And here we might pause; but there is yet remaining another view of the subject, which cannot consistently be passed over without notice. It seems to be assumed by the argument of the defendant's counsel, that there is no contract whatsoever, in virtue of the charter, between the crown and the corporation itself. But it deserves consideration, whether this assumption can be sustained upon a solid foundation. do not know how to reason on this point better | the acceptance of the charter, or the donations than in the manner urged by one of the relat- to the charity. or's counsel, who considered the grant of incorporation to be a compact between the crown and a certain number of the subjects, the latter of whom undertake, in consideration of the privileges which are bestowed, to exert themselves for the good government of the place," (i. e.. the place incorporated). It will not be pretended, that if a charter be granted for a bank, and the stockholders pay in their own funds, the charter is to be deemed a grant with-out consideration, and, therefore, revocable at the pleasure of the grantor. Yet here the funds are to be managed, and the services performed exclusively for the use and benefit of the stockholders themselves. And where the grantees are mere trustees to perform services without reward, exclusively for the benefit of others, for public charity, can it be reasonably argued that these services are less valuable to the government than if performed for the private 689*] emolument of *the trustees themselves? In respect, then, to the trustees also, there was a valuable consideration for the charter, the consideration of services agreed to be rendered by them in execution of a charity, from which they could receive no private remuneration. If this had been a new charter granted to an existing corporation, or a grant of lands to an existing corporation, there could not have been a doubt that the grant would have been an executed contract with the corporation; as much so, as if it had been to any private person. But it is supposed, that as this corporation was not then in existence, but was created and its franchises bestowed, uno flatu, the charter cannot be construed a contract, because there was no person in rerum natura, with whom it might be made. Is this, however, a just and legal view of the *subject? If [*691 the corporation had no existence so as to become a contracting party, neither had it for the purpose of receiving a grant of the franchises. There is yet another view of this part of the The truth is, that there may be a priority of case, which deserves the most weighty con- operation of things in the same grant; and the sideration. The corporation was expressly law distinguishes and gives such priority created for the purpose of distributing in per- wherever it is necessary to effectuate the ob petuity the charitable donations of private jects of the grant. From the nature of things, benefactors. By the terms of the charter, the the artificial person called a corporation must trustees, and their successors, in their corporate be created before it can be capable of taking capacity, were to receive, hold, and exclusively anything. When, therefore, a charter is grantmanage, all the funds so contributed. The ed, and it brings the corporation into existence crown, then, upon the face of the charter, without any act of the natural persons who pledged its faith that the donations of private compose it, and gives such corporation any benefactors should be perpetually devoted to privileges, franchises, or property, the law their original purposes, without any interfer- deems the corporation to be first brought into ence on its own part, and should be forever ad- existence, and then clothes it with the granted ministered by the trustees of the corporation, liberties and property. When, on the other unless its corporate franchises should be taken hand, the corporation is to be brought into exaway by due process of law. From the very istence by some future acts of the corporators, nature of the case, therefore, there was an im- the franchises remain in abeyance, until such plied contract on the part of the crown with acts are done, and when the corporation is every benefactor, that if he would give his brought into life the franchises instantaneousmoney, it should be deemed a charity protectedly attach to it. There may be, in intendment by the charter, and be administered by the corporation according to the general law of the land. As soon, then, as a donation was made to the corporation, there was an implied contract springing up, and founded on a valuable consideration, that the crown would not revoke or alter the charter, or change its administration, without the consent of the corporation. There was also an implied contract between the corporation itself, and every benefactor 690*] *upon a like consideration, that it would administer his bounty according to the terms, and for the objects stipulated in the charter. In every view of the case, if a consideration were necessary (which I utterly deny) to make the charter a valid contract, a valuable consideration did exist, as to the founder, the trustees, and the benefactors. And upon the soundest legal principles, the charter may be properly deemed, according to the various aspects, in which it is viewed, as a several contract with each of these parties, in virtue of the foundation, or the endowment of the