1.2.2. New England (1787-1833): The Dartmouth College Case


Trustees of Dartmouth College v. Woodward – New Hampshire, 1817 (1 N.H. 111), reversed, 17 U.S. 518 (1819)

  • The Dartmouth College case started as an intramural battle between New Hampshire Democrats and Federalists, but it morphed into a battle over the extent to which state legislatures could regulate corporations.  
  • New Hampshire’s colonial legislature chartered Dartmouth College in 1770.  The college soon became New Hampshire’s premier institution of learning, accumulated substantial property, and remained a bastion of Federalist sentiment in an increasingly Democratic state.  In 1816, at the instigation of Gov. William Plumer, the legislature amended Dartmouth’s charter, enlarging the board of trustees and allowing the governor to “pack” the board with new appointees who, it was expected, would side with him in his fight with college President John Wheelock over control of the college’s affairs.
  • The old trustees challenged this move.  New Hampshire’s supreme court, which was dominated by recently-appointed Plumer allies, sided with Plumer and the legislature, holding that because the college served a public function and had been created by the state, the state could change its charter at will.
  • Dartmouth College appealed to the U.S. Supreme Court and prevailed.  Chief Justice John Marshall viewed Dartmouth’s original charter as a private contract more than a state charter.  He held that because the charter was a contract, it could not be changed without Dartmouth’s consent. 
  • Dartmouth College was one of the most important American judicial decisions of the early 19th century, but its practical effect was limited.  New Hampshire responded to the decision by enacting an “anti-Dartmouth law” providing that in future, all corporate charters would be issued subject to the state’s right to amend them at any time – for example, by enacting regulatory laws.  States throughout New England and the rest of the United States soon enacted similar laws, which were universally upheld by the courts. 

 

Anti-Dartmouth Laws Passed

Maine

 

New Hampshire

 

Vermont

 

Massachusetts

1831

Rhode Island

1844

Connecticut

 


Dartmouth College (1793) - courtesy Wikimedia Commons


New Hampshire Gov. William Plumer

“[The constitutional prohibition against impairment of contracts] must not be construed to embrace contracts, which are in their nature, mere matters of civil institution; nor grants of power and authority, by a state to indivs, to be exercised for purposes merely public. …

“[M]ake the trustees independent, and they will ultimately forget that their office is a public trust … will overlook the great purposes for which their powers were originally given, and will exercise them only to gratify their own private views and wishes, or to promote the narrow purposes of a sect or a party.” – New Hampshire Justice ___, in Dartmouth College