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Berea College v. Kentucky

Supreme Court of the United States · 1908 · Constitutional Law

Constitutional LawFourteenth AmendmentState power over corporationsSeverabilityreserved power to amend charterstate-created corporationsseverabilitynon-Federal ground

Facts

Berea College was a corporation organized under Kentucky law. Kentucky enacted a statute forbidding any person, corporation, or association to maintain or operate a school or college where white and Black persons were both received as pupils for instruction. The Kentucky Court of Appeals construed the statute to allow the races to be taught separately by time or place and also treated the statute as separable. Berea College was convicted under the statute, and the case reached the Supreme Court on the question whether the statute, as applied to the corporation, conflicted with the Federal Constitution.

Issue

Whether Kentucky's statute forbidding the joint instruction of white and Black students violated the Federal Constitution as applied to Berea College, a corporation created by Kentucky. More specifically, could the statute be sustained against the corporation on the ground that the State could limit or amend the powers of its own corporate creature even if broader applications of the statute were not considered?

Rule

A State's determination of the powers and limitations of a corporation it created is a local matter, and the State may withhold or qualify corporate powers even though similar restrictions could not necessarily be imposed on individuals. Where the legislature has reserved power to alter, amend, or repeal corporate charters, it may make changes that do not defeat or substantially impair the object of the grant or vested rights. If a statute is separable, a court may uphold it as applied to corporations without deciding its validity as to individuals or associations.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Blue Ridge Academy is a nonprofit college incorporated under North Carolina law. The incorporating statute reserves to the legislature the power to alter, amend, or repeal corporate charters. North Carolina later enacts a law providing that no state-chartered school may offer joint laboratory instruction to two designated student groups in the same room at the same time, but permits the same instruction if offered in separate sessions.

If Blue Ridge Academy argues that the law violates the Federal Constitution because private individuals could conduct the same joint instruction, how should a court rule under the majority's approach?

Explanation. The majority treated a state-created corporation as having only such powers as the state gives or leaves to it. Where the state reserves power to alter or amend charters, it may qualify corporate authority even if similar restrictions on individuals might raise different constitutional issues. Because the law still allows instruction if separated by time or place, it can operate as a permissible limitation on the corporation's powers rather than a destruction of the charter's object.