college, or of law, a priority of time, even in an instant, for this purpose. And if the corporation have an existence before the grant of its other franchises attaches, what more difficulty is there in deeming the grant of these franchises a contract with it, than if granted by another instrument at a subsequent period? It behooves those also, who hold that a grant to a corporation, not then in existence, is incapable of being [*692 deemed a contract on that account, to consider, whether they do not at the same time establish that the grant itself is nullity for precisely the same reason. Yet such a doctrine would strike us all as pregnant with absurdity, since it would prove that an act of incorporation could never confer any authorities, or rights, or property, on the corporation it created. It may be admitted that two parties are necessary to form a perfect contract, but it is denied that it is 1.-Case of Sutton's Hospital, 10 Co. 23, Buckland v. Fowcher, cited 10 Co. 27, 28, and recognized in Attorney-General v. Bowyer, 3 Ves., Jun., 714, 726, 737; S. P. Highmore on Mortum, 200. &c. 2.-Ib. necessary that the assent of both parties must be at the same time. If the legislature were voluntarily to grant land in fee to the first child of A to be hereafter born; as soon as such child should be born the estate would vest in it. Would it be contended that such grant, when it took effect, was revocable, and not an executed contract, upon the acceptance of the estate? The same question might be asked in a case of a gratuitous grant by the king or the legislature to A, for life, and afterwards to the heirs of B, who is then living. Take the case of a bank, incorporated for a limited period, upon the express condition that it shall pay out of its corporate funds a certain sum, as the consideration for the charter, and after the corporation is organized a payment duly made of the sum out of the corporate funds; will it be contended that there is not a subsisting contract between the government and the corporation, by the matters thus arising ex post facto, that the charter shall not be revoked during the stipulated period? Suppose an act declaring that all persons, who should thereafter pay into the public treasury a stipulated sum, should 693*] be tenants in common of certain *lands belonging to the state in certain proportions; if a person afterwards born pays the stipulated sum into the treasury, is it less a contract with him than it would be with a person in esse at the time the act passed? We must admit that there may be future springing contracts in re spect to persons not now in esse, or we shall involve ourselves in inextricable difficulties. And if there may be in respect to natural per sons, why not also in respect to artificial persons, created by the law, for the very purpose of being clothed with corporate powers? I am unable to distinguish between the case of a grant of land or of franchises to an existing corporation, and a like grant to a corporation brought into life for the very purpose of receiving the grant. As soon as it is in esse, and the franchises and property become vested and executed in it, the grant is just as much an executed contract as if its prior existence had been established for a century. a contract with a public officer, as in the case of a stipulated salary for his services, during a limited period, this, during the limited period, is just as much a contract, within the purview of the constitutional prohibition as a like contract would be between two private citizens. Will it be contended that the legislature of a state can diminish the salary of a judge holding his office during good behavior? Such an authority has never yet been asserted to our knowledge. It may also be admitted that corporations for mere public government, such as towns, cities, and counties, may in many respects be subject to legislative control. But it will hardly be contended that, even in respect to such corporations, the legislative power is so transcendent that it may at its will take away the private property of the corporation, or change the uses of its private funds acquired under the public faith. Can the legislature confiscate to its own use the private funds which a municipal corporation holds under its charter, without any default or consent of the corporators? If a municipal corporation be capable of holding devises and legacies to charitable uses (as many municipal corporations are), *does the legislature, under our forms [*695 of limited government, possess the authority to seize upon those funds, and appropriate them to other uses, at its own arbitrary pleasure, against the will of the donors and donees? From the very nature of our governments, the public faith is pledged the other way; and that pledge constitutes a valid compact; and that compact is subject only to judicial inquiry, construction, and abrogation. This court have already had occasion, in other causes, to express their opinion on this subject; and there is not the slightest inclination to retract it.1 As to the case of the contract of marriage, which the argument supposes not to be within the reach of the prohibitory clause, because it is matter of civil institution, I profess not to feel the weight of the reason assigned for the exception. In a legal sense, all contracts, recognized as valid in any country, may be properly said to be matters of civil institution, since they obtain