Dartmouth College V. Woodward
The case of Dartmouth College V. Woodward was a famous decision from the United States Supreme Court dealing with the Contract Clause of the United States Constitution to private corporations. The case arose when the president of Dartmouth College was dismissed by his trustees. This lead to the New Hampshire legislature’s attempt to force the college to become a public university and it placed the power to appoint trustees in the hands of the governor. The College's book of records, corporate seal, and other corporate property were removed. The trustees of the College objected and wanted the actions of the legislature to be declared unconstitutional. The trustees brought Dartmouth alumnus Daniel Webster. Webster argued the college's case against William H.Woodward, the state-approved secretary of the new board of trustees. Webster's speech in support of Dartmouth was so effective that it apparently helped convince Chief Justice John Marshall, and also reportedly bring tears to Webster's eyes.
The decision, handed down on February 2, 1819, ruled in favor of the College and invalidated the act of the New Hampshire Legislature, which in turn allowed Dartmouth to continue as a private institution and take back its buildings, seal, and charter. The Court ruled that the College's corporate charter qualified as a contract between private parties, the King and the trustees, with which the legislature could not bother. Even though the united States are no longer royal colonies, the contract was still used because the Constitution says that a state cannot pass laws to change contract. The fact that the government had commissioned the charter did not make the school into a civil institution. Chief Justice Marshall's opinion emphasized that the term "contract" referred to exchanges involving individual property rights, not to "the political relations between the government and its citizens. This decision created a much better business...
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