The Life of John Marshall Volume IV Part 28

For whose benefit was the property of Dartmouth College given to that inst.i.tution? For the people at large, as counsel insist? Read the charter. Does it give the State "any exclusive right to the property of the college, any exclusive interest in the labors of the professors?"

Does it not rather "merely indicate a willingness that New Hamps.h.i.+re should enjoy those advantages which result to all from the establishment of a seminary of learning in the neighborhood? On this point we think it impossible to entertain a serious doubt." For the charter shows that, while the spread of education and religion was the object of the founders of the College, the "particular interests" of the State "never entered into the minds of the donors, never const.i.tuted a motive for their donation."[751]

It is plain, therefore, that every element of the problem shows "that Dartmouth College is an eleemosynary inst.i.tution, incorporated for the purpose of perpetuating ... the bounty of the donors, to the specified objects of that bounty"; that the Trustees are legally authorized to perpetuate themselves and that they are "not public officers"; that, in fine, Dartmouth College is a "seminary of education, incorporated for the preservation of its property, and the perpetual application of that property to the objects of its creation."[752]

There remains a question most doubtful of "all that have been discussed." Neither those who have given money or land to the College, nor students who have profited by those benefactions, "complain of the alteration made in its charter, or think themselves injured by it. The trustees alone complain, and the trustees have no beneficial interest to be protected." Can the charter "be such a contract as the const.i.tution intended to withdraw from the power of state legislation?"[753]

Wheelock and the other philanthropists who had endowed the College, both before and after the charter was granted, made their gifts "for something ... of inestimable value--... the perpetual application of the fund to its object, in the mode prescribed by themselves.... The corporation ... stands in their place, and distributes their bounty, as they would themselves have distributed it, had they been immortal." Also the rights of the students "collectively" are "to be exercised ... by the corporation."[754]

The British Parliament is omnipotent. Yet had it annulled the charter, even immediately after it had been granted and conveyances made to the corporation upon the faith of that charter, "so that the living donors would have witnessed the disappointment of their hopes, the perfidy of the transaction would have been universally acknowledged." Nevertheless, Parliament would have had the power to perpetrate such an outrage.

"Then, as now, the donors would have had no interest in the property; ... the students ... no rights to be violated; ... the trustees ... no private, individual, beneficial interest in the property confided to their protection." But, despite the legal power of Parliament to destroy it, "the contract would at that time have been deemed sacred by all."

"What has since occurred to strip it of its inviolability? Circ.u.mstances have not changed it. In reason, in justice, and in law, it is now what it was in 1769." The donors and Trustees, on the one hand, and the Crown on the other, were the original parties to the arrangement stated in the charter, which was "plainly a contract" between those parties. To the "rights and obligations" of the Crown under that contract, "New Hamps.h.i.+re succeeds."[755] Can such a contract be impaired by a State Legislature?

"It is a contract made on a valuable consideration.

"It is a contract for the security and disposition of property.

"It is a contract, on the faith of which real and personal estate has been conveyed to the corporation.

"It is then a contract within the letter of the const.i.tution, and within its spirit also, unless" the nature of the trust creates "a particular exception, taking this case out of the prohibition contained in the const.i.tution."

It is doubtless true that the "preservation of rights of this description was not particularly in the view of the framers of the const.i.tution when the clause under consideration was introduced into that instrument," and that legislative interferences with contractual obligations "of more frequent recurrence, to which the temptation was stronger, and of which the mischief was more extensive, const.i.tuted the great motive for imposing this restriction on the state legislatures.

"But although a particular and a rare case may not ... induce a rule, yet it must be governed by the rule, when established, unless some plain and strong reason for excluding it can be given. It is not enough to say that this particular case was not in the mind of the convention when the article was framed, nor of the American people when it was adopted. It is necessary to go farther, and to say that, had this particular case been suggested, the language [of the contract clause] would have been so varied as to exclude it, or it would have been made a special exception."[756]

Can the courts now make such an exception? "On what safe and intelligible ground can this exception stand?" Nothing in the language of the Const.i.tution; no "sentiment delivered by its contemporaneous expounders ... justify us in making it."

