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Concept
Dartmouth College v. Woodward
Summary
Trustees of Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819), was a landmark decision in United States corporate law from the United States Supreme Court dealing with the application of the Contracts Clause of the United States Constitution to private corporations. The case arose when the president of Dartmouth College was deposed by its trustees, leading to the New Hampshire legislature attempting to force the college to become a public institution and thereby place the ability to appoint trustees in the hands of the governor of New Hampshire. The Supreme Court upheld the sanctity of the original charter of the college, which predated the creation of the State.
The decision settled the nature of public versus private charters and resulted in the rise of the American business corporation and the American free enterprise system.
In 1769, King George III of Great Britain granted a charter to Dartmouth College that spelled out the purpose of the school, set up the structure to govern it, and gave it land. In 1816, over 30 years after the conclusion of the American Revolution, the New Hampshire legislature altered Dartmouth's charter in order to reinstate the College's deposed president, place the ability to appoint positions in the hands of the governor, add new members to the board of trustees, and create a state board of visitors with veto power over trustee decisions. This effectively converted the school from a private to a public institution. The College's book of records, corporate seal, and other corporate property were removed. The trustees of the College objected and sought to have the actions of the legislature declared unconstitutional.
The trustees retained Dartmouth alumnus Daniel Webster, a New Hampshire lawyer who later became a U.S. Senator for Massachusetts and Secretary of State under President Millard Fillmore. Webster argued the college's case against William H. Woodward, the state-approved secretary of the new board of trustees.
Official source
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