Pennsylvania College Cases, 80 U.S. 190 (1871)
U.S. Supreme CourtPennsylvania College Cases, 80 U.S. 13 Wall. 190 190 (1871)
Pennsylvania College Cases
80 U.S. (13 Wall.) 190
The Legislature of Pennsylvania chartered a college "at Canonsburg," by the name of the Jefferson College, "in Canonsburg," giving to it a constitution and declaring that the same should "be and remain the inviolable constitution of the said college forever," and should not be "altered or alterable by any ordinance or law of the said trustees or in any other manner than by an act of the Legislature" of Pennsylvania. The college, becoming in need of funds, put into operation a plan of endowment whereby, in virtue of different specific sums named, different sorts of scholarships were created -- one, ex. gr., by which on paying $400, a subscriber became entitled to a perpetual scholarship, capable of being sold or bequeathed, and another by which, on payment of $1,200, he became entitled to a perpetual scholarship entitling a student to tuition, room rent, and boarding, this sort of scholarship being capable, by the terms of the subscription, of being disposed of as other property. But nothing was specified in this plan as to where this education, under the scholarships, was to be. On payment of the different subscriptions, certificates were issued by the college certifying that A. B. had paid $___, which entitled him "to a scholarship as specified in the plan of endowment adopted by the trustees of Jefferson College, Canonsburg," &c. An act of legislature in 1865, by consent of the trustees of the college at Canonsburg and of the trustees of another college at Washington, Pennsylvania, seven miles from Canonsburg, created a new corporation, consolidating the two corporations, vesting the funds of each in the new one, and in their separate form making them to cease, but providing that all the several liabilities of each, including the scholarships, should be assumed and discharged without diminution or abatement by the new corporation. Notwithstanding the act of assembly, the collegiate buildings, &c., of Jefferson College were left at Canonsburg, and certain parts of the collegiate course were still pursued there, the residue being pursued at Washington College, Washington. Subsequently, in 1869, the then existing Constitution of Pennsylvania (one adopted in 1857, allowing the legislature of the state "to alter, revoke, or annul any charter of incorporation thereafter granted, whenever in their opinion it may be injurious to the citizens, . . . in such
manner, however, that no injustice shall be done to the corporators") being in force, a supplement to this act of 1865 was passed, "closely uniting" the several departments of the new college created by the act of 1865 and authorizing the trustees of it to locate them either at Canonsburg, Washington, or some other suitable place within the Commonwealth, they giving to whichever of the two towns named, had the college taken away from it, or to both if it was taken away from both, an academy, normal school, or other institution of a grade lower than a college, with some property of the college for its use. Held that the Legislature of Pennsylvania, by its act of 1869, had not passed any law violating the obligation of a contract.
On the 15th of January, 1802, the Legislature of Pennsylvania incorporated a college in the western part of Pennsylvania known as Jefferson College. The title of the act was, "An act for the establishment of a college at Canonsburg, in the County of Washington, in the Commonwealth of Pennsylvania."
The preamble set forth that "the establishment of a college at Canonsburg," &c.,
"for the instruction of youth in the learned languages, in the arts and sciences, and in useful literature, would tend to diffuse information and promote the public good."
The statute in its enacting part proceeded:
"SECTION 1. That there be erected and hereby is erected and established in Canonsburg &c., a college &c., under the management, direction, and government of a number of trustees, not exceeding twenty-one,"
"SECTION 2. The said trustees and their successors shall forever hereafter be one body politic and corporate, with perpetual succession in deed and in law, to all intents and purposes whatever, by the name, style, and title of 'The Trustees of Jefferson College, in Canonsburg, in the County of Washington.'"
There was given to the trustees the usual corporate powers, with all other powers &c., usual in other colleges in the United States.
Section 3d provided for meetings of the trustees, "at the
Town of Canonsburg," for making bylaws and ordinances for the government of the college &c., principal and professors &c.
Section 5th provided for the succession in the trustees, how misnomers in gifts or grants by deeds, or in devises or bequests, should be treated, adding,
"And the Constitution of the said college herein and hereby declared and established, shall be and remain the inviolable Constitution of the said college forever, and the same shall not be altered or alterable by any ordinance or law of the said trustees, nor in any other manner than by an act of the legislature of this Commonwealth."
In pursuance of this act, the Jefferson College was established. Several buildings for a college were erected. The state made donations to the institution from time to time, and from these or other sources a library, as also a chemical and astronomical apparatus, was brought together.
