes their
bounty, as they would themselves have distributed it, had they been immortal.
So with respect to the students who are to derive learning from this source.
The corporation is a trustee for them also. Their potential [**164]
rights, which, taken distributively, [*643] are imperceptible,
amount collectively to a most important interest. These are, in the aggregate,
to be exercised, asserted, and protected, by the corporation. They were as
completely out of the donors, at the instant of their being vested in the
corporation, and as incapable of being asserted by the students, as at present.
According to the theory to the British constitution, their parliament is
omnipotent. To annual 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 donows 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 [**165]
interest in the property confided to their protection. Yet the contract
[***661] 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
[*644] 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 [**166] 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 farther, 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
[*645] 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 [**167] 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 [**168] 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 [*646] 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. Are they of so little estimation in the United
States, that contracts for their benefit must be excluded from the protection
of words, which in their natural import include them? Or do such contracts so
necessarily require new modelling by the authority of the legislature, that the
ordinary rules of construction must be disregarded in order to leave them
exposed to legislative alteration?
All feel, that these objects are not deemed unimportant in the United States.
The interest which this case has excited, proves that they are not. The framers
[**169] of the constitution did not deem them unworthy of its care
and protection. They have, though in a different mode, manifested their respect
for science, by reserving to the government of the Union the power "to promote
the progress of science and useful arts, by securing for limited times, to
authors and inventors, the exclusive right to their respective writings and
discoveries." They have so far withdrawn science, and the useful arts,
from the action of the State governments. Why then should they be supposed so
regardless of contracts made for the advancement of literature, as to intend to
exclude them from provisions, made for the security [*647] of
ordinary contracts between man and man? No reason for making this supposition
is perceived.
If the insignificance of the object does not require that we should exclude
contracts respecting it from the protection of the constitution; neither, as we
conceive, is the policy of leaving them subject to legislative alteration so
apparent, as to require a forced construction of that instrument in order to
effect it. These eleemosynary institutions do not fill the place, which would
otherwise be occupied by government, but that which [**170] would
otherwise remain vacant.They are complete acquisitions to literature. They are
donations to education; donations, which any government must be disposed rather
to encourage than to discountenance. It requires no very critical examination
of the human mind to enable us to determine, that one great inducement to these
gifts is the conviction felt by the giver, that the disposition he makes of
them is immutable. It is probable, that no man ever was, and that no man ever
will be, the founder of a college, believing at the time, that an act of
incorporation constitutes no security for the institution; believing, that it
is immediately to be deemed a public institution, whose funds are to be
governed and applied, not by the will of the donor, but by the will of the
legislature. All such [***662] gifts are made in the pleasing,
perhaps delusive hope, that the charity will flow forever in the channel which
the givers have marked out for it. If every man finds in his own bosom strong
evidence of the universality of this sentiment, there can be but little reason
to imagine, that the framers of our constitution were [*648]
strangers to it, and that, feeling the necessity and [**171] policy
of giving permanence and security to contracts, of withdrawing them from the influence
of legislative bodies, whose fluctuating policy, and repeated interferences,
produced the most perplexing and injurious embarrassments, they still deemed it
necessary to leave these contracts subject to those interferences. The motives
for such an exception must be very powerful, to justify the construction which
makes it.
The motives suggested at the bar grow out of the original appointment of the
trustees, which is supposed to have been in a spirit hostile to the genius of
our government, and the presumption, that, if allowed to continue themselves,
they now are, and must remain forever, what they originally were. Hence is
inferred the necessity of applying to this corporation, and to other similar
corporations, the correcting and improving hand of the legislature.
It has been urged repeatedly, and certainly with a degree of earnestness which
attracted attention, that the trustees deriving their power from a regal
source, must, necessarily, partake of the spirit of their origin; and that
their first principles, unimproved by that resplendent light which has been
shed around them, must [**172] continue to govern the college, and
to guide the students. Before we inquire into the influence which this argument
ought to have on the constitutional question, it may not be amiss to examine
the fact on which it rests. The first trustees were undoubtedly named in the
charter by the crown; but at whose suggestion were they named? By whom were
they [*649] selected? The charter informs us. Dr. Wheelock had
represented, "that, for many weighty reasons, it would be expedient, that
the gentlemen whom he had already nominated, in his last will, to be trustees
in America, should be of the corporation now proposed." When, afterwards,
the trustees are named in the charter, can it be doubted that the persons
mentioned by Dr. Wheelock in his will were appointed? Some were probably added
by the crown, with the approbation of Dr. Wheelock. Among these is the Doctor
himself. If any others were appointed at the instance of the crown, they are
the governor, three members of the council, and the speaker of the house of
representatives, of the colony of New-Hampshire. The stations filled by these
persons ought to rescue them from any other imputation than too great a
dependence on the [**173] crown. If in the revolution that
followed, they acted under the influence of this sentiment, they must have
ceased to be trustees; if they took part with their countrymen, the imputation,
which suspicion might excite, would no longer attach to them.The original
trustees, then, or most of them, were named by Dr. Wheelock, and those who were
added to his nomination, most probably with his approbation, were among the
most eminent and respectable individuals in New-Hampshire.
The only evidence which we possess of the character of Dr. Wheelock is
furnished by this charter. The judicious means employed for the accomplishment
of his object, and the success which attended his endeavours, would lead to the
opinion, that he united a sound understanding to that humanity and
[*650] benevolence which suggested his undertaking. It surely
cannot be assumed, that his trustees were selected without judgment. With as
little probability can it be assumed, that, while the light of science, and of
liberal principles, pervades the whole community, these originally benighted
trustees remain in utter darkness, incapable of participating in the general
improvement; that, while the human race is rapidly [**174]
advancing, they are stationary. Reasoning a priori, we should believe, that
learned and intelligent men, selected by its patrons for the government of a
literary institution, would select learned and intelligent men for their
successors; men as well fitted for the government of a college as those who
might be chosen by other means. Should this reasoning ever prove erroneous in a
particular case, public opinion, as has been stated at the bar, would correct
the institution. The mere possibility of the contrary would not justify a
construction of the constitution, which should exclude these contracts from the
protection of a provision whose terms comprehend them.
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.
2. 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.
[*651] From the review of this charter, which has been taken, it
appears, [**175] that the whole power of governing the college, of
appointing and removing tutors, of fixing their salaries, of directing the
course of study to be pursued by the students, and of filling up vacancies
created in their own body, was vested in the trustees. On the part of the crown
it was expressly stipulated, that this corporation, thus constituted, should
continue forever; and that the number of trustees should forever consist of
twelve, and no more. By this contract the crown was bound, and could have made
no violent alteration in its essential terms, without impairing its obligation.
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 [**176] at any time prior to the adoption of the present
constitution of the United States, would have been an extraordinary
[***663] 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, [*652] 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," increase 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 [**177] 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. [*653] 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, moulded according to the will of its
[**178] 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, [**179] until the
trustees shall make choice [*654] 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,
being of opinion, on general principles, that in these private eleemosynary
institutions, the body corporate, as possessing the whole legal and equitable
interest, and completely representing the donors, for the purpose of executing
the trust, has rights which are protected by the constitution.
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 [**180] 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.
CONCURBY: WASHINGTON; STORY
CONCUR: Mr. Justice WASHINGTON. -- This cause turns upon the
validity of certain laws of the State of New-Hampshire, which have been stated
in the case, and which, it is contended by the counsel for the plaintiffs
[*655] in error, are void, being repugnant to the constitution of
that State, and also to the constitution of the United States. Whether the
first objection to these laws be well founded or not, is a question with which
this Court, in this case, has nothing to do: because it has no jurisdication,
as an appellate Court, over the decisions of a State Court, except in cases
where is drawn in question the validity of a treaty, or statute of, or an
authority exercised under, the United States, and the decision is against their
validity; or where is drawn in question the validity of a statute of, or an
authority exercised under, any State, on the ground of their being repugnant to
the constitution, treaties, or laws of the United States, and the decision is
in favour of their validity; [**181] or where is drawn in question
the construction of any clause of the constitution, or of a treaty, or statute
of, or commission held under, the United States, and the decision is against
the title, right, privilege, or exemption specially set up or claimed by either
party, under such clause of the said constitution, treaty, statute, or
commission.
The clause in the constitution of the United States which was drawn in question
in the Court from which this transcript has been sent, is that part of the
tenth section of the first article, which declares, that "no State shall
pass any bill of attainder, ex post facto law, or any law impairing the
obligation of contracts." The decision of the State Court is against the
title specially claimed by the plaintiffs in error, under the above clause, because
they contend, [***664] that the laws of New-Hampshire, above
referred to, [*656] impair the obligation of a contract, and are,
consequently, repugnant to the above clause of the constitution of the United
States, and void.
There are, then, two questions for this court to decide:
1st. Is the charter granted to Dartmouth College on the 13th of December, 1769,
to be considered as a [**182] contract? If it be, then, 2dly. Do
the laws in question impair its obligation?
1. What is a contract? It may be defined to be a transaction between two or
more persons, in which each party comes under an obligation to the other, and
each reciprocally acquires a right to whatever is promised by the other. n77
Under this definition, says Mr. Powell, it is obvious, that every feoffment,
gift, grant, agreement, promise, &c. may be included, because in all there
is a mutual consent of the minds of the parties concerned in them, upon an
agreement between them respecting some property or right that is the object of
the stipulation. He adds, that the ingredients requisite to form a contract,
are, parties, consent, and an obligation to be created or dissolved: these must
all concur, because the regular effect of all contracts is on one side to
acquire, and on the other to part with, some property or rights; or to abridge,
or to restrain natural liberty, by binding the parties to do, or restraining
them from doing, something which before they might have done, or omitted. If a
doubt could exist that a grant is a contract, the point was decided in the case
of Flectcher v. Peck, n78 [*657] [**183] in which it
was laid down, that a contract is either executory or executed; by the former,
a party binds himself to do or not to do a particular thing; the latter is one
in which the object of the contract is performed, and this differs in nothing
from a grant; but whether executed or executory, they both contain obligations
binding on the parties, and both are equally within the provisions of the
constitution of the United States, which forbids the State governments to pass
laws impairing the obligation of contracts.
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n77 Powell on Contr. 6.
n78 6 Cranch, 87.
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If, then, a grant be a contract, within the meaning of the constitution of the
United States, the next inquiry is, whether the creation of a corporation by
charter, be such a grant, as includes an obligation of the nature of a
contract, which no State legislature can pass laws to impair?