Does "the nature and reason of the case itself ... sustain a construction of the const.i.tution, not warranted by its words?" The contract clause was made a part of the Nation's fundamental law "to give stability to contracts." That clause in its "plain import" comprehends Dartmouth's charter. Does public policy demand a construction which will exclude it? The fate of all similar corporations is involved. "The law of this case is the law of all."[757] Is it so necessary that Legislatures shall "new-model" such charters "that the ordinary rules of construction must be disregarded in order to leave them exposed to legislative alteration?"

The importance attached by the American people to corporate charters like that of Dartmouth College is proved by "the interest which this case has excited." If the framers of the Const.i.tution respected science and literature so highly as to give the National Government exclusive power to protect inventors and writers by patents and copyrights, were those statesman "so regardless of contracts made for the advancement of literature as to intend to exclude them from provisions made for the security of ordinary contracts between man and man?"[758]

No man ever did or will found a college, "believing at the time that an act of incorporation const.i.tutes no security for the inst.i.tution; believing that it is immediately to be deemed a public inst.i.tution, whose funds are to be governed and applied, not by the will of the donor, but by the will of the legislature. All such gifts are made in the pleasing, perhaps delusive hope, that the charity will flow forever in the channel which the givers have marked out for it."

Since every man finds evidence of this truth "in his own bosom," can it be imagined that "the framers of our const.i.tution were strangers" to the same universal sentiment? Although "feeling the necessity ... of giving permanence and security to contracts," because of the "fluctuating" course and "repeated interferences" of Legislatures which resulted in the "most perplexing and injurious embarra.s.sments," did the framers of the Const.i.tution nevertheless deem it "necessary to leave these contracts subject to those interferences?" Strong, indeed, must be the motives for making such exceptions.[759]

Finally, Marshall declares that the "opinion of the court, after mature deliberation, is, that this is a contract, the obligation of which cannot be impaired without violating the Const.i.tution of the United States."[760]

Do the New Hamps.h.i.+re College Acts impair the obligations of Dartmouth's charter? That instrument gave the Trustees "the whole power of governing the college"; stipulated that the corporation "should continue forever"; and "that the number of trustees should forever consist of twelve, and no more." This contract was made by the Crown, a power which could have made "no violent alteration in its essential terms, without impairing its obligation."

The powers and duties of the Crown were, by the Revolution, "devolved on the people of New Hamps.h.i.+re." It follows that, since the Crown could not change the charter of Dartmouth without impairing the contract, neither can New Hamps.h.i.+re. "All contracts, and rights, respecting property, remained unchanged by the revolution."[761]

As to whether the New Hamps.h.i.+re College Acts radically alter the charter of Dartmouth College, "two opinions cannot be entertained." The State takes over the government of the inst.i.tution. "The will of the state is subst.i.tuted for the will of the donors, in every essential operation of the college.... The charter of 1769 exists no longer"--the College has been converted into "a machine entirely subservient to the will of government," instead of the "will of its founders."[762] Therefore, the New Hamps.h.i.+re College laws "are repugnant to the const.i.tution of the United States."[763]

On account of the death of Woodward, who had been Secretary and Treasurer of the University, and formerly held the same offices in the College against whom the College Trustees had brought suit, Webster moved for judgment _nunc pro tunc_; and judgment was immediately entered accordingly.

Not for an instant could Webster restrain the expression of his joy.

Before leaving the court-room he wrote his brother: "All is safe.... The opinion was delivered by the Chief Justice. It was very able and very elaborate; it goes the whole length, and leaves not an inch of ground for the University to stand on."[764] He informed President Brown that "all is safe and certain.... I feel a load removed from my shoulders much heavier than they have been accustomed to bear."[765] To Mason, Webster describes Marshall's manner: "The Chief Justice's opinion was in his own peculiar way. He reasoned along from step to step; and, not referring to the cases [cited], adopted the principles of them, and worked the whole into a close, connected, and very able argument."[766]

