in error, are void, being repugnant to the constitution of that State, and also to the constitution of the United States. Whether the first objection to these laws be well founded or not, is a question with which this Court, in this case, has nothing to do: because it has no jurisdiction, as an appellate Court, over the decisions of a State Court, except in cases where is drawn in question the validity of a treaty, or statute of, or an authority exercised under, the United States, and the decision is against their validity; or where is drawn in question the validity of a statute of, or an authority exercised under, any State, on the ground of their being repugnant to the constitution, treaties, or laws of the United States, and the decision is in favour of their validity; or where is drawn in question the construction of any clause of the constitution, or of a treaty, or statute of, or commission held under, the United States, and the decision is against the title, right, privilege, or exemption specially set up or claimed by either party, under such clause of the said constitution, treaty, statute, or commission. The clause in the constitution of the United States which was drawn in question in the Court from whence this transcript has been sent, is that part of the tenth section of the first article, which declares, that "no State shall pass any bill of attainder, ex post facto law, or any law impairing the obligation of contracts." The decision of the State Court is against the title specially claimed by the plaintiffs in error, under the above clause, because they contend, that the laws of New-Hampshire, above referred to, 1819. Dartmouth V. Woodward. 1819. impair the obligation of a contract, and are, conseDartmouth quently, repugnant to the above clause of the constitution of the United States, and void. College V. Woodward. A grant is a contract. There are, then, two questions for this court to decide: 1st. Is the charter granted to Dartmouth College on the 13th of December, 1769, to be considered as a contract? If it be, then, 2dly. Do the laws in question impair its obligation? 1. What is a contract? It may be defined to be a transaction between two or more persons, in which each party comes under an obligation to the other, and each reciprocally acquires a right to whatever is promised by the other. Under this definition, says Mr. Powell, it is obvious, that every feoffment, gift, grant, agreement, promise, &c. may be included, because in all there is a mutual consent of the minds of the parties concerned in them, upon an agreement between them respecting some property or right that is the object of the stipulation. He adds, that the ingredients requisite to form a contract, are, parties, consent, and an obligation to be created or dissolved: these must all concur, because the regular effect of all contracts is on one side to acquire, and on the other to part with, some property or rights; or to abridge, or to restrain natural liberty, by binding the parties to do, or restraining them from doing, something which before they might have done, or omitted. If a doubt could exist that a grant is a contract, the point was decided in the case of Fletcher v. Peck,* a Powell on Contr. 6. b 6 Cranch, 87. 1819. Dartmouth V. in which it was laid down, that a contract is either executory or executed; by the former, a party binds himself to do or not to do a particular thing; the College latter is one in which the object of the contract is Woodward. performed, and this differs in nothing from a grant; but whether executed or executory, they both contain obligations binding on the parties, and both are equally within the provisions of the constitution of the United States, which forbids the State governments to pass laws impairing the obligation of contracts. of a private corporation by charter, is such a If, then, a grant be a contract, within the meaning The creation of the constitution of the United States, the next inquiry is, whether the creation of a corporation by charter, be such a grant, as includes an obligation of the nature of a contract, which no State legislature can pass laws to impair? A corporation is defined by Mr. Justice Blackstone to be a franchise. It is, says he, "a franchise for a number of persons, to be incorporated and exist as a body politic, with a power to maintain perpetual succession, and to do corporate acts, and each individual of such corporation is also said to have a franchise, or freedom." This franchise, like other franchises, is an incorporeal hereditament, issuing out of something real or personal, or concerning or annexed to, and exercisable within a thing corporate. To this grant, or this franchise, the parties are, the king, and the persons for whose benefit it is created, or trustees for them. The assent of both is neces a 2 Bl. Com. 37. grant as ingation of a con cludes the obli tract, which no State legisla ture can pass laws to impair. 1819. Dartmouth V. sary. The subjects of the grant are not only privileges and immunities, but property, or, which is the College same thing, a capacity to acquire and to hold proWoodward. perty in perpetuity. Certain obligations are created, binding both on the grantor and the grantees. On the part of the former, it amounts to an extinguishment of the king's prerogative to bestow the same identical franchise on another corporate body, because it would prejudice his prior grant. It implies, therefore, a contract not to reassert the right to grant the franchise to another, or to impair it. There is also an implied contract, that the founder of a private charity, or his heirs, or other persons appointed by him for that purpose, shall have the right to visit, and to govern the corporation, of which he is the acknowledged founder and patron, and also, that in case of its dissolution, the reversionary right of the founder to the property, with which he had endowed it, should be preserved inviolate. The rights acquired by the other contracting party are those of having perpetual succession, of suing and being sued, of purchasing lands for the benefit of themselves and their successors, and of having a common seal, and of making bye-laws. The obligation imposed upon them, and which forms the consideration of the grant, is that of acting up to the end or design for which they were created by their founder. Mr. Justice Buller, in the case of the King v. Passmore,' says, that the grant of incorporation is a compact between the crown and a number of persons, the latter of whom undertake, in consideration 1819. Dartmouth V. of the privileges bestowed, to exert themselves for the good government of the place. If they fail to perform their part of it, there is an end of the compact. The charter of a corporation, says Mr. Justice Woodward Blackstone," may be forfeited through negligence, or abuse of its franchises, in which case the law judges, that the body politic has broken the condition upon which it was incorporated, and thereupon the corporation is void. It appears to me, upon the whole, that these principles and authorities prove, incontrovertibly, that a charter of incorporation is a contract. Distinction between pub corporations. 2. The next question is, do the acts of the legislature of New-Hampshire of the 27th of June, and lic and private 18th and 26th of December, 1816, impair this contract, within the true intent and meaning of the constitution of the United States ? Previous to the examination of this question, it will be proper clearly to mark the distinction between the different kinds of lay aggregate corporations, in order to prevent any implied decision by this Court of any other case, than the one immediately before it. We are informed, by the case of Philips v. Bury," which contains all the doctrine of corporations connected with this point, that there are two kinds of corporations aggregate, viz. such as are for public government, and such as are for private charity. The first are those for the government of a town, city, or the like; and being for public advantage, are a 2 Bl. Com. 484. b 1 Ld. Raym. 5. S. C. 2 T. R. 346. |