In the year 1806, the same legislature incorporated another college, establishing it at the Town of Washington, just seven miles from Canonsburg, where the former college had been established. Thus, although in the faculties of both colleges there have been from time to time professors of eminent ability and learning, and though from both colleges have come men who have done honor to the institutions in which they were reared, it yet came to pass -- with the multiplicity of colleges throughout the state -- that these two, so near to each other, slenderly endowed and in a part of Pennsylvania until quite late times neither rich nor populous, never thrived; on the contrary, rather labored with existence. Accordingly, in 1853, the trustees of Jefferson College put into operation a plan of endowment whereby on the payment of $25, the subscriber to the plan became entitled to a single scholarship; on the payment of $50, to a family scholarship; on the payment of $100, to tuition for thirty years; on the payment of $400, to a perpetual scholarship, to be designated by whatever name the subscriber might select, it being provided that such a scholarship might be disposed of by sale or devised by will as any other
property; by the payment of $1,200, to a scholarship in full, entitling the holder to the tuition, room rent, and boarding of one student in perpetuity, it being provided that such a scholarship might be disposed of as any other property. But in this "Plan of Endowment," as the paper proposing it was called, nothing was said of education at Canonsburg specifically, though it was declared that when $60,000 were subscribed, "the trustees of the college should issue certificates guaranteeing to the subscribers the privileges above enumerated." Of these various scholarships upwards of 1,500 were sold. To each of the subscribers to this plan of endowment a certificate in this form was issued under the seal of the corporation:
"Endowment Fund of Jefferson College, Pennsylvania"
"This certifies that A. B. has paid _____ dollars, which entitles him to the privileges of a _____ scholarship, as specified in the Plan of Endowment adopted by the trustees of Jefferson College, in Canonsburg, in the County of Washington, transferable only on the books of the college, personally or by attorney, on presentation of this certificate."
"Witness the seal of said corporation and the signatures of the president and secretary thereof, at Canonsburg, the ___ day of _____, A.D. 185."
"WILLIAM JEFFREY, President"
"JAMES McCULLOUGH, Secretary"
But this scheme did not prove an entirely wise one, for though it procured a certain amount of money for an endowment fund, it brought upon the college a large body of students to be educated at rates entirely too low, and the college was deprived of its former resources of tuition fees -- always very small, but still much greater than the interest on the sum which now entitled a student, and even a whole family of students, to be educated without paying anything. Thus it was with the Jefferson College, at Canonsburg. The other college, at Washington, adopted apparently some similar
scheme and flourished no more than the Jefferson. Both colleges during the rebellion fell into a condition of debility undesirable for seats of learning. [Footnote 1]
In this state of things, there having been a proposition to make a union of the colleges, a convention of the alumni of both was held at Pittsburg, September 27, 1864, and the members of this convention having "discussed in a candid and fraternal spirit the proposed union of the colleges," passed a series of resolutions, of which this was the first:
"That we see the hand of Providence pointing to the union of the two ancient colleges, whose sons we are, and fixing the present as the time for the happy consummation by such evident facts as these: the great and constantly increasing number of literary institutions in the land; the urgent need in Western Pennsylvania of an eminently influential and richly endowed college; the desire for a union of Jefferson and Washington, so generally entertained, and so frequently and earnestly expressed; the proximity of the said colleges, soon to be made more apparently by the completion of a connecting railway; the very unsatisfactory condition of their antiquated buildings; the reduced number of students, partly the result of our national troubles; the inadequacy of the old salaries to meet the demands of the times and afford the professors a competent support; the difficulty of obtaining aid for either institution in its separate existence; the several offers made by liberal and reliable men to furnish large amounts of funds in case a union is effected, and depending also upon that event; the probable donation by our legislature of a valuable grant of lands given by Congress to the state for the advancement of agricultural knowledge."
The convention then went on and recommended a plan of
union for the two colleges and the procuring of appropriate legislation to effect the consolidation.
The matter in its general aspect was assented to by the boards of trustees of the respective colleges, and in the following year, March 4th, 1865, an act was passed by the Legislature of Pennsylvania to carry out a union.
The title of the act was, "An act to unite the colleges of Jefferson and Washington, in the county of Washington, and to erect the same into one corporation, under the name of Washington and Jefferson College."
Its preamble recites that
"the trustees of those colleges (Jefferson and Washington) have agreed upon a union thereof, and have besought this General assembly to give thereto the sanction and aid of a legislative enactment."
Section 1 united the two colleges into one corporation by the name aforesaid.
