Dartmouth College v. Woodward: A Seized Seal and the Contracts Clause

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In 1769 King George III granted Dartmouth College a royal charter that defined its purpose, set up its board of trustees and endowed it with land. In 1816, after the trustees deposed the college president, the New Hampshire legislature passed a law to reinstate him and remake the school. It let the governor appoint positions, added state-selected trustees and created a state-controlled board of visitors with veto power over the original board, turning Dartmouth into a public institution. The state's side removed the college's book of records, its corporate seal and its corporate property. Legislators argued that the Revolution had transferred the Crown's authority to the state and that education was a public interest. The ousted trustees hired Dartmouth alumnus Daniel Webster to argue against William H. Woodward, secretary of the new state board.

Webster's argument before Chief Justice John Marshall was reportedly so moving it nearly brought Marshall to tears. On February 2, 1819, the Court ruled for the college, holding that the royal charter was a contract between private parties protected by the Contracts Clause of Article I, Section 10, and that the Revolution had not dissolved it. Coming after the 1810 case Fletcher v. Peck, the ruling drew a backlash. States responded by writing into new charters a reserved right to alter or revoke them, which courts accepted so long as changes were reasonable and did not harm the corporation's members. The added security for private charters helped the rise of the American business corporation.

• Marshall's majority opinion was among the longest sets of opinions in Supreme Court history to that point.
• Marshall distinguished property rights, covered by the Contracts Clause, from the political relations between a government and its citizens.
• In Fletcher v. Peck the Court protected land sales obtained through bribery of state legislators once third-party buyers were involved.
• Thomas Jefferson, writing to New Hampshire governor William Plumer, argued the world belongs to the living, not to the dead.
• The precedent applied to all private charters, including commercial enterprises such as bridges, canals and factories.