their obligation and construction jure loci contractus. Titles to land, con Supposing, however, that in either of the views which have been suggested, the charter of Dartmouth College is to be deemed a constituting part of the public domain, acquired by tract, we are yet met with several objections of another nature. grants under the provisions of existing laws by private persons, are certainly contracts of civil It is, in the first place, contended that it is institution. Yet no one ever supposed that not a contract within the prohibitory clause of when acquired, bona fide, they were not beyond the constitution, because that clause was never the reach of legislative revocation. And so, intended to apply to mere contracts of civil certainly, is the established doctrine of this institution, such as the contract of marriage, court. A general law regulating divorces from or to grants of power to state officers, or to con- the contract of marriage, like a law regulating tracts relative to their offices, or to grants of *remedies in other cases of breaches of [*696 trust to be exercised for purposes merely pub-contracts, is not necessarily a law impairing the lic, where the grantees take no beneficial interest. It is admitted that the state legislatures have 694*]*power to enlarge, repeal, and limit the authorities of public officers in their official capacities, in all cases, where the constitutions of the states respectively do not prohibit them; and this, among others, for the very reason that there is no express or implied contract, that they shall always, during their continuance in office, exercise such authorities. They are to exercise them only during the good pleasure of the legislature. But when the legislature makes Wheat. 4. U. S., BOOK 4. obligation of such a contract. It may be the only effectual mode of enforcing the obligations of the contract on both sides. A law punishing a breach of a contract, by imposing a forfeiture of the rights acquired under it, or dissolving it because the mutual obligations were no longer observed, is in no correct sense a law impairing the obligations of the contract. Could a law, compelling a specific performance, by giving a new remedy, be justly deemed an excess of legislative power? Thus far the contract of marriage has been considered with reference to general laws regulating divorces upon breaches of that contract. But if the argument means to assert that the legislative power to dissolve such a contract, without any breach on either side, against the wishes of the parties, and without any judicial inquiry to ascertain a breach, I certain-ities not valuable to the parties as property, ly am not prepared to admit such a power, or that its exercise would not entrench upon the prohibition of the constitution. If under the faith of existing laws a contract of marriage be duly solemnized, or a marriage settlement be made (and marriage is always in law a valuable consideration for a contract), it is not easy to perceive why a dissolution of its obligations, without any default or assent of the parties, may not as well fall within the prohibition as any other contract for a valuable consideration. A man has just as good a right to his wife as to the property acquired under a marriage con697*] tract. *He has a legal right to her society and her fortune; and to devest such right without his default, and against his will, would be as flagrant a violation of the principles of justice as the confiscation of his own estate. I leave this case, however, to be settled when it shall arise. I have gone into it, because it was urged with great earnestness upon us, and required a reply. It is sufficient now to say, that as at present advised, the argument, derived from this source, does not press my mind with any new and insurmountable difficulty. In respect also to grants and contracts, it would be far too narrow a construction of the constitution to limit the prohibitory clause to such only where the parties take for their own private benefit. A grant to a private trustee for the benefit of a particular cestui que trust, or for any special, private or public charity, cannot be the less a contract because the trustee takes nothing for his own benefit. A grant of the next presentation to a church is still a contract, although it limit the grantee to a mere right of nomination or patronage. The fallacy of the argument consists in assuming the very ground in controversy. It is not admitted that a contract with a trustee is in its own nature revoca ble, whether it be for special or general purposes, for public charity or particular beneficence. A private donation, vested in a trustee for objects of a general nature, does not thereby become a public trust, which the government may, at its pleasure, take from the trustee, and 698*] administer *in its own way. The truth is, that the government has no power to revoke a grant, even of its own funds, when given to a private person, or a corporation for special uses. It cannot recall its own endowments granted to any hospital, or college, or city, or town, for the use of such corporations. The only authority remaining to the government is judicial, to ascertain the validity of the grant, to enforce its proper uses, to suppress frauds, and, if the uses are charitable, to secure their regular administration through the means of equitable tribunals, in cases where there would otherwise be a failure of justice. 