A corporation is defined by Mr. Justice Blackstone n79 to be a franchise. It
is, says he, "a franchise for a number of persons, to be incorporated and
exist as a body politic, with a power to maintain perpetual succession, and to
do corporate acts, and each individual of such corporation is also said to have
a franchise, or freedom." This [**184] franchise, like other
franchises, is an incorporeal hereditament, issuing out of something real or
personal, or concerning or annexed to, and exercisable within a thing
corporate. To this grant, or this franchise, the parties are, the king, and the
persons for whose benefit it is created, or trustees for them.The assent of
both is necessary. [*658] The subjects of the grant are not only
privileges and immunities, but property, or, which is the same thing, a
capacity to acquire and to hold property in perpetuity. Certain obligations are
created binding both on the grantor and the grantees. On the part of the
former, it amounts to an extinguishment of the king's prerogative to bestow the
same identical franchise on another corporate body, because it would prejudice
his prior grant. n80 It implies, therefore, a contract not to reassert the right
to grant the franchise to another, or to impair it. There is also an implied
contract, that the founder of a private charity, or his heirs, or other persons
appointed by him for that purpose, shall have the right to visit, and to govern
the corporation, of which he is the acknowledged founder and patron, and also,
that in case of its [**185] dissolution, the reversionary right of
the founder to the property, with which he had endowed it, should be preserved
inviolate.
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n79 2 Bl. Com. 37.
n80 2 Bl. Com. 37.
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The rights acquired by the other contracting party are those of having perpetual
succession, of suing and being sued, of purchasing lands for the benefit of
themselves and their succssors, and of having a common seal, and of making
bye-laws. The obligation imposed upon them, and which forms the consideration
of the grant, is that of acting up to the end or design for which they were
created by their founder. Mr. Justice Buller, in the case of the King v.
Passmore, n81 says, that the grant of incorporation is a compact between the
crown and a number of persons, the latter of whom undertake, in consideration
[*659] of the privileges bestowed, to exert themselves for the
goods government of the place. If they fail to perform their part of it, there
is an end of the compact. The charter of a corporation, says Mr. Justice Blackstone,
n82 may be forfeited through negligence, or abuse of its franchises, in which
case the law judges, that the body politic has broken the condition that the
body politic has broken [**186] the condition upon which it was
incorporated, and thereupon the corporation is void.
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n81 3 T.R. 246.
n82 2 Bl. Com. 484.
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It appears to me, upon the whole, that these principles and authorities prove,
incontrovertibly, that a charter of incorporation is a contract.
2. The next question is, do the acts of the legislature of New-Hampshire of the
27th of June, and 18th and 26th of December, 1816, impair this contract, within
the true intent and meaning of the constitution of the United States?
Previous to the examination of this question, it will be proper clearly to mark
the distinction between the different kinds of lay aggregate corporations, in
order to prevent any implied decision by this Court of any other case, than the
one immediately before it.
We are informed, by the case of Philips v. Bury, n83 which contains all the
doctrine of corporations connected with this point, that there are two kinds of
corporations aggregate, viz. such as are for public government, and such as are
for private charity. The first are those for the government of a town, city, or
the like; and being for public advantage, are [*660] to be governed
according to the law [***665] of the [**187] land. The
validity and justice of the their private laws and constitutions are examinable
in the king's Courts. Of these there are no particular founders, and
consequently no particular visitor. There are no patrons of these corporations.
But private and particular corporations for charity, founded and endowed by
private persons, are subject to the private government of those who erect them,
and are to be visited by them or their heirs, or such other persons as they may
appoint. The only rules for the government of these private corporations are
the laws and constitutions assigned by the founder. This right of government
and visitation arises from the property which the founder had in the lands
assigned to support the charity; and, as he is the author of the charity, the
law invests him with the necessary power of inspecting and regulating it. The
authorities are full to prove, that a college is a private charity, as well as
a hospital, and that there is, in reality, no difference between them, except
in degree; but they are within the same reason, and both eleemosynary. n83
These corporations, civil and eleemosynary, which differ from each other so
especially in their nature [**188] and constitution, may very well
differ in matters which concern their rights and privileges, and their
existence and subjection to public control. The one is the mere creature of
public institution, created exclusively for the public advantage, without other
endowments than such as the king or government may bestow upon it, and having
no other founder or visitor than the king or government, the Fundator
incipiens. [*661] The validity and justice of its laws and
constitution are examinable by the Courts having jurisdiction over them; and they
are subject to the general law of the land. It would seem reasonable, that such
a corporation may be controlled, and its constitution altered and amended by
the government, in such manner as the public interest may require. Such
legislative interferences cannot be said to impair the contract by which the
corporation was formed, because there is in reality but one party to it, the
trustees or governors of the corporation being merely the trustees for the
public, the cestui que trust of the foundation. These trustees or governors
have no interest, no privileges or immunities, which are violated by such
interference, and can have no more [**189] right to complain of
them, than an ordinary trustee, who is called upon in a Court of Equity to
execute the trust. They accepted the charter for the public benefit alone, and
there would seem to be no reason why the government, under proper limitations,
should not alter or modify such a grant at pleasure. But the case of a private
corporation is entirely different. That is the creature of private benefaction
for a charity or private purpose. It is endowed and founded by private persons,
and subject to their control, laws, and visitation, and not to the general
control of the government; and all these powers, rights and privileges, flow
from the property of the founder in the funds assigned for the support of the
charity.Although the king, by the grant of the charter, is in some sense the
founder of all eleemosynary corporations, because without his grant they cannot
exist; yet the patron or endower is the perficient founder, to whom belongs, as
of [*662] right, all the powers and privilege, which have been
described. With such a corporation, it is not competent for the legislature to
interfere. It is a franchise, or incorporeal hereditament, founded upon private
property, [**190] devoted by its patron to a private charity of a
peculiar kind, the offspring of his own will and pleasure, to be managed and
visited by persons of his own appointment, according to such laws and regulations
as he, or the persons so selected, may ordain.
It has been shown, that the charter is a contract on the part of the
government, that the property with which the charity is endowed, shall be for
ever vested in a certain number of persons, and their successors, to subserve
the particular purposes designated by the founder, and to be managed in a
particular way. If a law increases or diminishes the number of the trustees,
they are not the persons which the grantor agreed should be the managers of the
fund. If it appropriate the fund intended for the support of a particular
charity to that of some other charity, or to an entirely different charity, the
grant is in effect set aside, and a new contract substituted in its place; thus
disappointing completely the intentions of the founder, by changing the objects
of his bounty. And can it be seriously contended, that a law, which changes so
materially the terms of a contract, does not impair it? In short, does not
every alteration [**191] of a contract, however, unimportant, even
though it be manifestly for the interest of the party objecting to it, impair
its obligation? If the assent of all the parties to be bound by a contract be
of its essence, how [*663] is it possible that a new contract,
substituted for, or engrafted on another, without such assent, should not
violate the old charter?
This course of reasoning, which appears to be perfectly manifest, is not
without authority to support it. Mr. Justice Blackstone lays it down, n84 that
the same identical franchise, that has been before granted to one, cannot be
bestowed on another; and the reason assigned is, that it would prejudice the
former grant. In the King v. Passmore, n85 Lord Kenyon says, that an existing
corporation cannot have another charter obtruded upon it by the crown. It may
reject it, or accept the whole, or any part of the new charter. The reason is
obvious. A charter is a contract, to the validity of which the consent of both
parties is essential, and, therefore, it cannot be altered or added to without
such consent.
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n84 Bl. Com. 37.
n85 3 T.R. 246.
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But the case of Terrett v. Taylor, n86 fully supports the distinction above
[**192] stated, between civil and private corporations, and is
entirely in point. It was decided in that case, that a private corporation,
created by the legislature, may lose its franchises by misuser, or non-user,
and may be resumed by the government under a judicial judgment of forfeiture.
In respect to public corporations which exist only for public purposes, such as
towns, cities, &c. the legislature may, under proper limitations, change, modify,
enlarge, or restrain them, securing, however, the property for the use of those
for whom, and at whose expense, it was purchased. [***666] But it
is denied, that it has power to repeal [*664] statutes creating
private corporations, or confirming to them property already acquired under the
faith of previous laws; and that it can, by such repeal, vest the property of
such corporations in the State, or dispose of the same to such purposes as it
may please, without the consent or default of the corporators. Such a law, it
is declared, would be repugnant both to the spirit and the letter of the
constitution of the United States.
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n86 9 Cranch, 43.
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If these principles, before laid down, be correct, it cannot be denied, that
the obligations [**193] of the charter to Dartmouth College are
impaired by the laws under consideration. The name of the corporation, its
constitution and government, and the objects of the founder, and of the grantor
of the charter, are totally changed. By the charter, the property of this
founder was vested in twelve trustees, and no more, to be disposed of by them,
or a majority, for the support of a college, for the education and instruction
of the Indians, and also of English youth, and others. Under the late acts, the
trustees and visitors are different; and the property and franchises of the
college are transferred to different and new uses, not contemplated by the
founder. In short, it is most obvious, that the effect of these laws is to
abolish the old corporation, and to create a new one in its stead. The laws of
Virginia, referred to in the case of Terrett v. Taylor, authorized the
overseers of the poor to sell the glebes belonging to the Protestant Episcopal
Church, and to appropriate the proceeds to other uses. The laws in question
devest the trustees of Dartmouth College of the property vested in them [*665]
by the founder, and vest it in other trustees, for the support of a different
[**194] institution, called Dartmouth University. In what respects
do they differ? Would the difference have been greater in principle, if the law
had appropriated the funds of the college to the making of turnpike roads, or
to any other purpose of a public nature? In all respects, in which the contract
has been altered without the assent of the corporation, its obligations have
been impaired; and the degree can make no difference in the construction of the
above provision of the constitution.
It has been insisted in the argument at the bar, that Dartmouth College was a
mere civil corporation, created for a public purpose, the public being deeply
interested in the education of its youth; and that, consequently, the charter
was as much under the control of the government of New-Hampshire, as if the
corporation had concerned the government of a town or city. But it has been
shown, that the authorities are all the other way. There is not a case to be
found which contradicts the doctrine laid down in the case of Philips v. Bury,
viz. that a college founded by an individual, or individuals, is a private
charity, subject to the government and visitation of the founder, and not to
the unlimited [**195] control of the government.
It is objected, in this case, that Dr. Wheelock is not the founder of Dartmouth
College. Admit he is not. How would this alter the case? Neither the king, nor
the province of New-Hampshire was the founder; and if the contributions made by
the governor of New-Hampshire, by those persons who [*666] granted
lands for the college, in order to induce its location in a particular part of
the State, by the other liberal contributors in England and America, bestow
upon them claims equal with Dr. Wheelock, still it would not alter the nature
of the corporation, and convert it into one for public government. It would
still be a private eleemosynary corporation, a private charity endowed by a
number of persons, instead of a single individual. But the fact is, that
whoever may mediately have contributed to swell the funds of this charity, they
were bestowed at the solicitation of Dr. Wheelock, and vested in persons
appointed by him, for the use of a charity, of which he was the immediate
founder, and is so styled in the charter.
Upon the whole, I am of opinion, that the above acts of New-Hampshire, not
having received the assent of the corporate body of Dartmouth
[**196] College, are not binding on them, and, consequently, that
the judgment of the State Court ought to be reversed.
Mr. Justice JOHNSON concurred, for the reasons stated by the Chief Justice.
Mr. Justice LIVINGSTON concurred, for the reasons stated by the Chief Justice,
and Justices WASHINGTON and STORY.
