Dartmouth College v. Woodward (1819)

In Dartmouth College v. Woodward (1819) 17 U.S. 518, it was held that a charter granted to a private corporation was a contract. In that case, trustees and donors were granted standing to bring an action against the university to challenge a violation of its charter. However, the Dartmouth College case is distinguishable from the present case. The state passed an act that amended the university's charter, increasing the twelve person board to twenty one, and creating a board of overseers. Id., 626. The individuals bringing the suit were the original trustees, named by the founder in his will. Id., 641. The court found that the charter was "reorganized in such a manner as to convert a literary institution, moulded according to the will of its founders, and placed under the control of private literary men, into a machine entirely subservient to the will of the government." Id., 653. The plaintiffs in issue in Dartmouth College were found to have standing based on the states's seizure of control over a private corporation. Judge STORY denied the power of a legislature to dissolve even the marriage contract, without a breach on either side and against the wishes of the parties. He said, - "A dissolution of the marriage obligation, without any default or assent of the parties, may as well fall within the prohibition of the constitution as any other contract for a valuable consideration. A man has as good a right to his wife, as to the property acquired under a marriage contract; and to divest him of that right without his default, and against his will, would be as flagrant a violation of the principles of justice as the confiscation of his estate." In Dartmouth College v. Woodward, it was distinctly recognized that as respects grants of political or governmental authority to cities, towns, counties and the like the legislative power of the States is not restrained by the contract clause of the Constitution. Chief Justice MARSHALL said: "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." The English law controlling the right of visitation of private charitable institutions is tersely stated by Mr. Justice Washington in Dartmouth College v. Woodward, as follows: "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. The right of government and visitation arise 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." Chief Justice Marshall had occasion to state: "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." It was established in Dartmouth College v. Woodward that a charter from the State to a private corporation created a contract, and that the Constitution of the United States (Art. 1, 10, subd. 1), which forbids any State passing any law impairing the obligation of contracts, prevented a change by legislative enactment of the charter so issued.