[Trustees of] Dartmouth College v. Woodward 4 Wheaton 518 (1819). In the Dartmouth College case, the U.S. Supreme Court, in an opinion written by Chief Justice John Marshall, extended the scope of the Contract Clause of the Constitution (Article I, Section 10). The case arose when in 1816 the New Hampshire legislature passed acts that in essence transformed Dartmouth College from a private to a public institution. In 1769, the royal governor of New Hampshire, acting under the authority of the English crown, had granted the College a charter to carry out educational work among the Native Americans of the colony. Under the charter, administration of the College was left to a set of trustees, who appointed a president, made rules for the institution, and filled vacancies in their own body. In the early nineteenth century, the President and trustees were caught up in the political fights between the Federalist and Republican political parties; the Republican legislature of New Hampshire passed acts that weakened the control of the trustees over the College and subjected the College to inspection by the State.

At that time, it was understood that state legislatures could regulate corporations that performed public roles, but it was also assumed that private property could not be taken from individuals by state action without compensation. The College lost the case they brought in the New Hampshire courts against the legislative acts, and then appealed, under the Judiciary Act of 1789, to the U.S. Supreme Court. Marshall's opinion turned on the question of whether the original royal charter was a contract, and the State acts, in consequence, an impairment of contract obligations prohibited by the Contract Clause of the Constitution. Marshall ruled that the College was a "private eleemosynary institution" and that the charter establishing the College was a contract between the State and the original donors to the institution. He voided the State acts, and thereby expanded the constitutional meaning of the term "contract" in the Constitution. Unlike in his earlier ruling in Fletcher v. Peck (1810), Marshall here based his protection of the rights of the trustees exclusively on the Contract Clause rather than noting, as he had in Fletcher, that the very nature and purpose of government prohibited the taking of property without compensation. The Fletcher and Dartmouth cases gave the federal courts an expended role during the nineteenth century in overseeing state legislative action concerning private property rights.

G. Edward White, The Marshall Court and the Culture of Change, 1815-1835 (1988).