Mr. Justice STORY. This is a cause of great importance, and as the very learned
discussions, as well here, as in the State Court, show, of no inconsiderable
difficulty. There are two questions, to which the appellate jurisdiction of
this Court properly applies. [*667] 1. Whether the original charter
of Dartmouth College is a contract within the prohibitory clause of the
constitution of the United States, which declares, that no State shall pass any
"law impairing the obligation of contracts." 2. If so, whether the
legislative acts of New-Hampshire of the 27th of June, and of the 18th and 27th
of December, 1816, or any of them, impair the obligations of that charter.
It will be nacessary, however, before we proceed to discuss these questions, to
institute an inquiry into the nature, rights, and duties of aggregate
corporations at common law; that we may apply the principles,
[**197] drawn from this source, to the exposition of this charter,
which was granted emphatically with reference to that law.
An aggregate corporation at common law is a collection of individuals united
into one collective body, under a special name, and possessing certain
immunities, privileges, and capacities in its collective character, which do
not belong to the natural persons composing it. Among other things it possesses
the capacity of perpetual succession, and of acting by the collected vote or
will of its component members, and of suing and being sued in all things
touching its corporate rights and duties. It is, in short, an artificial
person, existing in contemplation of law, and endowed with certain powers and
franchises which, though they must be exercised through the medium of its
natural members, are yet considered as subsisting in the corporation itself, as
distinctly as if it were a real personage. Hence, such a corporation may sue
and be sued by its own members; and [*668] [***667] may
contract with them in the same manner as with any strangers. n67 A great
variety of these corporations exist in every country governed by the common
law; in some of which the corporate [**198] existence is
perpetuated by new elections, made from time to time; and in others by a
continual accession of new members, without any corporate act. Some of these
corporations are, from the particular purposes to which they are devoted,
denominated spiritual, and some law; and the latter are again divided into
civil and eleemosynary corporations. It is unnecessary, in this place, to enter
into any examination of civil corporations. Eleemosynary corporations are such
as are constituted for the perpetual distribution of the free alms and bounty
of the founder, in such manner as he has directed; and in this class are ranked
hospitals for the relief of poor and impotent persons, and colleges for the
promotion of learning and piety, and the support of persons engaged in literary
pursuits. n88
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n87 1 Bl. Com. 469. 475. 1 Kyd Corp. 13. 69. 189. 1 Woodes. 471. &c.
&c.
n88 1 Bl. Com. 469. 470. 471. 482. 1 Kyd Corp. 25. 1 Woodes. 474. Attorney
General v. Whorwood, 1 Ves. 534. St John's College v. Todington, 1 Bl. Rep. 84.
S.C. 1 Bur. 200. Phillips v. Bury, 1 Ld. Raym. 5. S.C. 2 T.R. 346. Porter's
Case, 1 Co. 22. b. 23.
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Another division of corporations is into public and private.Public
[**199] corporations are generally esteemed such as exist for
public political purposes only, such as towns, cities, parishes, and counties;
and in many respects they are so, although they involve some private interests;
but strictly speaking, public corporations [*669] are such only as
are founded by the government for public purposes, where the whole interests
belong also to the government. If, therefore, the foundation be private, though
under the charter of the government, the corporation is private, however
extensive the uses may be to which it is devoted, either by the bounty of the
founder, or the nature and objects of the institution. For instance, a bank
created by the government for its own uses, whose stock is exclusively owned by
the government, is, in the strictest sense, a public corporation. So a hospital
created and endowed by the government for general charity. But a bank, whose
stock is owned by private persons, is a private corporation, although it is
erected by the government, and its objects and operations partake of a public
nature.The same doctrine may be affirmed of insurance, canal, bridge, and
turnpike companies. In all these cases, the uses may, in a certain
[**200] sense, be called public, but the corporations are private;
as much so, indeed, as if the franchises were vested in a single person.
This reasoning applies in its full force to eleemosynary corporations. A
hospital founded by a private benefactor is, in point of law, a private
corporation, although dedicated by its charter to general charity. So a
college, founded and endowed in the same manner, although, being for the
promotion of learning and piety, it may extend its charity to scholars from
every class in the community, and thus acquire the character of a public
institution. This is the unequivocal doctrine of the authorities; and cannot be
[*670] shaken but by undermining the most solid foundations of the
common law. n89
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n89 Phillips v. Bury, 1 Ld. Ray. 5. 9. S.C. 2 T.R. 346.
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It was indeed supposed at the argument, that if the uses of an eleemosynary
corporation be for general charity, this alone would constitute it a public
corporation. But the law is certainly not so. To be sure, in a certain sense,
every charity, which is extensive in its reach, may be called a public charity,
in contradistinction to a charity embracing but a few definite objects. In this
sense [**201] the language was unquestionably used by Lord Hardwicke
in the case cited at the argument; n90 and, in this sense, a private
corporation may well enough be denominated a public charity. So it would be, if
the endowment, instead of being vested in a corporation, were assigned to a
private trustee; yet in such a case no one would imagine that the trust ceased
to be private, or the funds became public property. That the mere act of
incorporation will not change the charity from a private to a public one, is
most distinctly asserted in the authorities. Lord Hardwicke, in the case
already alluded to, says, "the charter of the crown cannot make a charity
more or less public, but only more permanent than it would otherwise be; but it
is the extensiveness, which will constitute it a public one. A devise to the
poor of the parish is a public charity. Where testators leave it to the
discretion of a trustee to choose out the objects, though each particular
[*671] object may be said to be private, yet in the extensiveness
of the benefit accruing from them, they may properly be called public
charities. A sum to be disposed of by A. B. and his executors, at their
discretion, among poor [**202] house-keepers, is of this
kind." The charity, then, may, in this sense, be public, although it may
be administered by private trustees; and, for the same reason, it may thus be
public, though administered by a private corporation. The fact, then, that the
charity is public, affords no proof that the corporation is also public; and,
consequently, the argument, so far as it is built on this foundation, falls to
the ground. If, indeed, the argument were correct, it would follow, that almost
every hospital and college would be a public corporation; a doctrine utterly
irreconcilable with the whole current of decisions since the time of Lord Coke.
n91
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n90 Attorney General v. Pearse, 2 Atk. 87. 1 Bac. Abr. tit Charitable Uses, E.
589.
n91 The case of Sutton's Hospital, 10 Co. 23.
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When, then, the argument assumes, that because the charity is public, the
corporation is public, it manifestly confounds the popular, with the strictly
legal sense of the terms. And if it stopped here, it would not be very material
to correct the error. But it is on this foundation, that a superstructure is
erected, which is to compel a surrender of the cause. When the corporation is
said at the bar to [**203] be public, it is not merely meant, that
the whole community may be the proper objects of the bounty, but that the
government have the sole right, as trustees of the public interests, to
regulate, control, and direct the public interests, to regulate, control, and
direct the corporation, and its funds and its franchises, at its own good will
and pleasure. Now, such [*672] an authority does not exist in the
government, except [***668] where the corporation is in the
strictest sense public; that is, where its whole interests and franchises are
the exclusive property and domain of the government itself. If it had been
otherwise, Courts of law would have been spared many laborious adjudications in
respect to eleemosynary corporations, and the visitatorial powers over them,
from the time of Lord Holt down to the present day. n92 Nay, more, private
trustees for charitable purposes would have been liable to have the property
confided to their care taken away from them without any assent or default on
their part, and the administration submitted, not to the control of law and
equity, but to the arbitrary discretion of the government. Yet, who ever
thought before, that the munificent [**204] gifts of private donors
for general charity became instantaneously the property of the government; and
that the trustees appointed by the donors, whether corporate or unincorporated,
might be compelled to yield up their rights to whomsoever the government might
appoint to administer them? If we were to establish such a principle, it would
extinguish all future eleemosynary endowments; and we should find as little of
public policy, as we now find of law to sustain it.
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n92 Rex v. Bury, 1 Ld. Ray. 5. S.C. Comb. 265. Holt, 715. 1 Show. 360. 4 Mod.
106. Skin. 447. and Ld. Holt's opinion from his own MS. in 2 T.R. 346.
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An eleemosynary corporation, then, upon a private foundation, being a private
corporation, it is next to be considered, what is deemed a foundation,
[*673] and who is the founder. This cannot be stated with more
brevity and exactness than in the language of the elegant commentator upon the
laws of England: "The founder of all corporations (says Sir William
Blackstone,) in the strictest and original sense, is the king alone, for he
only can incorporate a society; and in civil corporations, such as mayor,
commonalty, &c. where there are no possessions or endowments
[**205] given to the body, ther is no other founder but the king;
but in eleemosynary foundations, such as colleges and hospitals, where there is
an endowment of lands, the law distinguishes and maks two species of
foundation, the one fundatio incipiens, or the incorporation, in which sense
the king is the general founder of all colleges and hospitals; the other
fundatio perficiens, or the dotation of it, in which sense the first gift of
the revenues is the foundation, and he who gives them is, in the law, the
founder; and it is in this last sense we generally call a man the founder of a
college or hospital." n93
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n93 1 Bl. Com. 480. 10 Co. 33.
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To all eleemosynary corporations a visitatorial power attaches, as a necessary
incident; for these corporations being composed of individuals, subject to
human infirmities, are liable, as well as private persons, to deviate from the
end of their institution. The law, therefore, has provided, that there shall
somewhere exist a power to visit, inquire into, and correct all irregularities
and abuses in such corporations, and to compel the original purposes of the
charity to be faithfully fulfilled. n94 The nature and extent of this
visitatorial [**206] power has been expounded [*674]
with admirable fulness and accuracy by Lord Holt in one of his most celebrated
judgments. n95 And of common right by the dotation the founder and his heirs
are the legal visitors, unless the founder has appointed and assigned another
person to be visitor. For the founder may, if he please, at the time of the
endowment, part with his visitatorial power, and the person to whom it is
assigned will, in that case, possess it in exclusion of the founder's heirs.
n96 This visitatorial power is, therefore, an hereditament founded in property,
and valuable in intendment of law; and stands upon the maxim, that he who gives
his property, has a right to regulate it in future. It includes also the legal
right of patronage, for as Lord Holt justly observes, "patronage and
visitation are necessary consequents one upon another." No technical terms
are necessary to assign or vest the visitatorial power; it is sufficient if,
from the nature of the duties to be performed by particular persons under the
charter, it can be inferred, that the founder meant to part with it in their
favour; and he may divide it among various persons, or subject it to any
modifications [**207] or control, by the fundamental statutes of
the corporation. But where the appointment is given in general terms, the whole
power vests in the appointee. n97 In the construction [*675] of
charters too, it is a general rule, that if the objects of the charity are
incorporated, as for instance, the master and fellows of a college, or the
master and poor of a hospital, the visitatorial power, in the absence of any
special appointment, silently vests in the founder and his heirs. But where
trustees or governors are incorporated to manage the charity, the visitatorial
power is deemed to belong to them in their corporate character. n98
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n94 1 Bl. Com. 480.
n95 Phillips v. Bury, 1 Ld. Ray. 5. S.C. 2 T.R. 346.
n96 1 Bl. Com. 482.
n97 Eden v. Foster, 2 P.W. 325. Attorney General v. Middleton, 2 Ves. 327. St.
