The Dartmouth v. Woodward case was a case between Dartmouth College and Whitlock, who was suited for taking over the college and overstepping his legal abilities. Even though the state court sided with Whitlock, the Supreme Court reversed the decision. The case contributed to the establishment of prohibiting states from violating contracts with organizations.
The background of the case: Dartmouth College was founded in 1769 in New Jersey by Elizabeth Wheelock, and it is one of the oldest institutions of higher education. Elizabeth was a congregational minister, and gained authority to the board of trustees created by Wheelock, as she received a charter from the English Crown. However, Federalist trustees have been controlling the school, and it was receiving funds from the state sometimes. Federalist trustees were interested in the school due to their belief in its religious origin and mission.
The case took place in 1819 and involved contract issue. At that time, there was no clear distinguishment between the organizations ruled by the Federal governments, and ones governed by the state. In 1816, Democratic-Republicans attempted to turn the school into a secular organization. They modified the college’s charter by electing new trustees and elected Whitlock as a President. As original trustees remained at their position, they did not agree with the decision, stating that the State government was overstepping its legal authority as it did not have a right to interfere with the contract of the private institution.
The charter is a type of contract that allows leasing an object and outlines the rights and responsibilities of the institution. According to the charter, the Dartmouth was established a private higher institution. The original trustees suited Whitlock as he transferred to a new university and took college charter, seal, and records. They stated that Whitlock violated the U.S. Constitution contract clause. However, the court supported the Whitlock, indicating that the school is a public corporation. After losing the case in the state court, the original trustees hired a lawyer, Daniel Webster, who filed a claim to the U.S. Supreme court. The court reversed the decision with a 5-1 vote and ruled that New Hampshire violated the contract clause by creating a new board of trustees at Dartmouth College. The Supreme Court decided that the Constitution does not allow altering the obligations of a charter.
Ruling: John Marshall, the fourth Chief Justice of the United States, was the longest-serving chief in history, and he wrote the major opinion on the case. He states that New Hampshire violated the contract by electing new trustees; therefore, it opposed to the Constitution. Court concluded that the Contract Clause relates not only to the public but also to private organizations. Consequently, the Contract Clause does not allow states to violate public or private corporations. The concurring opinion was that states could keep certain powers for themselves in creating contracts; however, New Hampshire had not done so in this case. Individuals donated funds to the college, believing that they contribute to the college’s primary mission, and they tend to contribute when the government protects such entities.
Significance: The Supreme Court decision made an impact as Dartmouth College turned from a private college into a state university. Dartmouth College v. Woodward had a significant long-term impact on businesses and corporations, as it protected them from the excessive influence of the government.