1.-2 Bl. Com. 21. 2 Another objection growing out of, and connected with that which we have been considering, is, that no grants are within the constitu tional prohibition, except such as respect property in the strict sense of the term: that is to say, beneficial interests in lands, tenements, and hereditaments, &c., &c., which may be sold by the grantees for their own benefit; and that grants of franchises, immunities, and authorare excluded from its purview. No au thority has been cited to sustain this distinction, and no reason is perceived to justify its adoption. There are many rights, franchises. and authorities which are valuable in contemplation of law, where no beneficial interest can accrue to the possessor. A grant of the next presentation to a church, limited to the grantee alone, has been already mentioned. A power of appointment, reserved in a marriage settlement, either to a party or a stranger, to appoint uses in favor of third persons, without compensation, is another instance. *A [*699 grant of lands to a trustee to raise portions or pay debts, is, in law, a valuable grant, and conveys a legal estate. Even a power given by will to executors to sell an estate for payment of debts is, by the better opinions and authority, coupled with a trust, and capable of survivorship. Many dignities and offices, existing at common law, are merely honorary, and without profit, and sometimes are onerous. Yet a grant of them has never been supposed the less a contract on that account. In respect to franchises, whether corporate or not, which include a pernancy of profits, such as a right of fishery, or to hold a ferry, a market, or a fair, or to erect a turnpike, bank, or bridge, there is no pretense to say that grants of them are not within the constitution. Yet they may, in point of fact, be of no exchangeable value to the owners. They may be worthless in the market. The truth, however, is, that all incorporeal hereditaments, whether they be immunities, dignities, offices, or franchises, or other rights, are deemed valuable in law. The owners have a legal estate and property in them, and legal remedies to support and recover them in case of any injury, obstruction, or disseizin of them. Whenever they are the subjects of a contract or grant, they are just as much within the reach of the constitution as any other grant. *Nor [*700 is there any solid reason why a contract for the exercise of a mere authority should not be just as much guarded as a contract for the use and dominion of property. Mere naked powers, which are to be exercised for the exclusive benefit of the grantor, are revocable by him for that very reason. But it is otherwise where a power is to be exercised in aid of a right vested in the,grantee. We all know that a power of attorney, forming a part of a security upon the assignment of a chose in action, is not revocable by the grantor. For it then sounds in contract and is coupled with an den on Powers, 140; Jackson v. Jansen, 6 Johns. Rep. 73; Franklin v. Osgood, 2 Johns. Cas. 1; S. C. 14 Johns. Rep. 527; Zebach v. Smith, 3 Binn. Rep. 69; Lessee of Moody v. Vandyke, 4 Birn. 7. 31; Attorney-General v. Gleg, 1 Atk. 356; 1 Bac. Abr. 586 (Gwillim edit.) 2.-Co. Lit. 113, a; Harg. and Butler's note 2; Sug interest.1 So, if an estate be conveyed in | funds. They were indeed to be devoted to the trust for the grantor, the estate is irrevocable in the grantee, although he can take no beneficial interest for himself. Many of the best settled estates stand upon conveyances of this nature; and there can be no doubt that such grants are contracts within the prohibition in question. " In respect to corporate franchises, they are, properly speaking, legal estates vested in the corporation itself as soon as it is in esse. They are not mere naked powers granted to the corporation, but powers coupled with an interest. The property of the corporation vests upon the possession of its franchises; and whatever may be thought as to the corporators, it cannot be denied that the corporation itself has a legal interest in them. It may sue and be sued for them. Nay, more, this very right is one of its 701*] ordinary *franchises. It is likewise a franchise," says Justice Blackstone, "for a number of persons to be incorporated and subsist as a body politic, with power to maintain perpetual succession, and do other corporate acts; and each individual member of such corporation is also said to have a franchise or freedom." In order to get rid of the legal difficulty of these franchises being considered as valuable hereditaments or property, the counsel for the defendant are driven to contend that the corporators or trustees are mere agents of the corporation, in whom no beneficial interest subsists; and so nothing but a naked power is touched by removing them from the trust; and then to hold the corporation itself a mere ideal being, capable indeed of holding property or franchises, but having no interest in them which can be the subject of contract. Neither of these positions is admissible. The former has been already sufficiently considered, and the latter may be disposed of in a few words. The corporators are not mere agents, but have vested rights in their character, as corporators. The right to be a freeman of a corporation is a valuable temporal right. It is a right of voting and acting in the corporate concerns, which the law recognizes and enforces, and