Johns College v. Todington, 1 Bl. Rep. 84. S.C. 2 Bur. 200. Attorney General v.
Clare College, 3 Atk. 662. S.C. 1 Ves. 78.
n98 Phillips v. Bury, 1 Ld. Ray. 5. S.C. 2 T.R. 346. Green v. Rutherforth, 1
Ves. 472. Attorney General v. Middleton, 2 Ves. 327. Case of Sutton Hospital,
10 Co. 23. 31.
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When a private eleemosynary corporation is thus created by the charter of the
crown, [**208] it is subject to no other control on the part of the
crown, than what is expressly or implicitly reserved by the charter itself.
Unless a power be reserved for this purpose, the crown cannot, in virtue of its
prerogative, without the consent of the corporation, alter or amend the
charter, or devest the corporation of any of its franchises, or add to them, or
add to, or diminish, the number of the trustees, or remove any of the members,
or change, or control the administration of the charity, or compel the
corporation to receive a new charter. This is the uniform language of the
authorities, and forms one of the most stubborn, and well settled doctrines of
the common law. n99
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n99 See Rex v. Passmore, 3 T.R. 199. and the case there cited.
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But an eleemosynary, like every other corporation, is subject to the general
law of the land.It may forfeit its corporate franchises, by misuser or nonuser
[*676] of them. It is subject to the controling authority of its
legal visitor, who, unless restrained by the terms of the charter, may amend
and repeal its statutes, remove [***669] its officers, correct
abuses, and generally superintend the management of the trusts. Where indeed
[**209] the visitatorial power is vested in the trustees of the
charity in virtue of their incorporation, there can be no amotion of them from
their corporate capacity. But they are not, therefore, placed beyond the reach
of the law. As managers of the revenues of the corporation, they are subject to
the general superintending power of the Court of Chancery, not as itself
possessing a visitatorial power, or a right to control the charity, but as
possessing a general jurisdiction in all cases of an abuse of trusts to redress
grievances, and suppress frauds. n100 And where a corporation is a mere trustee
of a charity, a Court of equity will go yet farther; and though it cannot
appoint or remove a corporator, it will yet, in a case of [*677]
gross fraud, or abuse of trust, take away the trust from the corporation, and
vest it in other hands. n101
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n100 2 Fonb. Eq. B. 2. pt. 2. ch. 1. s. 1. note (a.) Coop. Eq. Pl. 292. 2 Kyd
Corp. 195. Green v. Rutherforth, 1 Ves. 462. Attorney General v. Foundling Hospital,
4 Bro. Ch. 165. S.C. 2 Ves. jun. 42. Eden v. Foster, 2 P.W. 325. 1 Woodes. 476.
Attorney General v. Price, 3 Atk. 108. Attorney General v. Lock, 3 Atk. 164.
Attorney General v. Dixie, 13 Ves. 519. Ex parte Kirkby Ravensworth Hospital,
15 Ves. 304. 314. Attorney General v. Earl of Clarendon, 17 Ves. 491. 499.
Berkhamstead Free School, 2 Ves. & Beames, 134. Attorney Geenral v.
Corporation of Carmarthen, Coop. Rep. 30. Mayor, &c. of Colchester v.
Lowten, 1 Ves. & Beames, 226. Rex v. Watson, 2 T.R. 199. Attorney General
v. Utica Ins. Co. 2 Johns. Ch. R. 371. Attorney General v. Middleton, 2 Ves.
327.
n101 Mayor, &c. of Coventry v. Attorney General, 7 Bro. Parl. Cases, 235.
Attorney General v. Earl of Clarendon, 17 Ves. 491. 499.
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[**210]
Thus much it has been thought proper to premise respecting the nature, rights,
and duties of eleemosynary corporations, growing out of the common law. We may
now proceed to an examination of the original charter of Dartmouth College.
It begins by a recital, among other things, that the Rev. Eleazer Wheelock, of
Lebanon, in Connecticut, about the year 1754, at his own expense, on his own
estate, set on foot an Indian charity school; and by the assistance of other
persons, educated a number of the children of the Indians, and employed them as
missionaries and schoolmaters among the savage tribes; that the design became
reputable among the Indians, so that more desired the education of their
children at the school, than the contributions in the American colonies would
support; that the said Wheelock thought it expedient to endeavour to procure
contributions in England, and requested the Rev. Nathaniel Whitaker to go to
England as his attorney, to solicit contribution, and also solicited the Earl
of Dartmouth, and others, to receive the contributions and become trustees
thereof, which they cheerfully agreed to, and he constituted them trustees
accordingly by a power of attorney, and [**211] they testified
their acceptance by a sealed instrument; That the said Wheelock also authorized
the trustees to fix and determine [*678] upon the place for the
said school; and, to enable them understandingly to give the preference, laid
before them, the several offers of the governments in America, inviting the
settlement of the school among them; that a large number of the proprietors of
lands, in the western parts of New-Hampshire, to aid the design; and
considering that the same school might be enlarged and improved to promote
learning among the English, and to supply the churches there with an orthodox
ministry, promised large tracts of land for the uses aforesaid, provided the
school should be settled in the western part of said province; that the trustees
thereupon gave a preference to the western part of said province, lying on
Connecticut river, as a situation most convenient for said school: That the
said Wheelock further represented the necessity for a legal incorporation, in
order to the safety and well-being of said seminary, and its being capable of
the tenure and diposal of lands and bequests for the use of the same; that in
the infancy of said institution, certain [**212] gentlemen whom he
had already nominated in his last will (which he had transmitted to the
trustees in England) to be trustees in America, should be the corporation now
proposed; and lastly, that there were already large contributions for said
school in the hands of the trustees in England, and further success might be
expected; for which reason the said Wheelock desired they might be invested
with all that power therein, which could consist with their distance from the
same. The charter, after these recitals, declares, that the king, considering
the premises, and being willing to [*679] encourage the charitable
design, and that the best means of education might be established in
New-Hampshire for the benefit thereof, does, of his special grace, certain
knowledge, and mere motion, ordain and grant, that there be a college erected
in New-Hampshire, by the name of Dartmouth College, for the education and
instruction of youth of the Indian tribes, and also of English youth and
others; that the trustees of said college shall be a corporation forever, by
the name of the trustees of Dartmouth College: that the then governor of
New-Hampshire, the said Wheelock, and ten other persons, [**213]
specially named in the charter, shall be trustees of the said college, and that
the whole number of trustees shall forever thereafter consist of tweleve, and
no more; that the said corporation shall have power to sue and to be sued by
their corporate name, and to acquire and hold for the use of the said Dartmouth
College, lands, tenements, hereditaments, and franchises; to receive, purchase,
and build any houses for the use of said college, in such town in the western
part of New-Hampshire, as the trustees, or a major part of them, shall be a
written instrument agree on; and to receive, accept, and dispose of any lands,
goods, chattels, rents, gifts, legacies, &c. &c. not exceeding the
yearly value of 6,000l. It further declares, that the trustees, or a major part
of them, regularly convened, (for which purpose seven shall form a quorum,)
shall have authority to appoint and remove the professors, tutors, and other
officers of the college, and to pay them, and also such missionaries and
schoolmasters as shall be employed by the trustees for instructing the Indians,
salaries and [*680] allowances, as well as other corporate
expenses, out of the corporate funds. It further declares, [**214]
that, the said trustees, as often as one or more of the trustees shall die, or,
by removal or otherwise, shall, according to their judgment, become unfit
[***670] or incapable to serve the interests of the college, shall
have power to elect and appoint other trustees in their stead, so that when the
whole number shall be complete of twelve trustees, eight shall be resident
freeholders of New-Hampshire, and seven of the whole number, laymen. It further
declares that the trustees shll have power from time to time to make and
establish rules, ordinaances, and laws for the government of the college not
repugnant to the laws of the land, and to confer collegiate degrees. It further
appoints the said Wheelock, whom it denominates "the FOUNDER of the
college," to be president of the college, with authority to appoint his
successor, who shall be president until disapproved of by the trustees. It then
concludes with a direction, that it shall be the duty of the president to
transmit to the trustees in England, so long as they should perpetuate their
board, and as there should be Indian natives remaining to be proper objects of
the bounty, an annual account of all the disbursements from [**215]
the donations in England, and of the general plans and prosperity of the
institution.
Such are the most material clauses of the charter. It is observable, in the
first place, that no endowment whatever is given by the crown; and no power is
reserved to the crown or government in any manner to alter, amend, or control
the charter. It is also apparent, [*681] from the very terms of the
charter, that Dr. Wheelock is recognized as the founder of the college, and
that the charter is granted upon his application, and that the trustees were in
fact nominated by him. In the next place it is apparent, that the objects of
the institution are purely charitable, for the distribution of the private
contributions of private benefactors. The charity was, in the sense already
expalined, a public charity, that is, for the general promotion of learning and
peity; but in this respect it was just as much public before, as after the
incorporation. The only effect of the charter was to give permanency to the
design, by enlarging the sphere of its action, and granting a perpetuity of
corporate powers and franchises the better to secure the administration of the
benevolent donations. As founder, [**216] too, Dr. Wheelock and his
heirs would have been completely clothed with the visitatorial power; but the
whole government and control, as well of the officers as of the revenues of the
college, being with his consent assigned to the trustees in their corporate
character, the visitatorial power, which is included in this authority,
rightfully devolved on the trustees. As managers of the property and revenues
of the corporation, they were amenable to the jurisdiction of the judicial
tribunals of the State; but as visitors, their discretion or control, the
charter, and liable to no supervision or control, at least, unless it was
fraudulently misapplied.
From this summary examination it follows, that Dartmouth College was, under its
original charter, a private eleemosynary corporation, endowed with
[*682] the usual privileges and franchises of such corporations,
and, among others, with a legal perpetuity, and was exclusively under the
government and control of twelve trustees, who were to be elected and
appointed, from time to time, by the existing board, as vacancies or removals
should occur.
We are now led to the consideration of the first question in the cause, whether
this charter [**217] is a contract, within the clause of the
constitution prohibiting the States from passing any law impairing the
obligation of contracts. In the case of Fletcher v. Peck, n102 this Court laid
down its exposition of the word "contract" in this clause, in the
following manner: "A contract is a compact between two or more persons,
and is either executory or executed. An executory contract is one, in which a party
binds himself to do or not to do a particular thing. A contract executed is one
in which the object of the contract is performed; and this, says Blackstone,
differs in nothing from a grant. A contract executed, as well as one that is
executory, contains obligations binding on the parties. A grant in its own
nature amounts to an extinguishment of the right of the grantor, and implies a
contract not to reassert that right. A party is always estopped by his own
grant," This language is perfectly unambiguous, and was used in reference
to a grant of land by the Governor of a State under a legislative act. It
determines, in the most unequivocal manner, that the grant of a State is a
contract within the clause of [*683] the constitution now in
question, and that it implies [**218] a contract not to reassume
the rights granted. A fortiori, the doctrine applies to a charter or grant from
the king.
