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Chief Justice Parker, of New Hampshire, who, in Brewster v. Houyh, argued strongly against the power of a legislature to contract away its right of taxation, attempted to distinguish New Jersey v. Wilson on the ground that the act was in the nature of a treaty with the Indians, a separate and distinct body, governed by their own laws, although residing within the province of New Jersey. But this would render it still less a private contract; for if it was a treaty, it was a contract between two public bodies concerning a governmental prerogative, and, therefore, both as to parties and as to subject-matter, was a public contract.
Broad principles of public policy too, and the interests of government, forbid, in our judgment, a permanent recognition of the doctrine of this case. The power of taxation is one of the two prerogatives that are absolutely essential to the existence of sovereignty, without which no civilized government can last a week. It is too late in the day to question that the States of the Union are sovereignties in which, notwithstanding that their highest sovereign prerogatives have been transferred to the Federal government, by far the larger part of the sovereign functions are yet embodied. The results which will follow, if the legislature, acting under any form of constitution, can release the right of taxation so that it will be out of the power of the State, whether acting by the legislature or by the people in their sovereign capacity, ever to resume it (and we are supposing no extreme case), would often be such as greatly to embarrass the government, if not, in some respects, to make government impossible. It is no very extravagant, nor, in the rapid growth of our country, any very improbable, assertion, to say that by such means an extent of territory equal to the city of New York, or, say, to Chicago or St. Louis, might be entirely and forever exempted from taxation : that is, all the real property in a given district to the value of hundreds of millions of dollars. How, in such a case, could a government be carried on within the limits of the territory so free from all liability to share the public burdens, — not the State government, but the local municipal government, a branch of the government no less essential than the main government ? Suppose a great city had grown up on the lands thus exempted by the legislature of New Jersey, how long would it
have been tolerated, be the constitution what it may, and be the decisions of the court what they may, that the owners of this property should be exempted from taxation? There are limits to all judicial interference with the functions of government, however questionable may be their legality. There are times when a people will break away from all constitutional restraints; and should a case arise, as it may yet arise in one of the Western States, fairly testing this, as it seems to us, most unsound principle of law, any decision of the courts rendering a large extent of territory or a great corporation entirely exempt from taxation, would be utterly repudiated and nullified by force.
In Commonwealth v. Bird, Mr. Justice Jackson, speaking for the Supreme Court of Massachusetts in a case in which it was contended that the State legislature could not revoke an exemption from militia duty, said, “ We are not prepared to say that any one set of legislators can control their successors to this extent in a case of such vital importance to the Commonwealth.” And yet he adds, “ There may undoubtedly be cases in which it might be deemed a breach of the public faith to revoke such exemptions." To us it seems that such prerogatives as the power of imposing taxes and compelling the military service of subjects, are not only not within the intention of the prohibition in the Constitution, but that contracts in respect of them must, from necessity, be political questions, and, therefore, not properly cognizable by any court.
A great doubt has indeed been expressed, notwithstanding these decisions in regard to taxation, whether a State can contract away its right to take private property for public uses, known by the clumsy appellation of the law of eminent domain, or the police power, so called, to which all property is liable. But neither of these prerogatives, important as they are, is so essential to the existence of government as the right of taxation. Give a State the power to tax property to an unlimited extent, and there would be very few cases in which it could not by purchase procure all the private property needed for public uses, however ruinous in a pecuniary point of view the want of power to take it might be. The State could exist without it; and so it might without the police power. And yet in regard to either of these, and especially the latter, an irrevocable contract of exemption would seem, from its mere statement, to be little better than an absurdity. Imagine, for example, a contract that a man's house shall never be liable to be pulled down to stop a fire! We can well conceive what little respect would be paid to such a contract, and with what supreme contempt the public would regard the constitutional lawyer who should warn the authorities against breaking it. And yet this, in its consequences, would not be so unreasonable as a contract exempting property from taxation.
1 12 Mass. 443, 446. 2 Cooley on Const. Lim. 280 et seq., and cases cited.