for a violation of which it provides a remedy. It is founded on the same basis as the right of voting in public elections; it is as sacred a right; and whatever might have been the prevalence of former doubts, since the time of Lord Holt, such a right has always been deemed a valuable franchise or privilege.3 702*] *This reasoning, which has been thus far urged, applies with full force to the case of Dartmouth College. The franchises granted by the charter were vested in the trustees in their corporate character. The lands and other property, subsequently acquired, were held by them in the same manner. They were the private demesnes of the corporation held by it, not, as the argument supposes, for the use and benefit of the people of New Hampshire, but, as the charter itself declares, for the use of Dartmouth College." There were not, and in the nature of things could not be, any other cestui que use entitled to claim those 1.-Walsh v. Whitcomb, 2 Esp. 565; Bergen v. Bennett, 1 Caines' Cases in Error, 1, 15; Raymond v. Squire, 11 Johns. Rep. 47. 2.-2 Bl. Com. 37; 1 Kyd on Corp. 14, 16. promotion of piety and learning, not at large, but in that college, and the establishments connected with it; and the mode in which the charity was to be applied, and the objects of it, were left solely to the trustees, who were the legal governors and administrators of it. No particular person in New Hampshire possessed a vested right in the bounty; nor could he force himself upon the trustees as a proper object. The legislature itself could not deprive the trustees of the corporate funds, or annul their discretion in the application of them, or distribute them among its own favorites. Could the legislature of New Hampshire have seized the land given by the state of Vermont to the corporation, and apropriated it to uses distinct from those intended by the charity, against the will of the trustees? This question cannot be answered in the affirmative, until it is established, that the legislature may lawfully take the property of A and give it to B; and if it *could not take away or restrain the [*703 corporate funds, upon what pretense can it take away or restrain the corporate franchises? Without the franchises, the funds could not be used for corporate purposes; but without the funds, the possession of the franchises might still be of inestimable value to the college and to the cause of religion and learning. Thus far, the rights of the corporation itself, in respect to its property and franchises, have been more immediately considered. But there are other rights and privileges belonging to the trustees collectively, and severally, which are deserving of notice. They are entrusted with the exclusive power to manage the funds, to choose the officers, and to regulate the corporate concerns, according to their own discretion. The jus patronatus is vested in them. The visitatorial power, in its most enlarged extent, also belongs to them. When this power devolves upon the founder of a charity, it is an hereditament, descendible in perpetuity to his heirs, and in default of heirs, it escheats to the government.4 It is a valuable right founded in property, as much so as the right of patronage in any other case. It is a right which partakes of a judicial nature. May not the founder as justly contract for the possession of this right in return for his endowment as for any other equivalent? and, if instead of holding it as an hereditament, he assigns it in perpetuity to the trustees of the corporation, is it less a valuable hereditament in their hands? The right is not merely a collective right in all the trustees; each of them also has a franchise in it. [*704 Lord Holt says, “it is agreeable to reason, and the rules of law, that a franchise should be vested in the corporation aggregate, and yet the benefit redound to the particular members, and be enjoyed by them in their private capacities. Where the privilege of election is used by particular persons, it is a particular right vested in each particular man. Each of the trustees had a right to vote in all elections. If obstructed in the exercise of it, the law furnished him with an adequate recompense in damages. If 3.-Ashby v. White, 2 Ld. Raym. 938; 1 Kyd on Corp. 16. 4.-Rex v. St. Catharine's Hall, 4 T. R. 233. 5.-Ashby v. White, 2 Ld. Raym. 938, 952; Attorney-General v. Dixie, 13 Ves. 519. ousted unlawfully from his office, the law of William and Mary's College in Virginia would, by a mandamus, compel a restoration. (which had received its charter from King It is attempted, however, to establish, that William, and Queen Mary) should still be perthe trustees have no interest in the corporate mitted to administer the charity under Mr. franchises, because it is said that they may be Boyle's will, no interest having passed to the witnesses in a suit brought against the corpora- college under the will, but it acting as an agent tion. The case cited at the bar certainly goes or trustee under a decree in chancery, or the length of asserting, that in a suit brought whether a new scheme for the administration of against a charitable corporation for a recom- the charity should be laid before the court. pense for services performed for the corpora- Lord Thurlow directed a new scheme, because tion, the governors, constituting the corporation the college belonging to an independent govern(but whether entrusted with its funds or not by ment, was