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n102 6 Cranch, 87. 136.
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But it is objected, that the charter of Dartmouth College is not a contract
contemplated by the constitution, because no valuable consideration passed to
the king as an equivalent for the grant, it purporting to be granted ex mero
motu, and further, that no contracts merely voluntary are within the
prohibitory clause. It must be admitted, that mere executory contracts cannot
be enforced at law, unless there be a valuable consideration to sustain them;
and the constitution certainly did not mean to create any new obligations, or
give any new efficacy to nude pacts. But it must, on the other hand, be also
admitted, that the constitution did intend to preserve all the obligatory force
of contracts, which they have by the general principles of law. Now, when a
contract has once passed, bona, fide, into grant, neither the king nor any
private person, who may be the grantor, can recal the grant of the property,
although the conveyance may have been purely voluntary. A gift, completely
executed, is irrevocable. The property conveyed by it [**219]
becomes, as against the donor, the absolute property of the donee; and no
subsequent change of intention of the donor can change the rights of the donee.
n103 And a gift by the crown of incorporeal hereditaments, such as corporate
franchises, when executed, comes completely [*684] within the
principle, and is, in the strictest sense of the terms, a grant. n104 Was it
ever imagined that land, voluntarily granted to any person by a State, was
liable to be resumed at its own good pleasure" Such a pretension would,
under any circumstances, be truly alarming; but in a country like ours, where
thousands of land titles had their origin in gratuitous grants of the States,
it would go far to shake the foundations of the best settled
[***671] estates. And a grant of franchises is not, in point of
principle, distinguishable from a grant of any other property. If, therefore,
this charter were a pure donation, when the grant was complete, and accepted by
the grantees, it involved a contract, that the grantees should hold, and the
grantor should not reassume the grant, as much as if it had been founded on the
most valuable consideration.
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n103 2 Bl. Com. 441. Jenk. Cent. 104.
n104 2 Bl Com. 317. 346. Shep. Touch. ch. 12. p. 227.
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[**220]
But it is not admitted that this charter was not granted for what the law deems
a valuable consideration. For this purpose it matters not how trifling the
consideration may be; a pepper corn is as good as a thousand dollars. Nor is it
necessary that the consideration should be a benefit to the grantor. It is
sufficient if it import damage or loss, or forbearanc of benefit, or any act
done, or to be done, on the part of the grantee. It is unnecessary to state
cases; they are familiar to the mind of every lawyer. n105
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n105 Pillans v. Van Mierop. per Yates, J. 3 Burr. 1663. Forth v. Statunton, 2
Saund. Rep. 211. Williams' note 2, and the cases there cited.
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With these principles in view, let us now examine [*685] the terms
of this charter.It purports, indeed, on its face, to be granted "of the
special grace, certain knowledge, and mere motion" of the king; but these
words were introduced for a very different purpose from that now contended for.
It is a general rule of the common law, (the reverse of that applied in
ordinary cases,) that a grant of the king, at the suit of the grantee, is to be
construed most beneficially for the king, and most strictly against the
grantee. [**221] Wherefore, it is usual to insert in the king's
grants a clause, that they are made, not a the suit of the grantee, but of the
special grace, certain knowledge, and mere motion of the king; and then they
receive a more liberal construction. This is the true object of the clause in
question, as we are informed by the most accurate authorities. n106 But the
charter also, on its face, purports to be granted in consideration of the premises
in the introductory recitals. Now, among these recitals it appears, that Dr.
Wheelock had founded a charity school at his own expense, on his own estate;
that divers contributions had been made in the colonies, by others, for its
support; that new contributions had been made, and were making, in England for
this purpose, and were in the hands of trustees appointed by Dr. Wheelock to
act in his behalf; that Dr. Wheelock had consented to have the school
established at such other place as the trustees should select; that offers had
been made by several of the governments in America, inviting the
[*686] establishment of the school among them; that offers of land
had also been made by divers proprietors of lands in the western parts of
New-Hampshire, [**222] if the school should be established there;
that the trustees had finally consented to established it in New-Hampshire; and
that Dr. Wheelock represented that, to effectuate the purposes of all parties,
an incorporation was necessary. Can it be truly said that these recitals
contain no legal consideration of benefit to the crown, or of forbearance of
benefit on the other side? Is there not an implied contract by Dr. Wheelock, if
a charter is granted, that the school shall be removed from his estate to
New-Hampshire? and that he will relinquish all his control over the funds
collected, and to be collected, in England, under his auspices, and subject to
his authority? that he will yield up the management of his charity school to
the trustees of the college?that he will relinquish all the offers made by
other American governments, and devote his patronage to this institution? It
will scarcely be denied, that he gave up the right any longer to maintain the
charity school already established on his own estate; and that the funds
collected for its use, and subject to his management, were yielded up by him as
an endowment of the college. The very language of the charter supposes him to
[**223] be the legal owner of the funds of the charity school, and,
in virtue of this endowment, declares him the founder of the college. It
matters not whether the funds were great or small; Dr. Wheelock had procured
them by his own influence, and they were under his control, to be applied to
the [*687] support of his charity school; and when he relinquished
this control he relinquished a right founded in property acquired by his
labours. Besides; Dr. Wheelock impliedly agreed to devote his future services
to the colleg, when erected, by coming president thereof at a period when
sacrifices must necessarily be made to accomplish the great design in view. If,
indeed, a pepper corn be, in the eye of the law, of sufficient value to found a
contract, as upon a valuable consideration, are these implied agreements, and
these relinquishments of right and benefit, to be deemed wholly worthless? It
has never been doubted, that an agreement not to exercise a trade in a
particular place was a sufficient consideration to sustain a contract for the
payment of money. A fortiori, the relinquishment of property which a person
holds, or controls the use of, as a trust, is a sufficient consideration;
[**224] for it is parting with a legal right. Even a right of
patronage (jus patronatus) is of great value in intendment of law.Nobody doubts,
that an advowson is a valuable hereditament; and yet, in fact, it is but a mere
trust, or right of nomination to a benefice, which cannot be legally sold to
the intended incumbent. n107
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n106 2 Bl. Com. 347. Finch's Law, 100. 10 Rep. 112. 1 Shep. Abridg. 136. Bull,
N.P. 136.
n107 2 Bl. Com. 22. note by Christian.
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In respect to Dr. Wheelock, then, if a consideration be necessary to support
the charter as a contract, it is to be found in the implied stipulations on his
prt in the charter itself. He relinquished valuable rights, and undertook a
laborious office in consideration of the grant of the incorporation.
[*688] This is not all. A charter may be granted upon an executory,
as well as an executed or present consideration. When it is granted to persons
who have not made application for it, until their acceptance thereof, the grant
is yet in fieri. Upon the acceptance there is an implied contract on the part
of the grantees, in consideration of the charter, that they will perform the
duties, and exericse the authorities conferred [**225] by it. This
was the doctrine asserted by the late learned Mr. Justice Buller, in a modern
case. n108 He there said, "I do not know how to reason on this point
better [***672] than in the manner urged by one of the relator's
counsel, who considered the grant of incorporation to be a compact between the
crown, and a certain number of the subjects, the latter of whom undertake, in
consideration of the privileges which are bestowed, to exert themselves for the
good government of the place," (i.e. the place incorporated.) It will not
be pretended, that if a charter be granted for a bank, and the stockholders pay
in their own funds, the charter is to be deemed a grant without consideration,
and, therefore, revocable at the pleasure of the grantor. Yet here, the funds
are to be managed, and the services performed exclusively for the use and
benefit of the stockholders themselves.And where the grantees are mere trustees
to perform services without reward, exclusively for the benefit of others, for
public charity, can it be reasonably argued, that these services are less
valuable to the government, than if performed for the private emolument of
[*689] the trustees themselves? In [**226] respect then
to the trustees also, there was a valuable consideration for the charter, the
consideration of services agreed to be rendered by them in execution of a
charity, from which they could receive no private remuneration.
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n108 Rex v. Passmore, 3 T.R. 199. 239. 246
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There is yet another view of this part of the case, which deserves the most
weighy consideration. The corporation was expressly created for the purpose of
distributing in perpetuity the charitable donations of private benefactors. By
the terms of the charter, the trustees, and their successors, in their
corporate capacity, were to receive, hold, and exclusively manage, all the
funds so contributed. The crown, then, upon the face of the charter, pledged
its faith that the donations of private benefactors should be perpetually
devoted to their original purposes, without any interference on its own part,
and should be forever administered by the trustees of the corporation, unless
its corporate franchises should be taken away by due process of law. From the
very nature of the case, therefore, there was an implied contract on the part
of the crown with every benefactor, that if he would give his money, it should
[**227] be deemed a charity protected by the charter, and be
administered by the corporation according to the general law of the land. As
soon, then, as a donation was made to the corporation, there was an implied
contract springing up, and founded on a valuable consideration, that the crown
would not revoke, or alter the charter, or change its administration, without
the consent of the corporation. There was also an implied contract between the
corporaton itself, and every benefactor [*690] upon a like
consideration, that it would administer his bounty according to the terms, and
for the objects stipulated in the charter.
In every view of the case, if a consideration were necessary (which I utterly
deny) to make the charter a valid contract, a valuable consideration did exist,
as to the founder, the trustees and the benefactors. And upon the soundest
legal principles, the charter may be properly deemed, according to the various
aspects, in which it is viewed, as a several, contract with each of these
parties, in virtue of the foundation, or the endowment of the college, or the
acceptance of the charter, or the donations to the charity.
And here we might pause: but there is yet remaining [**228] another
view of the subject, which cannot consistently be passed over without notice.
It seems to be assumed by the argument of the defendant's counsel, that there
is no contract whatsoever, in virtue of the charter, between the crown and the
corporation itself.But it deserves consideration, whether this assumption can
be sustained upon a solid foundation.
