Trustees of Dartmouth College v. Woodward
The Supreme Court ruled that New Hampshire could not rewrite Dartmouth College's founding charter to put the college under state control, because the original charter was a contract protected by the Constitution.
The decision meant that corporate charters, once granted, cannot be altered by state legislatures without the corporation's consent, a ruling that shaped how businesses, colleges, and other institutions could rely on their charters for the next two centuries.
“A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law.”
Marshall's description of what a corporation legally is, central to the Court's reasoning.
How it got here: The college's original trustees sued in New Hampshire's Superior Court for the college's records and seal; that court ruled the new state laws valid, and the trustees brought a writ of error to the Supreme Court.
The Case in Depth
What happened
Dartmouth College was founded through a 1769 royal charter obtained largely through the efforts of Reverend Eleazer Wheelock, who had run a charity school for Native American students. The charter created a self-perpetuating board of twelve trustees to govern the college using privately donated funds. In 1816, New Hampshire's legislature passed laws expanding the board, adding a state-appointed board of overseers, and effectively shifting control of the college to the state government.
The question before the Court
Could New Hampshire's legislature rewrite Dartmouth College's original charter, taking control away from its trustees, without their agreement?
The Court's answer
No — the Court ruled that New Hampshire could not rewrite Dartmouth College's charter without the trustees' consent, because the original 1769 charter was a contract protected by the Constitution's Contract Clause. The Court found that although the college served the public through education, its funds came from private donors and its governance structure was privately established, making it a private institution whose founding bargain the state could not unilaterally rewrite.
Because the charter was a valid contract, New Hampshire's 1816 laws — which added new trustees, created a state-controlled board of overseers, and shifted governing power to state appointees — impaired that contract's obligations by changing the terms the founders and donors had originally bargained for. The state court's judgment upholding those laws was therefore reversed.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Businesses, colleges, and other chartered institutions gained lasting protection from having their governing structures rewritten by state lawmakers after the fact. This gave founders and investors confidence that once a charter was granted, the state could not simply seize control or redirect the institution's property to new purposes without agreement.
What changes now
The Court reversed the New Hampshire court's judgment and entered its own final judgment for the original trustees, including damages, with a mandate directing the state court to carry the ruling into effect. This was a final decision on the merits, not a remand for further factfinding. The ruling established a lasting rule that state legislatures cannot unilaterally rewrite existing corporate charters, a principle that would govern chartered corporations, colleges, and other institutions going forward.
What this does not decide
The Court was careful to say it was not disturbing states' general power to regulate genuinely public institutions, like towns and cities, or ordinary civil matters such as marriage and divorce law. The ruling applies specifically to private charitable and corporate charters, not to institutions that are truly public creations of government for public purposes.
Concurrences and dissents
Concurrence — Justice Washington
Justice Washington agreed the charter was a contract and that New Hampshire's laws impaired it, but reasoned through English legal authorities on corporations rather than following the Chief Justice's analysis point for point. He distinguished sharply between purely public corporations, like towns, which legislatures may freely regulate, and private eleemosynary corporations like Dartmouth, which are not subject to legislative interference absent a reserved power.
Concurrence — Justice Story
Justice Story wrote a lengthy separate opinion tracing the common-law history of corporations, founders, and visitatorial power in great detail, concluding independently that the charter was a contract supported by valuable consideration and that the New Hampshire acts impaired it. He emphasized that private trustees and corporators hold legally protected interests in their offices and franchises, not merely naked, revocable powers.
Dissent — Justice Duvall
Justice Duvall dissented without providing a written opinion explaining his reasoning, so the specific grounds for his disagreement with the majority are not recorded in the text.
How the Court got there
The legal reasoning, step by step
- The Court first asked whether the original 1769 charter counted as a 'contract' under the Constitution's Contract Clause, which bars states from passing laws 'impairing the obligation of contracts.' The Court found that a charter granted in exchange for donated property, on the faith of which funds were conveyed, contains every element of a genuine contract.
- The Court then examined whether Dartmouth College was a private institution or effectively an arm of government. It concluded the college was a private, charitable ('eleemosynary') institution because its funds came entirely from private donations and its purpose was set by private founders, not by the government, even though it served the broader public through education.
- Because the college was private, the Court reasoned that the trustees stood in the place of the original donors and founder, representing their intentions and preserving the arrangement the donors had bargained for, even though no living donor or student had a personal financial stake to assert in court.
- The Court held that the corporate charter itself was a contract between the Crown (whose obligations New Hampshire inherited) and the donors/trustees, and that this contract survived the Revolution unchanged because the transfer of sovereignty did not erase existing property rights and obligations.
- Applying this framework, the Court found that New Hampshire's 1816 laws, which expanded the board, added a state-controlled board of overseers, and shifted governance to state appointees, fundamentally altered the terms the founders had bargained for without the trustees' consent, and therefore impaired the obligation of the original charter-contract.
Doctrinal impact
Cases affected by this decision
Reaffirms Fletcher v. Peck
The Court relied on this earlier ruling's definition of a contract to hold that a government grant counts as a contract.
Reaffirms Terrett v. Taylor (9 Cranch, 43)
The Court relied on this case's distinction between public and private corporations to support limiting legislative control over private charities.