At the same time Hopkinson wrote Brown in a vein equally exuberant: "Our triumph ... has been complete. Five judges, only six attending, concur not only in a decision in our favor, but in placing it upon principles broad and deep, and which secure corporations of this description from legislative despotism and party violence for the future.... I would have an inscription over the door of your building, 'Founded by Eleazar Wheelock, Refounded by Daniel Webster.'"[767] The high-tempered Pinkney was vocally indignant. "He talked ... and bl.u.s.tered" ungenerously, wrote Webster, "because ... the party was in a fever and he must do something for his fees. As he could not talk _in_ court, he therefore talked _out_ of court."[768]

As we have seen, Marshall had prepared his opinion under his trees at Richmond and in the mountains during the vacation of 1818; and he had barely time to read it to his a.s.sociates before the opening of court at the session when it was delivered. But he afterward submitted the ma.n.u.script to Story, who made certain changes, although enthusiastically praising it. "I am much obliged," writes Marshall, "by the alterations you have made in the Dartmouth College case & am highly gratified by what you say respecting it."[769]

Story also delivered an opinion upholding the charter[770]--one of his ablest papers. It fairly bristles with citations of precedents and historical examples. The whole philosophy of corporations is expounded with clearness, power, and learning. Apparently Justice Livingston liked Story's opinion even more than that of Marshall. Story had sent it to Livingston, who, when returning the ma.n.u.script, wrote: It "has afforded me more pleasure than can easily be expressed. It was exactly what I had expected from you, and hope it will be adopted without alteration."[771]

At the time of the Dartmouth decision little attention was paid to it outside of New Hamps.h.i.+re and Ma.s.sachusetts.[772] The people, and even the bar, were too much occupied with bank troubles, insolvency, and the swiftly approaching slavery question, to bother about a small New Hamps.h.i.+re college. The profound effect of Marshall's opinion was first noted in the _North American Review_ a year after the Chief Justice delivered it. "Perhaps no judicial proceedings in this country ever involved more important consequences, ... than the case of Dartmouth College."[773]

Important, indeed, were the "consequences" of the Dartmouth decision.

Everywhere corporations were springing up in response to the necessity for larger and more constant business units and because of the convenience and profit of such organizations. Marshall's opinion was a tremendous stimulant to this natural economic tendency. It rea.s.sured investors in corporate securities and gave confidence and steadiness to the business world. It is undeniable and undenied that America could not have been developed so rapidly and solidly without the power which the law as announced by Marshall gave to industrial organization.

One result of his opinion was, for the period, of even higher value than the encouragement it gave to private enterprise and the steadiness it brought to business generally; it aligned on the side of Nationalism all powerful economic forces operating through corporate organization. A generation pa.s.sed before railway development began in America; but Marshall lived to see the first stage of the evolution of that mighty element in American commercial, industrial, and social life; and all of that force, except the part of it which was directly connected with and under the immediate influence of the slave power, was aggressively and most effectively Nationalist.

That this came to be the fact was due to Marshall's Dartmouth opinion more than to any other single cause. The same was true of other industrial corporate organizations. John Fiske does not greatly exaggerate in his a.s.sertion that the law as to corporate franchises declared by Marshall, in subjecting to the National Const.i.tution every charter granted by a State "went farther, perhaps, than any other in our history toward limiting State sovereignty and extending the Federal jurisdiction."[774]

Sir Henry Sumner Maine has some ground for his rather dogmatic statement that the principle of Marshall's opinion "is the basis of credit of many of the great American Railway Incorporations," and "has ... secured full play to the economical forces by which the achievement of cultivating the soil of the North American Continent has been performed." Marshall's statesmans.h.i.+p is, a.s.serts Maine, "the bulwark of American individualism against democratic impatience and Socialistic fantasy."[775] Such views of the Dartmouth decision are remarkably similar to those which Story himself expressed soon after it was rendered. Writing to Chancellor Kent Story says: "Unless I am very much mistaken the principles on which that decision rests will be found to apply with an extensive reach to all the great concerns of the people, and will check any undue encroachments upon civil rights, which the pa.s.sions or the popular doctrines of the day may stimulate our State Legislatures to adopt."[776]

The court's decision, however, made corporate franchises infinitely more valuable and strengthened the motives for procuring them, even by corruption. In this wise tremendous frauds have been perpetrated upon negligent, careless, and indifferent publics; and "enormous and threatening powers," selfish and non-public in their purposes and methods, have been created.[777] But Marshall's opinion put the public on its guard. Almost immediately the States enacted laws reserving to the Legislature the right to alter or repeal corporate charters; and the const.i.tutions of several States now include this limitation on corporate franchises. Yet these reservations did not, as a practical matter, nullify or overthrow Marshall's philosophy of the sacredness of contracts.