If this had been a new charter granted to an existing corporation, or a grant
of lands to an existing corporation, there could not have been a doubt, that
the grant would have been an executed contract with the corporation; as much
so, as if it had been to any private person. But it is supposed, that as this
corporation was not then in existence, but was created and its franchises
bestowed, uno flatu, the charter cannot be construed a contract, because there
was no person in rerum natura, with whom it might be made. Is this, however, a
just and legal view of the [*691] subject? If the corporation had
no existence so as to become a contracting party, neither had it for the
purpose of receiving a grant of the franchises. The truth is, that there may be
a priority of operation of things in the same grant; and the law distinguishes
[**229] and gives such priority, wherever it is necessary to
effectuate the objects of the grant. n109 From the nature of things, the
artificial person called a corporation, must be created before it can be
capable of taking any thing. When, therefore, a charter is granted, and it
brings the corporation into existence without any act of the natural persons
who compose it, and gives such corporation any privileges, franchises, or
property, the law deems the corporation to be first brought into existence, and
then clothes it with the granted liberties and property. When, on the other
hand, the corporation is to be brought into existence by some future acts of
the corporators, the franchises remain in abeyance, until such acts are done,
and when the corporation is brought into life, the franchises instantaneously
attach to it. There may be, in intendment of law, a priority of time, even in
an instant, for this purpose. n110 And if the corporation have an existence
before the grant of its other franchises attaches, what more difficulty is
there in deeming the grant of these franchises a contract with it, than if
granted by another instrument at a subsequent period? It behooves those also,
[**230] who hold, that a grant to a corporation, not then in
existence, is incapable [*692] of being deemed a contract on that
account, to consider, whether they do not at the same time establish, that the
grant itself is a nullity for precisely the same reason. Yet such a doctrine
would strike us all as pregnant with absurdity, since it would prove that an
act of incorporation could never confer any authorities, or rights, or
property, on the corporation it created. It may be admitted, that two parties
are necessary to form a perfect contract; [***673] but it is denied
that it is necessary, that the assent of both parties must be at the same time.
If the legislature were voluntarily to grant land in fee to the first child of
A. to be hereafter born; as soon as such child should be born, the estate would
vest in it. Would it be contended, that such grant, when it took effect, was
revocable, and not an executed contract, upon the acceptance of the estate? The
same question might be asked in a case of a gratuitous grant by the king or the
ligislature to A. for life, and afterwards to the heirs of B., who is then
living. Take the case of a bank, incorporated for a limited period,
[**231] upon the express condition that it shall pay out of its
corporate funds a certain sum, as the consideration for the charter, and after
the corporation is organized a payment duly made of the sum out of the
corporate funds; will it be contended, that there is not a subsisting contract
between the government and the corporation, by the matters thus arising ex post
facto, that the charter shall not be revoked during the stipulated period?
Suppose an act declaring that all persons, who should thereafter pay into the
public treasury a stipulated sum, should be tenants in common of certain
[*693] lands belonging to the State in certain proportions; if a
person afterwards born, pays the stipulated sum into the treasury, is it less a
contract with him, than it would be with a person in esse at the time the act passed?
We must admit that there may be future springing contracts in respect to
persons not now in esse, or we shall involve ourselves in inextricable
difficulties. And if there may be in respect to natural persons, why not also
in respect to artificial persons, created by the law, for the very purpose of
being clothed with corporate powers? I am unable to distinguish between
[**232] the case of a grant of land or of franchises to an existing
corporation, and a like grant to a corporation brought into life for the very
purpose of receiving the grant. As soon as it is in esse, and the franchises
and property become vested and executed in it, the grant is just as much an
executed contract, as if its prior existence had been established for a
century.
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n109 Case of Sutton's Hospital, 10 Co. 23. Buckland v. Fowcher, cited 10 Co.
27, 28.; and recognized in Attorney General v. Bowyer, 3 Ves. jun. 714. 726.
727. S. P. Highmore on Mortm. 200, &c.
n110 Ib.
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Supposing, however, that in either of the views which have been suggested, the
charter of Dartmouth College is to be deemed a contract, we are yet met with
several objections of another nature.
It is, in the first place, contended, that it is not a contract within the
prohibitory clause of the constitution, because that clause was never intended
to apply to mere contracts of civil institution, such as the contract of
marriage, or to grants of power to State officers, or to contracts relative to
their offices, or to grants of trust to be exercised for purposes merely
public, where the grantees take no beneficial [**233] interest.
It is admitted, that the State legislatures have [*694] power to
enlarge, repeal, and limit the authorities of public officers in their official
capacities, in all cases, where the constitutions of the States respectively do
not prohibit them; and this, among others, for the very reason, that there is
no express or implied contract, that they shall always, during their
continuance in office, exercise such authorities. They are to exercise them
only during the good pleasure of the legislature. But when the legislature
makes a contract with a public officer, as in the case of a stipulated salary
for his services, during a limited period, this, during the limited period, is
just as much a contract, within the purview of the constitutional prohibition,
as a like contract would be between two private citizens. Will it be contended,
that the legislature of a State can diminish the salary of a judge holding his
office during good behaviour? Such an authority has never yet been asserted to
our knowledge. It may also be admitted, that corporations for mere public
government, such as towns, cities and counties, may in many respects be subject
to legislative control. But [**234] it will hardly be contended,
that even in respect to such corporations, the legislative power is so transcendant,
that it may at its will take away the private property of the corporation, or
change the uses of its private funds acquired under the public faith.Can the
legislature confiscate to its own use the private funds which a municipal
corporation holds under its charter, without any default or consent of the
corporators? If a municipal corporation be capable of holding devises and
legacies to charitable uses (as many municipal corporations [*695]
are,) does the legislature, under our forms of limited government, possess the
authority to seize upon those funds, and appropriate them to other uses, at its
own arbitrary pleasure, against the will of the donors and donees? From the
very nature of our governments, the public faith is pledged the other way; and
that pledge constitutes a valid compact; and that compact is subject only to
judicial inquiry, construction, and abrogation. This Court have already had
occiasion, in other causes, to express their opinion on this subject; and the
there is not the slightest inclination to retract it. n111
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n111 Terret v. Taylor, 9 Cranch, 43. Town of Pawlet v. Clark, 9 Cranch, 292.
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[**235]
As to the case of the contract of marriage, which the argument supposes not to
be within the reach of the prohibitory clause, because it is matter of civil
institution, I profess not to feel the weight of the reason assigned for the
exception. In a legal sense, all contracts, recognized as valid in any country,
may be properly said to be matters of civil institution, since they obtain
their obligation and construction jure loci contractus. Titles to land,
constituting part of the public domain, acquired by grants under the provisions
of existing laws by private persons, are certainly contracts of civil
institution. Yet no one ever supposed, that when acquired bona fide, they were
not beyond the reach of legislative revocation. And so, certainly, is the
established doctrine of this Court. n112 A general law regulating divorces from
the contract of marriage, like a law regulating [*696] remedies in
other cases of breaches of contracts, is not necessarily a law impairing the
obligation of such a contract. n113 It may be the only effectual mode of
enforcing the obligations of the contract on both sides. A law punishing a
breach of a contract, by imposing a forfeiture of the rights
[**236] acquired under it, or dissolving it because the mutual
obligations were no longer observed, is in no correct sense a law impairing
[***674] the obligations of the contract. Could a law, compelling a
specific performance, by giving a new remedy, be justly deemed an excess of
legislative power? Thus far the contract of marriage has been considered with
reference to general laws regulating divorces upon breaches of that contract.
But if the argument means to assert, that the legislative power to dissolve
such a contract, without any breach on either side, against the wishes of the
parties, and without any judicial inquiry to ascertain a breach, I certainly am
not prepared to admit such a power, or that its exercise would not entrench
upon the prohibition of the constitution. If under the faith of existing laws a
contract of marriage be duly solemnized, or a marriage settlement be made, (and
marriage is always in law a valuable consideration for a contract,) it is not
easy to perceive why a dissolution of its obligations, without any default or
assent of the parties, may not as well fall within the prohibition, as any
other contract for a valuable consideration. A man has just as
[**237] good a right to his wife, as to the property acquired under
a marriage [*697] contract. He has a legal right to her society and
her fortune; and to devest such right without his default, and against his
will, would be as flagrant a violation of the principles of justice, as the
confiscation of his own estate. I leave this case, however, to be settled, when
it shall arise. I have gone into it, because it was urged with great
earnestness upon us, and required a reply. It is sufficient now to say, that as
at present advised, the argument, derived from this source, does not press my
mind with any new and insurmountable difficulty.
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n112 Ib.
n113 See Holmes v. Lansing, 3 Johns. Cas. 73.
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In respect also to grants and contracts, it would be far too narrow a
construction of the constitution, to limit the prohibitory clause to such only
where the parties take for their own private benefit. A grant to a private
trustee for the benefit of a particular cestui que trust, or for any special,
private or public charity, cannot be the less a contract because the trustee
takes nothing for his own benefit. A grant of the next presentation to a church
is still a contract, although it [**238] limit the grantee to a mere
right of nomination or partrongage. n114 The fallacy of the argument consists
in assuming the very ground in controversy. It is not admitted, that a contract
with a trustee is in its own nature revocable, whether it be for special or
general purposes, for public charity or particular beneficence. A private
donation, vested in a trustee for objects of a general nature, does not thereby
become a public trust, which the government may, at its pleasure, take from the
trustee, and administer [*698] in its own way. The truth is, that
the government has no power to revoke a grant, even of its own funds, whne
given to a private person, or a corporation for special uses. It cannot recal
its own endowments granted to any hospital, or college, or city, or town, for
the use of such corporations. The only authority remaining to the government is
judicial, to ascertain the validity of the grant, to enforce its proper uses,
to suppress frauds, and, if the uses are charitable, to secure their regular
administration through the means of equitable tribunals, in cases where there
would otherwise be a failure of justice.
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n114 2 Bl. Com. 21.
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Another objection [**239] growing out of, and connected with that
which we have been considering, is, that no grants are within the
constitutional prohibition, except such as respect property in the strict sense
of the term; that is to say, beneficial interests in lands, tenements, and
hereditaments, &c. &c. which may be sold by the grantees for their own
benefit: and that grants of franchises, immunities, and authorities not
valuable to the parties, as property, are excluded from its purview. No
authority has been cited to sustain this distinction, and no reason is
perceived to justify its adoption. There are many rights, franchises, and
authorities which are valuable in contemplation of law, where no beneficial
interest can accrue to the possessor. A grant of the next presentation to a
church, limited to the grantee alone, has been already mentioned. A power of
appointment, reserved in a marriage settlement, either to a party or a
stranger, to appoint uses in favour of third persons, without compensation, is
another instance. [*699] A grant of lands to a trustee to raise
portions or pay debts, is, in law, a valuable grant, and conveys a legal
estate. Even a power given by will to executors to sell [**240] an
estate for payment of debts is, by the better opinions and authority, coupled
with a trust, and capable of survivorship. n115 Many dignities and offices,
existing at common law, are merely honorary, and without profit, and sometimes
are onerous. Yet a grant of them has never been supposed the less a contract on
that account. In respect to franchises, whether corporate or-not, which include
a pernancy of profits, such as a right of fishery, or to hold a ferry, a
market, or a fair, or to erect a turnpike, bank, or bridge, there is no
pretence to say that grants of them are not within the constitution.Yet they
may, in point of fact, be of no exchangeable value to the owners. They may be
worthless in the market. The truth, however, is, that all incorporeal
hereditaments, whether they be immunities, dignities, offices, or franchises,
or other rights, are deemed valuable in law. The owners have a legal estate and
property in them, and legal remedies to support and recover them, is case of
any injury, obstruction or disseizin of them. Whenever they are the subjects of
a contract or grant, they are just as much within the reach of the constitution
as any other grant. [*700] [**241] Nor is there any
solid reason why a contract for the exercise of a mere authority should not be
just as much guarded as a contract for the use and dominion of property. Mere
naked powers, which are to be exercised for the exclusive benefit of the
grantor, are revocable by him for that very reason. But it is otherwise where a
power is to be exercised in aid of a right vested in the grantee. We all know
that a power of attorney, forming a part of a security upon the assignment of a
chose in action, is not revocable by the grantor. For it then
[***675] sounds in contract, and is coupled with an interest. n116
So if an estate be conveyed in trust for the grantor, the estate is irrevocable
in the grantee, although he can take no beneficial interest for himself. Many
of the best settled estates stand upon conveyances of this nature; and there
can be no doubt that such grants are contracts within the prohibition in
question.
