Dartmouth College v. Woodward 4 Wheaton 518 (1819)

• Author: Leonard W. Levy
• Pages: 744-746

Page 744

The most famous and influential CONTRACT CLAUSE case in our history, Dartmouth College was a boon to higher education and to corporate capitalism. The case established the DOCTRINE, never overruled, that a CORPORATION charter or the grant by a state of corporate rights to private interests comes within the protection of the contract clause. Although the case involved a small college in New Hampshire rather than a manufacturing concern, a bank, or a transportation company, the Court seized an opportunity to broaden the contract clause by making all private corporations its beneficiaries. DANIEL WEBSTER, counsel for the college, said that the judgment was a "defense of VESTED RIGHTS against Courts and Sovereignties," and his co-counsel, Joseph Hopkinson, asserted that it would "secure corporations ? from legislative despotism.?" Corporations were still a recent innovation; JAMES KENT, inhis Commentaries on American Law (1826), remarked that their rapid multiplication and the avidity with which they were sought by charter from the states arose as a result of the power that large, consolidated capital gave them over business of every sort. The Court's decision in the Dartmouth College case, Kent said, more than any other act proceeding from the authority of the United States, threw "an impregnable barrier around all rights and franchises derived from the grant of government; and [gave] solidity and inviolability to the literary, charitable, religious, and commercial institutions of our country." Actually, FLETCHER V. PECK (1810) had made the crucial and original extension of the contract clause, construing it to cover public and executed contracts as well as private executory ones. The Dartmouth College doctrine was a logical implication.

The college case was a strange vehicle for the doctrine that emerged from it. Dartmouth, having been chartered in 1769 in the name of the crown to christianize and educate Indians, had become a Christian college for whites and a stronghold of the Congregationalist Church, which had benefited most from the laws establishing the Protestant religion in New Hampshire. The college had become embroiled in state politics on the side of the

Page 745

Federalists, who supported the establishment. When in 1815 the trustees removed the president of the college, they loosed a controversy that drew to the ousted president a coalition of Jeffersonians and religious denominations demanding...