Within the last half-century the tendency has been strongly away from the doctrine of the Dartmouth decision, and this tendency has steadily become more powerful. The necessity of modifying and even abrogating legislative grants, more freely than is secured by the reservation to do so contained in State const.i.tutions and corporate charters, has further restricted the Dartmouth decision. It is this necessity that has produced the rapid development of "that well-known but undefined power called the police power,"[778] under which laws may be pa.s.sed and executed, in disregard of what Marshall would have called contracts, provided such laws are necessary for the protection or preservation of life, health, property, morals, or order. The modern doctrine is that "the Legislature cannot, by any contract, divest itself of the power to provide for these objects.... They are to be attained and provided for by such appropriate means as the legislative discretion may devise. That discretion can no more be bargained away than the power itself."[779]

Aside from the stability which this p.r.o.nouncement of the Chief Justice gave to commercial transactions in general, and the confidence it inspired throughout the business world, the largest permanent benefit of it to the American people was to teach them that faith once plighted, whether in private contracts or public grants, must not and cannot be broken by State legislation; that, by the fundamental law which they themselves established for their own government, they as political ent.i.ties are forbidden to break their contracts by enacting statutes, just as, by the very spirit of the law, private persons are forbidden to break their contracts. If it be said that their representatives may betray the people, the plain answer is that the people must learn to elect honest agents.

For exactly a century Marshall's Dartmouth opinion has been a.s.sailed and the Supreme Court itself has often found ways to avoid its conclusions. But the theory of the Chief Justice has shown amazing vitality. Sixty years after Marshall delivered it, Chief Justice Waite declared that the principles it announced are so "imbedded in the jurisprudence of the United States as to make them to all intents and purposes a part of the Const.i.tution itself."[780] Thirty-one years after Marshall died, Justice Davis avowed that "a departure from it [Marshall's doctrine] _now_ would involve dangers to society that cannot be foreseen, would shock the sense of justice of the country, unhinge its business interests, and weaken, if not destroy, that respect which has always been felt for the judicial department of the Government."[781] As late as 1895, Justice Brown a.s.serted that it has "become firmly established as a canon of American jurisprudence."[782]

It was a principle which Marshall introduced into American Const.i.tutional law, and, fortunately for the country, that principle still stands; but to-day the courts, when construing a law said to impair the obligation of contracts, most properly require that it be established that the unmistakable purpose of the Legislature is to make an actual contract for a sufficient consideration.[783]

It is highly probable that in the present state of the country's development, the Supreme Court would not decide that the contract clause so broadly protects corporate franchises as Marshall held a century ago.

In considering the Dartmouth decision, however, the state of things existing when it was rendered must be taken into account. It is certain that Marshall was right in his interpretation of corporation law as it existed in 1819; right in the practical result of his opinion in that particular case; and, above all, right in the purpose and effect of that opinion on the condition and tendency of the country at the perilous time it was delivered.

FOOTNOTES:

[615] See vol. I, 147, 231, of this work.

[616] See vol. III, chap. X, of this work.

[617] 7 Cranch, 164.

[618] _Ib._ 165.

[619] 7 Cranch, 166-67.

[620] This was true also of the entire court, since all the Justices concurred in Marshall's opinions in both cases as far as the legislative violations of the contract clause were concerned.

[621] He was not at all related to the Chief Justice. See vol. I, footnote to 15-16, of this work.

[622] Chase: _History of Dartmouth College and the Town of Hanover, New Hamps.h.i.+re_, I, 49.

[623] Chase, 45-48.