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n115 Co. Lit. 113. a. Harg. and Butler's note 2. Sugden on Powers, 140. Jackson
v. Jansen, 6 Johns. Rep. 73. Franklin v. Osgood, 2 Johns. Cas. 1. S.C. 14
Johns. Rep. 527. Zebach v. Smith, 3 Binn. Rep. 69. Lessee of Moody v. Vandyke,
4 Binn. 7. 31. Attorney General v. Gleg, 1 Atk. 356. 1 Bac. Abr. 586. (Gwillim
edit.)
n116 Walsh v. Whitcomb, 2 Esp. 565. Bergen v. Bennett, 1 Caines' Cases in
Error, 1. 15. Raymond v. Squire, 11 Johns. Rep. 47.
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[**242]
In respect to corporate franchises, they are, properly speaking, legal estates
vested in the corporation itself as soon as it is in esse. They are not mere
naked powers granted to the corporation; but powers coupled with an interest.
The property of the corporation vests upon the possession of its franchises;
and whatever may be thought as to the corporators, it cannot be denied, that
the corporation itself has a legal interest in them. It may sue and be sued for
them. Nay, more, this very right is one of its ordinary [*701]
franchises. "It is likewise a franchise," says Mr. Justice
Blackstone, "for a number of persons to be incorporated and subsist as a
body politic, with power to maintain perpetual succession, and do other
corporate acts; and each individual member of such corporation is also said to
have a franchise or freedom." n117 In order to get rid of the legal
difficulty of these franchises being considered as valuable hereditaments or
property, the counsel for the defendant are driven to contend, that the
corporators or trustees are mere agents of the corporation, in whom no
beneficial interest subsists; and so nothing but a naked power is touched by
removing them [**243] from the trust; and then to hold the
corporation itself a mere ideal being, capable indeed of holding property or
franchises, but having no interest in them which can be the subject of
contract. Neither of these positions is admissible. The former has been already
sufficiently considered, and the latter may be disposed of in a few words. The
corporators are not mere agents, but have vested rights in their character, as
corporators. The right to be a freeman of a corporation is a valuable temporal
right. It is a right of voting and acting in the corporate concerns, which the
law recognizes and enforces, and for a violation of which it provides a remedy.
It is founded on the same basis as the right of voting in public elections; it
is as sacred a right; and whatever might have been the prevalence of former
doubts, since the time of Lord Holt, such a right has always been deemed a
valuable franchise or privilege. n118
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n117 2 Bl. Com. 37. 1 Kyd on Corp. 14. 16.
n118 Ashby v. White, 2 Ld. Raym. 938. 1 Kyd on Corp. 16.
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[*702] This reasoning, which has been thus far urged, applis with
full force to the case of Dartmouth College. The franchises granted by the
charter were [**244] vested in the trustees in their corporate
character. The lands and other property, subsequently acquired, were held by
them in the same manner. They were the private demenses of the corporation,
held by it, not, as the argument supposes, for the use and benefit of the
people of New-Hampshire, but, as the charter itself declares, "for the use
of Dartmouth College." There were not, and in the nature of things could
not be, any other cestui que use entitled to claim those funds. They were
indeed to be devoted to the promotion of piety and learning, not at large, but
in that college, and the establishments connected with it; and the mode in
which the charity was to be applied, and the objects of it, were left solely to
the trustees, who were the legal governors and administrators of it. No
particular person in New-Hampshire possessed a vested right in the bounty; nor
could he force himself upon the trustees as a proper object. The legislature
itself could not deprive the trustees of the corporate funds, or annul their
discretion in the application of them, or distribute them among its own
favourites. Could the legislature of New-Hampshire have seized the land given
by the State of [**245] Vermont to the corporation, and
appropriated it to uses distinct from those intended by the charity, against
the will of the trustees? This question cannot be answered in the affirmative,
until it is established, that the legislature may lawfully take the property of
A, and give it to B.; and if it [*703] could not take away or
restrain the corporate funds, upon what pretence can it take away or restrain
the corporate franchises? Without the franchises, the funds could not be used
for corporate purposes; but without the funds, the possession of the franchises
might still be of inestimable value to the college and to the cause of religion
and learning.
Thus far, the rights of the corporation itself, in respect to its property and
franchises, have been more immediately considered. But there are other rights
and privileges belonging to the trustees collectively, and severally, which are
deserving of notice. They are entrusted with the exclusive power to manage the
funds, to choose the officers, and to regulate the corporate concerns,
according to their own discretion. The jus patronatus is vested in them. The
visitatorial power, in its most enlarged extent, also belongs to
[**246] them. When this power devolves upon the founder of a
charity, it is an hereditament, descendible in perpetuity to his heirs, and in
default of heirs, it escheats to the government. n119 It is a valuable right
founded in property, as much so as the right of patronage in any other case. It
is a right which partakes of a judicial nature. May not the founder as justly
contract for the possession of this right in return for his endowment, as for
any other equivalent? and, if instead of holding it as an hereditament, he
assigns it in perpetuity to the trustees of the corporation, is it less a
valuable hereditament in their hands? The right is not merely a collective
right in all the trustees; [*704] each of them also has a franchise
in it. Lord Holt says, "it is agreeable to reason, and the rules of law,
that a franchise should be vested in the corporation aggregate, and yet the
benefit redound to the particular members, and be enjoyed by them in their private
capacities. Where the privilege of election is used by particular persons, it
is a particular right vested in each particular man." n120 Each of the
trustees had a right to vote in all elections. If obstructed in the exercise
[**247] of it, the law furnished him with an adequate recompense in
[***676] damages. If ousted unlawfully from his office, the law
would, by a mandamus, compel a restoration.
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n119 Rex v. St. Catherine's Hall, 4 T.R. 233.
n120 Ashby v. White, 2 Ld. Raym. 938. 952. Attorney General v. Dixie, 13 Ves.
519.
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It is attempted, however, to establish, that the trustees have no interest in
the corporate franchises, because it is said, that they may be witnesses in a
suit brought agaisnt the corporation. The case cited at the bar certainly goes
the length of asserting, that in a suit brought agaisnt a charitable corporation
for a recompence for services performed for the corporation, the governors,
constituting the corporation, (but whether entrusted with its funds or not by
the act of incorporation does not appear) are competent witnesses against the
plaintiff. n121 But assuming this case to have been rightly decided, (as to
which upon the authorities there may be room to doubt,) the corporators
[*705] being technically parties to the record, n122 it does not
establish, that in a suit for the corporate property vested in the trustees in
their corporate capacity, the trustees are competent [**248]
witnesses. At all events, it does not establish, that in a suit for the
corporate franchises to be exercised by the trustees, or to enforce their
visitatorial power, the trustees would be competent witnesses. On a mandamus to
restore a trustee to his corporate or visitatorial power, it will not be
contended, that the trustee is himself a competent witness to establish his own
rights, or the corporate rights. Yet why not, if the law deems that a trustee
has no interest in the franchise? The test of interest assumed in the argument
proves nothing in this case. It is not enough to establish, that the trustees
are sometimes competent witnesses; it is necessary to show, that they are always
so in respect to the corporate franchises, and their own. It will not be
pretended, that in a suit for demages for obstruction in the exercise of his
official powers, a trustee is a disinterested witness. Such an obstruction is
not a damnum absque injuria. Each trustee has a vested right, and legal
interest in his office, and it cannot be devested but by due course of law. The
illustration, therefore, lends no new force to the argument, for it does not
establish, that when their own rights [*706] [**249]
are in controversy, the trustees have no legal interest in their offices.
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n121 Weller v. The Governor of the Foundling Hospital, Peake's N.P. Rep. 153.
n122 Attorney General v. City of London, &c. 3 Bro. Ch. c. 171. S.C. 1 Ves.
jun. 243. Burton v. Hinde, 5 T.R. 174. Nason v. Thatcher, 7 Mass. R. 398.
Phillips on Evid. 42. 52. 57. and notes. 1 Kyd on Corp. 304. &c. Highmore
on Mortm. 514.
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The principal objections having been thus answered satisfactorily, at least to
my own mind, it remains only to declare, that my opinion, after the most mature
deliberation is, that the charter of Dartmouth College, granted, in 1769, is a
contract within the purview of the constitutional prohibition.
I might now proceed to the discussion of the second question; but it is
necessary previously to dispose of a doctrine which has been very seriously urged
at the bar, viz. that the charter of Dartmouth College was dissolved at the
revolution, and is, therefore, a mere nullity. A case before Lord Thurlow has
been cited in support of this doctrine. n123 The principal question in that
case was, whether the corporation of William & Mary's College in Virginia,
(which had received its charter from [**250] King William, and
Queen Mary,) should still be permitted to administer the charity under Mr.
Boyle's will, no interest having passed to the college under the will, but it
acting as an agent or trustee under a decree in chancery, or whether a new
scheme for the administration of the charity should be laid before the Court.
Lord Thurlow directed a new scheme, because the college belonging to an
independent government, was no longer within the reach of the Court. And he
very unnecessarily added, that he could not now consider the college as a
corporation, or as another report n124 states, [*707] that he could
not take notice of it as a corporation, it not having proved its existence as a
corporation at all. If, by this, Lord Thurlow meant to declare, that all
charters acquired in Amierca from the crown, were destroyed by the revolution,
his doctrine is not law; and if it had been true, it would equally apply to all
other grants from the crown, which would be monstrous. It is a principle of the
common law, which has been recognized as well in this, as in other Courts, that
the division of an empire, works no forfeiture of previously vested rights of
property. And this maxim is [**251] equally consonant with the
common sense of mankind, and the maxims of eternal justice. n125 This
objection, therefore, may be safely dismissed without further comment.
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n123 Attorney General v. City of London, 3 Bro. Ch. C. 171. S.C.1 Ves. jun.
243.
n124 1 Ves. jun. 243.
n125 Terrett v. Taylor, 9 Cranch, 43. 50. Kelly v. Harrison, 2 Johns. Cas. 29.
Jackson v. Lunn, 3 Johns. Cas. 109. Calvin's case, 7 Co. 27.