We are not arguing now against the policy of the States exempting certain property held for religious and charitable purposes from ordinary taxes. That is a question which each State must determine for itself. We are simply arguing that the whole subject is one which from its nature can never be the subjectmatter of a contract within the meaning of the Constitution, or within any practical meaning which the word has in courts of justice. The decision in New Jersey v. Wilson, however, although condemned by a large part of the profession, and although it has been submitted to by the States, not without murmuring, has been steadily maintained by a majority of the court against a protesting minority. And we regret to perceive that the doctrine has recently been reaffirmed, seemingly without dissent. We do not believe, however, that the question is yet settled, nor can we doubt what the ultimate decision will be.1
We have thus traced the history of the clause (at the risk of being tedious) from its birth in the ordinance of 1787 up to the time when its protection was invoked for the charters of corporations. We have seen how it had grown from a prohibition on interference with private contracts into one including engagements made by the sovereign in respect of sovereign prerogatives. By this time, Judge Wilson, had he been living, would hardly
· 1 In New Jersey v. Wilson, the State of New Jersey did not deny the validity of the agreement, but only contended that it did not follow the lands into the hands of the purchasers. In Gordon v. Appeal Tax Court, 3 How. 133, the doctrine was assumed by the court and not denied by counsel. In State Bank of Ohio v. Knoop, 16 How. 369, the question was first really adjudicated, Catron, Daniel, and Campbell, JJ., dissenting. In Home of the Friendless and Washington University v. Rouse, 8 Wallace, 430, 439, it was again affirmed, Chase, C. J., and Miller and Field, JJ., dissenting. In Washington Railroad v. Reid, 13 Wallace, 264, it was reaffirmed, being treated as res adjudicata.
have recognized his handiwork. But a decision was to come which extended it even further, and which, although it was no more important in principle than New Jersey v. Wilson, has turned out to be infinitely more so in fact, from its far-reaching application and from its practical limitations upon the rights of government.
Most lawyers read the Dartmouth College.case while studying law, and when they are no more likely to question it than they were to question the precepts of the Bible when taught them by their mothers. Few read it afterwards except to extract an argument or illustration from-it; and very few indeed investigate the principles and precedents upon which Mr. Webster and the judges based it. Even within recent years, when its inconvenience is severely felt, most of those who censure it assume that the court could hardly have escaped the conclusion it reached. Our examination of it, therefore, may give most of our readers some information, even if they fail to see the force of our reasoning. As the charter of the college was granted by George the Third, the whole inquiry turned on the question, what was the engagement that the King, as representative of the nation, entered into in its behalf? This depended upon the nature of corporate bodies of the character of Dartmouth College, under the law of England at that time ; and if the judges erred in their conclusions in this respect, then their whole superstructure falls to the ground.
It will only be necessary to make a brief statement of the case, in order to show the questions involved in this discussion.
In 1769, George the Third granted a charter, which recited that Dr. Eleazar Wheelock had established at his own expense a charity school for the instruction of Indians in the Christian religion; that he had appointed an agent to solicit contributions in England for carrying on and extending the charitable work, and had constituted the Earl of Dartmouth and others trustees of the moneys which had been and should be contributed to him, and had authorized them to fix on a site for the college; that they determined to establish the school in the western part of New Hampshire; that Dr. Wheelock had applied for a charter ; and in consideration of the premises the charter was granted, constituting the trustees of said college a body politic, to be known by the name of the Trustees of Dartmouth College, with
power to acquire real and personal property, and to pay the president, tutors, and other officers, such salaries as should be allowed; that the said Dr. Wheelock should be the “founder of said college," and should be the president thereof, with power by his last will to appoint a successor until such appointment shall be disapproved by the trustees; the trustees to have power to appoint and displace the officers thereof, to make ordinances, orders, and laws for the government of the college, the same not being repugnant to law, and not excluding any person of any religious denomination whatsoever on account of his speculative sentiments in religion.
The charter contained the technical words that we, “ of our special grace, certain knowledge, and mere motion, ... for us, our heirs and successors, will, give, grant, and appoint that the said trustees and their successors shall forever hereafter be, in deed, act, and name, a body corporate and politic.” And all the privileges were given them to act “in as full and ample a manner, to all intents and purposes, as a natural person or other body politic or corporate is able to do by the laws of our realm of Great Britain or of our said province of New Hampshire.” The charter also granted unto the college the right to “grant any such degree or degrees to any of the students of the said college, or any others by them thought worthy thereof, as are usually granted in either of the universities or any other college in our realm of Great Britain."
The charter was accepted; and the property which had been given was conveyed to and vested in the corporate body. It is probable that the Earl of Dartmouth and others in England were, in fact, the largest contributors; but the charter recites that Dr.. Wheelock himself was the founder of the college. The college continued to be governed by this charter until 1816.
The nature of the corporation established by the charter of the king is a matter about which there can be no dispute. It was an eleemosynary corporation, administering a public charity. Wheelock, as founder, would have had a right by the laws of England to be visitor; and his visitatorial authority would have descended to his heirs in default of there being any other appointed. He, however, did not retain any such right. The trustees were made both trustees and visitors, as is usual in colleges in this country, and there was no body or person outside