therefore, when the case came before the Supreme Court of the United States was, whether the trustees of the college were a public or a private corporation; and it was there decided that they were none the less a private corporation because of the public nature of the charity and of their having no personal, private interest in the funds which they administered.' The great principle enunciated by the federal court, that any act of a legislature which takes away any of the powers or franchises vested by its charter in a private corporation or its corporate officers, or which restrains or controls the legitimate exercise thereof, or transfers them to other persons without its assent, is a violation of the obligations of that charter, and is unconstitutional and void,' had not been denied by the court of the State. Not only the exalted character and reputation of Chief Justice Marshall, but also the elaborate consideration of the whole subject of vested corporate rights, has made this the leading case in the law, upon which has been founded a line of decisions extending the doctrine to its utmost limits and confirming it beyond all possibility at this day of successful assault.

New Jersey, (1889) 130 U. S. 189. But those charters of incorporation "which are granted, not as a part of the machinery of the government, but for the private benefit or purposes of the corporation, stand upon a different footing, and are held to be contracts between the legislature and the corporators, having for their consideration the liabilities and duties which the corporators assume by accepting them; and the grant of the franchise can no more be resumed by the legislature, or its benefits diminished or impaired without the consent of the grantees, than any other grant of property or valuable thing, unless the right to do so is reserved in the charter itself." Cooley on Constitutional Limitations, (5th ed.) 337.

2 Dartmouth College v. Woodward, 4 Wheat. 518.

3 Trustees of Dartmouth College v. Woodward, (1817) 1 N. H. 111.

4 As to the contract character of grants to private corporations see also, West River Bridge Co. v. Dix, 6 How. 542, 548; Newton v. Mahoning Co., 100 U. S. 557; Stone v. Mississippi, 101 U. S. 816, 819; Hewitt v. New York &c. R. Co., 12 Blatchf. 461; County of San Mateo v. Southern Pacific R. Co., (1882) known as "The Railroad Tax Cases," 8 Sawy. 260; 13 Fed. Rep. 722, 740, deciding that the fourteenth amendment of the federal constitution, in declaring that no State shall deny to any person the equal protection of the laws, imposes a limitation upon the exercise of all the powers of the State

1 Dartmouth College v. Woodward, which can touch the individual or his (1819) 4 Wheat. 518.

property, including among them the

§ 18. Extension of the doctrine of the Dartmouth College case. No judicial mind could have foreseen at the time of this decision, the extent of the subsequent applications to business corporations, of a principle declared in the case of a col

lege, any more than the extensive and varied growth of corporations could at that time have been predicted. But, from the beginning, the application of the rule to the charters of business corporations has been asserted and defended as necessary to stimulate corporate enterprise and investments.1 The principle, in subsequent cases, was held to embrace all contracts, executed and executory, between the State and private corporations; and it is held not to vary the case that the proposed change is slight, and that presumably it will not have an injurious effect on the corporation, for the reason that the State is held bound to keep each and every part of the agreement. Accordingly a grant of corporate privileges for a specified period cannot be resumed by the State within that time, and if the charter be without limitation as to time, it is forever irrepealable. And it is also held that the charter of

a private corporation organized under a general law, is as inviolable as that of one organized under a special act. Thus business corporations have been secured in the possession and enjoyment of every privilege, exemption and benefit clearly conferred by their charters or enabling acts, in the irrevocable title to property and franchises granted, in the exclusion of

Co., 4 Bank Reg. (* p. 100) 316; Sweatt v. Boston &c. R. Co., 3 Cliff. 343, 353; s. c. 5 Bank Reg. 242, 250; Allen v. McKean, 1 Sum. 297, 298, 301; Rundle v. Delaware &c. Canal, 1 Wall. Jr. 291; Adams v. Boston &c. R. Co., 1 Holmes, 31; Cooley on Constitutional Limitations, (5th ed.) 337. To the point that the charter comprehends political relations between the government and its citizens: Aspinwall v. Daviess Co., 22 How. 377. To the point that the charter comprehends political relations between the legislature and a public officer: Hall v. Wisconsin, 103 U. S. 10. Defining "due process of law," and "law of the land:" Beckwith v. Bean, 98 U. S. 295; County of San Mateo v. Southern Pacific R. Co., (The Railroad Tax Cases,) 8 Sawy. 260; s. c. 13 Fed. Rep. 765; The

Worthington, 19 Fed. Rep. 840; State v. Walruff, 25 Fed. Rep. 199; Kansas v. Bradley, (1885) 26 Fed. Rep. 291.