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The remaining inquiry is, whether the acts of the legislature of New-Hampshire
now in question, or any of them, impair the obligations of the charter of Drtmouth
College. The attempt certainly is to force upon the corporation a new charter
against the will of the corporators. Nothing seems better settled at the common
law, than the doctrine, that the crown cannot force upon a private corporation
a new charter; or compel the old members to give-up their own franchises, or to
admit new members into the corporation. n126 Neither can the crown compel a man
[*708] to become a member of such corporation against his will.
n127 As little has it been supposed, that under our limited governments, the
legislature possessed such transcendant authority. On one occasion, a very
[**252] able Court held, that the State legislature had no
authority to compel a person to become a member of a mere private corporation
created for the promotion of a private enterprise, because every man had a
right to refuse a grant. n128 On another occasion, the same learned Court
declared, that they were all satisfied, that the rights legally vested in a
corporation, cannot be controled or destroyed by any subsequent statute, unless
a power for that purpose be reserved to the legislature in the act of
incorporation. n129 These principles are so consonant with justice, sould
policy, and legal reasoning, that it is difficult to resist the impression of
their perfect [***677] correctness. The application of them,
however, does not, from our limited authority, properly belong to the appellate
jurisdiction of this Court in this case.
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n126 Rex v. Vice Chancellor of Cambridge, 3 Bur. 1656. Rex v. Passmore, 3 T.R.
240. 1 Kyd on Corp. 65. Rex v. Larwood, Comb. 316.
n127 Rex. v. Dr. Askew, 4 Bur. 2200.
n128 Ellis v. Marshall, 2 Mass. Rep. 269.
n129 Wales v. Stetson, 2 Mass. Rep. 143. 146.
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A very summary examination of the acts of New-Hampshire will abundantly show,
that in many materal [**253] respects they change the charter of
Dartmouth College. The act of the 27th of June, 1816, declares that the
corporation known by the name of the Trustees of Dartmouth College shall be
called the Trustees of Dartmouth University. That the whole number of trustees
shall be twenty-one, a majority [*709] of whom shall form a quorum;
that they and their successors shall hold, use, and enjoy forever, all the
powers, authorities, rights, property, liberties, privileges, and immunities,
heretofore held, &c. by the trustees of Dartmouth College, except where the
act other wise provides; that they shall also have power to determine the times
and places of their meetings and manner of notifying the same; to organize
colleges in the university; to establish an institute, and elect fellows and
members thereof; to appoint and displace officers, and determine their duties
and compensation; to delegate the power of supplying vacancies in any of the
offices of the university for a limited term; to pass ordinances for the
government of the students; to prescribe the course of education; and to
arrange, invest, and employ the funds of the university. The act then provides
for the appointment [**254] of a board of twenty-five overseers,
fifteen of whom shall form a quorum, of whom five are to be such ex officio,
and the residue of the overseers, as well as the new trustees, are to be
appointed by the governor and council. The board of overseers are, among other
things, to have power, "to inspect and confirm, or disapprove and
negative, such votes and proveedings of the board of trustees as shall relate
to the appointment and removal of president, professors and other permanent
officers of the university, and determine their salaries; to the establishment
of colleges and professorships, and the erection of new college
buildings." The act then provides, that the president and professors shall
be nominated by the trustees, and appointed by the overseers,
[*710] and shall be liable to be suspended and removed in the same
manner; and that each of the two boards of trustees and overseers shall have
power to suspend and remove any member of their respective boards. The
supplementary act of the 18th of December, 1816, declares that nine trustees
shall form a quorum, and that six votes at least shall be necessary for the
passage of any act or resolution. The act of the 26th of December,
[**255] 1816, contains other provisions, not very material to the
question before us.
From this short analysis it is apparent, that, in substance, a new corporation
is created including the old corporators, with new powers, and subject to a new
control; or that the old corporation is newly organized and enlarged, and
placed under an authority hitherto unknown to it. The board of trustees are
increased from twelve to twenty-one. The college becomes a university. The
property vested in the old trustees is transferred to the new board of trustees
in their corporate capacities. The quorum is no longer seven, but nine. The old
trustees have no longer the sole right to perpetuate their succession by
electing other trustes, but the nine new trustees are in the first instance to
be appointed by the governor and council, and the new board are then to elect
other trustees from time to time as vacancies occur. The new board, too, have
the power to suspend or remove any member, so that a minority of the old board,
co-operating with the new trustees, possess the unlimited power to remove the
majority of the old board. The powers, too, of the corporation are varied. It
has authority to organize [**256] new colleges in
[*711] "the university, and to establish an institute, and
elect fellows and members thereof." A board of overseers is created, (a
board utterly unknown to the old charter,) and is invested with a general supervision
and negative upon all the most important acts and proceedings of the trustees.
And to give complete effect to this new authority, instead of the right to
appoint, the trustees are in future only to nominate, and the overseers are to
approve, the president and professors of the university.
If these are not essential changes, impairing the rights and authorities of the
trustees, and vitally affecting the interests and organization of Dartmouth
College under its old charter, it is difficult to conceive what acts, short of
an unconditional repeal of the charter, could have that effect. If a grant of
land or franchises be made to A., in trust for special purposes, can the grant
be revoked, and a new grant thereof be made to A., B., and C., in trust for the
same purposes, without violating the obligation of the first grant? If property
be vested by grant in A. and B., for the use of a college, or a hospital, of
private foundation, is not the obligation [**257] of that grant
impaired when the estate is taken from their exclusive management, and vested
in them in common with ten other persons? If a power of appointment be given to
A. and B., is it no violation of their right to annul the appointment, unless
it be assented to by five other persons, and then confirmed by a distinct body?
If a bank, or insurance company, by the terms of its charter, be under the
management of directors, elected by the stockholders, would not the
[*712] rights acquired by the charter be impaired if the
legislature should take the right of election from the stockholders, and
appoint directors unconnected with the corporation? These questions carry their
own answers along with them. The common sense of mankind will teach us, that
all these cases would be direct infringements of the legal obligations of the
grants to which they refer; and yet they are, with no essential distinction,
the same as the case now at the bar.
In my judgment it is perfectly clear, that any act of a legislature which takes
away any powers or franchises vested by its charter in a private corporation or
its corporate officers, or which restrains or controls the legitimate exercise
[**258] of them, or transfers them to other persons, without its
assent, is a violation of the obligations of that charter. If the legislature
mean to claim such an authority, it must be reserved in the grant. The charter
of Dartmouth College contains no such reservation; and I am, therefore, bound
to declare, that the [***678] acts of the legislature of
New-Hampshire, now in question, do impair the obligations of that charter, and
are, consequently, unconstitutional and void.
In pronouncing this judgment, it has not for one moment escaped me how
delicate, difficult, and ungracious is the task devolved upon us. The
predicament in which this Court stands in relation to the nation at large, is
full of perplexities and embarrassments. It is called to decide on causes
between citizens of different States, between a State and its citizens, and
between different States. It stands, therefore, in the midst of [*713]
jealousies and rivalries of conflicting parties, with the most momentous
interests confided to its care. Under such circumstances, it never can have a
motive to do more than its duty; and, I trust, it will always be found to
possess firmness enough to do that.
Under these [**259] impressions I have pondered on the case before
us with the most anxious deliberation. I entertain great respect for the
legislature, whose acts are in question. I entertain no less respect for the
enlightened tribunal whose decision we are called upon to review. In the
examination, I have endeavoured to keep my steps super antiques vias of the
law, under the guidance of authority and principle. It is not for judges to
listen to the voice of persuasive eloquence or popular appeal. We have nothing
to do but to pronounce the law as we find it; and having done this, our
justification must be left to the impartial judgment of our country.
DISSENTBY: DUVALL
DISSENT: Mr. Justice DUVALL dissented. n130
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n130 In the discussions which arose in France in 1786, upon the new charter
then recently granted to the French East India Company, it seems to have been
taken for granted by the lawyers on both sides, to whom the questions in
controversy were submitted by the Company, and by the merchants who considered
themselves in jured by its establishment, that if the charter had regularly
issued according to the forms of the French law, it was irrevocable, unless
forfeited for non-user or misuser. The advocates, (M. M. LACRETELLE and
BLONDE,) who were consulted by the merchants of the kingdom opposed to the
establishment of the Company, denied its legal existence, on the ground that
the king had been surprised in his grant; that it was not yet perfected by the
issuing of letters patent, nor duly registered by the parliaments; and that it
both might and ought to be suppressed, as an illegal grant of exclusive
privileges, contrary to the true principles of commercial philosophy.
On the other hand it was contended by the Company that their grant was
irrevocable; that it was but a renewal and confirmation of the charter of the
old Company which had been suspended in 1769, in consequence of the immense
losses of capital sustained in the calamitous war of 1756, (but which
suspension was at the time solemnly protested against by the parliament of
Paris as illegal;) that their new grant might still be perfected by letters
patent, which the faith of the king was pledged to issue; and that the
privileges thus granted to them were irrevocably vested as a right of property,
of which they could not be deprived by any authority in the kingdom. "En
effect, quand le roi accorde un privilege exclusif, ce privilege est le prix
d'une mise de fonds, dans un commerce hazardeux, dont l'entreprise est jugee
avantageuse a l'etat. Dela nait par consequent un contrat synallagmatique, qui
se forme entre le souverain et les actionnaries. Dela nait un droit de
propriete qui devient inebranlable pour le sourverain lui-meme." And of
this opinion were the advocates (M. M. HARDOIN, GERBIER, and DE BONNIERES,)
consulted by the company. See a Collection of Tracts on the French East
Company, Paris, 1788, in the Library of Congress.
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[**260]
[*714] Upon the suggestion of the plaintiff's counsel, that the
defendant had died since the last term, the Court ordered the judgment to be
entered nunc pro tunc as of that term, as follows:
JUDGMENT. This cause came on to be heard on the transcript of the record, and
was argued by counsel. And thereupon all and singular the premises being seen,
and by the Court now here fully understood, and mature deliberation being thereupon
had, [*715] it appears to this Court, that the said acts of the
legislature of New-Hampshire, of the twenty-seventh of June and of the
eighteenth and twenty-sixth of December, Anno Domini, 1816, in the record
mentioned, are repugnant to the constitution of the United States, and so not
valid; and, therefore, that the said Superior Court of Judicature of the State
of New-Hampshire erred in rendering judgment on the said special verdict in
favour of the said plaintiffs; and that the said Court ought to have rendered
judgment thereon, that the said trustees recover against the said Woodward, the
amount of damages found and assessed, in and by the verdict aforesaid, viz. the
sum of twenty thousand dollars: Whereupon it is considered, ordered, and [**261]
adjudged by this Court, now here, that the aforesaid judgment of the said
Superior Court of Judicature of the State of New-Hampshire be, and the same
hereby is, reversed and annulled: And this Court proceeding to render such
judgment in the premises as the said Superior Court of Judicature ought to have
rendered, it is further considered by this Court, now here, that the said
trustees of Dartmough College do recover against the said William Woodward the
aforesaid sum of twenty thousand dollars, with costs of suit; and it is by this
Court, now here, further ordered, that a special mandate do go from this Court
to the said Superior Court of Judicature to carry this judgment into execution.