Trustees of Dartmouth College v. Woodward

Superior Court of Judicature of New Hampshire · 1819 · Constitutional Law

Constitutional LawCorporationspublic corporationprivate corporationcorporate charterlegislative controlContract Clauselaw of the land

Facts

The parties agreed that Dartmouth College was incorporated under a 1769 charter and that the disputed articles had belonged to that corporation. In 1816, New Hampshire enacted statutes changing the name to Dartmouth University and expanding the trustees from twelve to twenty-one, with the governor and council empowered to appoint additional trustees. The governor and council appointed nine new trustees, and at a duly held meeting composed of two old trustees and the nine new trustees, the defendant was appointed treasurer and secretary and received the articles as university property. Nine old trustees rejected the statutes, claimed to remain the original corporation under the 1769 charter, and brought this action to recover the property.

Issue

Did the legislature have a constitutional right to authorize the appointment of new trustees to Dartmouth College without the corporation's consent? More specifically, did those acts unconstitutionally infringe private rights or impair a contract protected by the state or federal constitution?

Rule

A corporation is public when it is created for public purposes and its property and franchises are devoted to those purposes so that corporators have no private beneficial interest beyond the right to hold office; such a corporation is subject to legislative regulation and reorganization. Statutes affecting such public interests are the "law of the land" unless repugnant to some other constitutional provision, and a charter granting power to manage a public institution is not a contract within the meaning of the federal Contract Clause. Adding new members to a corporation does not itself dissolve the old corporation, create a new one, or transfer legal title to corporate property.

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

The Ohio legislature chartered Lake Erie Academy in Cleveland to hold donations and operate a school "for the education of youth throughout northern Ohio." The charter names 14 trustees, but gives them no shares, dividends, or right to distribute the institution's assets to themselves.

If the legislature later adds six state-appointed trustees and the original trustees challenge the statute, which is the strongest argument for upholding the law under the majority opinion?

Explanation. The majority classifies corporations by the objects for which their franchises are exercised and where the beneficial interest lies. A corporation created to hold and manage property for public educational purposes, where trustees have no transferable or personal beneficial interest beyond office, is public and subject to legislative reorganization. State funding is not required.