no longer within the reach of the the act of incorporation does not appear), are court. And he very unnecessarily added, that competent witnesses against the plaintiff. he could not now consider the college as a corBut assuming this case to have been rightly poration, or as another report states, that he decided (as to which, upon the authorities, there could not take notice of it as a corpo- [*707 may be room to doubt), the corporators being ration, it not having proved its existence as a 705*] *technically parties to the record, it corporation at all. If, by this, Lord Thurlow does not establish that in a suit for the cor- meant to declare that all charters acquired in porate property vested in the trustees in their America from the crown were destroyed by the corporate capacity, the trustees are competent revolution, his doctrine is not law; and if it had witnesses. At all events, it does not establish, been true, it would equally apply to all other that in a suit for the corporate franchises to be grants from the crown, which would be monexercised by the trustees, or to enforce their strous. It is a principal of the common law, visitatorial power, the trustees would be com- which has been recognized as well in this as in petent witnesses. On a mandamus to restore a other courts, that the division of an empire trustee to his corporate or visitatorial power, it works no forfeiture of previously-vested rights will not be contended that the trustee is him- of property. And this maxim is equally conself a competent witness to establish his own sonant with the common sense of mankind, and rights, or the corporate rights. Yet why not, the maxims of eternal justice. This objection, if the law deems that a trustee has no interest therefore, may be safely dismissed without furin the franchise? The test of interest assumed ther comment. in the argument proves nothing in this case. It is not enough to establish that the trustees are sometimes competent witnesses; it is necessary to show that they are always so in respect to the corporate franchises, and their own. It will not be pretended, that in a suit for damages for obstruction in the exercise of his official powers, a trustee is a disinterested witness. Such an obstruction is not a damnum absque injuria. Each trustee has a vested right and legal interest in his office, and it cannot be devested but by due course of law. The illustration, therefore, lends no new force to the argument, for it does not establish that when their own 706*] rights are in controversy the trustees have no legal interest in their offices. The principal objections having been thus answered satisfactorily, at least to my own mind, it remains only to declare that my opinion, after the most mature deliberation, is, that the charter of Dartmouth College, granted in 1769, is a contract within the purview of the constitutional prohibition. I might now proceed to the discussion of the second question, but it is necessary previously to dispose of a doctrine which has been very seriously urged at the bar, viz., that the charter of Dartmouth College was dissolved at the revolution, and is, therefore, a mere nullity. A case before Lord Thurlow has been cited in support of this doctrine." The principal question in that case was, whether the corporation 1.-Weller v. The Governor of the Foundling Hospital, Peake's N. P. Rep. 153. 2.-Attorney-General v. City of London, &c., 3 Bro. Ch. c. 171, S. C.; 1 Ves., Jun., 243; Burton v. Hinde, 5 T. R. 174; Nason v. Thatcher, 7 Mass. R. 398: Phillips on Evid. 12, 52, 57, and notes; 1 Kyd on Corp. 304, &c.; Highmore on Mortm. 514. 3.-Attorney-General v. City of London, 3 Bro. ch. c. 171; S. Č. 1 Ves., Jun., 243. The The remaining inquiry is, whether the acts of the legislature of New Hampshire now in question, or any of them, impair the obligations of the charter of Dartmouth College. attempt certainly is to force upon the corporation a new charter against the will of the corporators. Nothing seems better settled at the common law than the doctrine that the crown cannot force upon a private corporation a new charter, or compel the old members to give up their own franchises, or to admit new members into the corporation. Neither can the crown compel a man *to become a member of [*708 such corporation against his will.' As little has it been supposed, that under our limited gov ernments, the legislature possessed such transcendent authority. On one occasion, a very able court held that the state legislature had no authority to compel a person to become a member of a mere private corporation created for the promotion of a private enterprise, because every man had a right to refuse a grant. On another occasion, the same learned court declared, that they were all satisfied that the rights legally vested in a corporation cannot be controlled or destroyed by any subsequent statute unless a power for that purpose be reserved to the legislature in the act of incorporation. These principles are so consonant with justice, sound policy, and legal reasoning, that it is difficult to resist the impression of 4.-1 Ves., Jun., 243. 5.-Terrett v. Taylor, 9 Cranch, 43, 50; Kelly v. Harrison, 2 Johns. Cas. 29; Jackson v. Lunn, 3 Johns. Cas. 109; Calvin's case, 7 Co. 27. 6.-Rex v. Vice-Chancellor of Cambridge, 3 Bur. 1656; Rex v. Passmore, 3 T. R. 240; 1 Kyd on Corp. 65; Rex v. Larwood, Comb. 316. 7.-Rex v. Dr. Askew, 4 Bur. 2200. |