1 Chenango Bridge Co. v. Binghamton Bridge Co., 3 Wall. 51, 74; "The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 239.

2 Green v. Biddle, 8 Wheat. 1; Bridge Proprietors v. Hoboken, 1 Wall, 116.

3 Green v. Biddle, 8 Wheat. 2; Planters' Bank v. Sharp, 6 How. 327; Bronson v. Kinzie, 1 How. 311; Hare's American Constitutional Law, 600.

4 Erie & N. R. Co. v. Casey, (1856) 26 Pa. St. 287; Greenwood v. Freight Co., (1881) 105 U. S. 13.

5 People v. Keese, 27 Hun, 483.

competing corporate enterprises and works, in freedom from increased public burdens, in the right to the use and enjoy. ment of their property and franchises, and in immunity from legislative control. The courts of the United States do not, however, accept as conclusive upon them the judgment of the State court, either as to the non-existence of contracts or as to their non-impairment, because if the decision of the State court were to be accepted without inquiry or examination, the constitutional prohibition would be nugatory.2

§ 19. Criticism of the doctrine of the Dartmouth College case.— In the early history of corporations in America every encouragement was extended to them. Valuable franchises, exclusive privileges and exemptions were offered to induce the moneyed interests of the country to engage in what appeared at that time to be most hazardous undertakings. But now that the resources of the country have been developed, mainly through the instrumentality of organized capital, and when those who ventured their fortunes and expended their talents in building up those great bodies corporate, are beginning in a measure to reap the fruits of their labors, murmurs of discontent are heard, and a disposition has manifested itself to impose such legislative restrictions upon those franchises, ex

1"The Dartmouth College Case and Private Corporations," by William P. Wells, (1886) 9 Am. Bar Assoc. Rep. 229, 240, citing Planters' Bank v. Sharp, 6 How. 301; Trustees of Vincennes Univ. v. Indiana, 14 How. 268; Chenango Bridge Co. v. Binghamton Bridge Co., 3 Wall. 51, 73; Davis v. Gray, 16 Wall. 203; New Jersey v. Yard, 95 U. S. 104; New Orleans Gas and Water Cases, 115 U. S. 650.

2 State Bank v. Knoop, 16 How. 369; Ohio L. I. & T. Co. v. De Bolt, 16 How. 416; Jefferson Branch Bank v. Skelly, (1861) 1 Black, 436, where the federal Supreme Court said: It has been decided three times by this court that the 60th section of the charter of the State Bank of Ohio was a contract between the State

and the bank within the meaning, and entitled to the protection, of the constitution of the United States against any law of the State of Ohio impairing its obligation; and the acts of Ohio, upon which the Supreme Court of Ohio has assumed the State's right to tax the State Bank of Ohio and its branches differently from the tax stipulated for in the 60th section of the charter, were and are unconstitutional and void; Bridge Proprietors v. Hoboken Co., 1 Wall. 116; Delmas v. Insurance Co., 14 Wall. 661: Wright v. Nagle, 101 U. S. 791; Williams v. Louisiana, 103 U. S. 637; Louisville & N. R. Co. v. Palmes, 109 U. S. 244; Patterson's Federal Restraints on State Action, § 59. Cf. Cases cited infra, § 20.

clusive privileges and exemptions which constituted the chief inducements to the acceptance of the duties and obligations of corporate existence, as to render them less valuable to the grantees thereof, and practically to amount to a withdrawal of the consideration upon which the contract was founded. It has been urged that the decision in the Dartmouth College. case, having been rendered prior to the invention of railways and telegraphs, ought not to be extended in its application to them; and that they are not " private corporations" within the meaning of the rule. The gravest dangers to the liberties of the people are predicted as the result of extending the protection of the rule to railway and telegraph companies. And