Dartmouth College v. Woodward
The Supreme Court ruled that New Hampshire's laws taking over Dartmouth College's governance violated the Constitution's ban on states impairing contracts, because the college's original charter was itself a contract the state could not unilaterally rewrite.
The decision meant that private charitable and educational corporations, once chartered, are shielded from later government takeover of their internal governance, a principle that became a foundation of American corporate law.
“The opinion of the court, after mature deliberation, is, that this is a contract, the obligation of which cannot be impaired, without violating the constitution of the United States.”
The Court's central holding that Dartmouth College's charter was a constitutionally protected contract.
How it got here: A New Hampshire state court ruled for the defendant, upholding the state's takeover laws; the trustees brought the case to the Supreme Court by writ of error.
The Case in Depth
What happened
In 1769, the Reverend Eleazar Wheelock obtained a royal charter creating Dartmouth College, governed by twelve self-perpetuating trustees, using funds donated by private benefactors in England and America. In 1816, New Hampshire's legislature passed laws renaming the school Dartmouth University, expanding the board of trustees, and creating a state-appointed board of overseers with power over the college's decisions. The college's original trustees refused to accept the changes and sued to recover the school's records and seal from the person holding them under the new laws.
The question before the Court
Could New Hampshire rewrite Dartmouth College's 1769 royal charter and hand control of the school to the state, without the trustees' consent?
Why it matters
The ruling protected private colleges, hospitals, and charities from having their governance seized by state legislatures after the fact. It gave founders and donors confidence that the terms under which they created and funded institutions would be honored, shaping how charitable and business corporations could be organized and trusted for generations afterward.
What changes now
The Supreme Court reversed the New Hampshire court's judgment and, rather than sending the case back for further proceedings, itself entered judgment for the original trustees, awarding them the $20,000 in damages found by the special verdict along with costs. The ruling was final on the merits, restoring the original trustees' exclusive control over Dartmouth College and establishing lasting protection for private charitable corporations against unilateral state alteration of their charters.
What this does not decide
The opinion does not hold that all corporations are immune from legislative change — the Court distinguished purely public corporations, like towns and cities created for government purposes, which remain subject to legislative control, from private charitable corporations like Dartmouth College, which are not.
Concurrences and dissents
Concurrence — Justice Washington
Justice Washington agreed the charter was a contract but reasoned it through English common-law corporation doctrine, distinguishing 'civil' corporations serving public government from 'private' eleemosynary corporations founded and endowed by private individuals. He concluded Dartmouth was clearly private, so New Hampshire's alterations, made without the trustees' consent, impaired the charter contract.
Concurrence — Justice Story
Justice Story wrote a lengthy separate opinion tracing common-law rules on eleemosynary corporations, founders, and visitatorial power, concluding independently that the charter was a contract supported by valuable consideration and that New Hampshire's changes to the trustees' and overseers' structure impaired that contract. He also rejected arguments that the charter was voided by the Revolution.
Concurrence — Justice Livingston
Justice Livingston concurred in the result, agreeing with the reasoning given separately by the Chief Justice, Justice Washington, and Justice Story, without adding independent analysis of his own.
Dissent — Justice Duvall
Justice Duvall dissented from the Court's judgment but did not author or publish a written opinion explaining his reasoning.
How the Court got there
The legal reasoning, step by step
- The Court first asked whether Dartmouth College's charter was a 'contract' under the constitutional clause barring states from impairing contract obligations, concluding that any charter granted on the faith of donated property, with mutual obligations between the parties, qualifies.
- The Court then examined whether the college was a private institution (whose funds and governance the donors controlled) or a public, civil institution created and controlled by government for public administrative purposes, since only the latter would fall outside constitutional protection.
- Because the college's funds came entirely from private donations and its trustees were chosen and empowered by the founder rather than by any government body, the Court classified it as a private eleemosynary (charitable) corporation, not a public one, even though it served a broad public purpose of education.
- The Court reasoned that the trustees, though lacking personal financial interest in the college's property, stood as legal representatives of the donors' original wishes, and so could assert the donors' contractual rights in court on their behalf.
- Applying this framework, the Court found that New Hampshire's 1816 laws fundamentally altered the college's chartered structure by adding state-appointed trustees and overseers and transferring governance authority away from the original board, without the trustees' consent.
- Because this change altered the terms the donors and the crown had originally agreed to, the Court concluded the New Hampshire laws impaired the obligation of the original charter-contract and were therefore unconstitutional.
Doctrinal impact
Cases affected by this decision
Reaffirms Fletcher v. Peck (6 Cranch 87)
Relies on this earlier ruling that a government grant is a contract protected from later legislative interference.
Reaffirms Terrett v. Taylor (9 Cranch 43)
Relies on this case's rule that legislatures cannot seize private corporate property without consent.