Section 2 vested all the property and funds of each in the new corporation,
"and all the several liabilities of said two colleges or corporations, by either of them suffered or created, including the scholarships heretofore granted by and now obligatory upon each of them, are hereby imposed upon and declared to be assumed by the corporation hereby created, which shall discharge and perform the same without diminution or abatement."
Section 3 declared the objects of the corporation and provided how the trustees were to be selected and continued, and prescribed their powers and duties.
Section 10 directed that there should be four periods or classes of study, denominated the freshman, sophomore, junior, and senior classes.
Section 11 created two additional departments of study, the scientific and preparatory; the first to qualify students for business avocations, the second for admission to the first, or to the freshman class of the college.
Section 12 provided prospectively for an agricultural department.
Section 13 declared
"that the studies of the senior, junior, and sophomore classes shall be pursued at or near Canonsburg, in the County of Washington, and those of the freshman
class and of the preparatory, scientific, and agricultural departments at or near Washington, in said county,"
and provided how the income of endowment funds should be apportioned &c.
Section 14 committed the instruction and government of the three higher classes named, to the president and professors of those classes, and the instruction and government of the freshman class and the departments, to the vice-president and professors, or instructors of their appropriate studies &c.
Section 18 enacted:
"That from and after the organization of the corporation hereby created, as herein provided, the Colleges of Jefferson and Washington, named in the first section of the act, shall be dissolved, except so far as may be found necessary to enable them to close up their business affairs and to perfect the transfer of their property and rights to the corporation by this act created."
When this new act was passed (A.D. 1865), the then existing or amended Constitution of Pennsylvania, [Footnote 2] adopted in 1857, was in force. That constitution provided that:
"The legislature shall have power to alter, revoke, or annul any charter of incorporation hereafter conferred by or under any special or general law, whenever, in their opinion, it may be injurious to the citizens of the Commonwealth, in such manner, however, that no injustice shall be done to the corporators."
Under the act of assembly of 1865, a new state of things as prescribed by it was set in operation. But the good effects anticipated from a union on this plan did not come. The new college did not thrive. And in 1868, another convention of alumni was held in which various resolutions were passed, among them one expressing
"the conviction of the convention that a complete consolidation of the two departments should be immediately effected, so as to have them occupy buildings situated in the same place."
And in consequence of this the board of trustees of the college,
through a series of committees, took the matter into consideration, the result of the whole being the recommendation of further legislation, in the direction pointed out by the convention of the alumni.
"A supplement" to the Act of March 4, 1865, was then, February 26, 1869, passed. Section 1 enacted
"that as soon as the necessary preliminary arrangements could be made and suitable buildings provided, several departments of Washington and Jefferson College should be closely united, and located either at Canonsburg, Washington, or some other suitable place within this commonwealth, to be fixed by the vote of not less than two-thirds of the trustees,"
Section 5 provided for an "academy, normal school, or other institution of lower grade than a college," to be given by the trustees to the unsuccessful one of the two places named, or to both, if the college is taken "elsewhere," with some real or personal property of the college for the use of such academy &c.
Section 6 made it
"lawful for any incorporated college or institution of learning, within this commonwealth, to unite with Washington and Jefferson College, and consolidate their property and funds for educational purposes, on such terms and conditions as may be agreed upon."
With the exception that this act obliged the college to be fixed somewhere in the state of Pennsylvania, it followed the exact language of a draft which had been prepared by the committee of the board of trustees of the college, and reported to it as advisable. This draft had been approved without dissent by the board, twenty-five members out of thirty-one composing it being present at the meeting; and a committee had been appointed by it to visit Harrisburg and procure its enactment.
After the supplement was obtained, it was accepted by the board, and the whole college fixed at Washington, with more effective means of education, including an endowment of $50,000, made by people of that place on condition that the whole college should be so fixed.
In this state of things, six persons (with whom afterwards
one hundred and eight others asked to become, and were admitted, co-plaintiffs), holders of the scholarship certificates, issued as already mentioned by the trustees of Jefferson College, in 1853, filed a bill in equity, in the Supreme Court of Pennsylvania, against the two corporations, wherein they set forth the incorporation of Jefferson College at Canonsburg, the buildings it had erected, and the gifts and endowments which it had received and possessed; that in 1853, the trustees of the college devised and put in operation the plan of endowment already mentioned, and evidenced by certificates of scholarship, issued by them, under the corporate seal &c.; whereby, tuition &c., in said college, was granted to the holders, they paying into the corporate Treasury therefor various sums of money, according to the grade or quantity of the scholarship, specifying it all as already stated on page 80 U. S. 192; that one thousand five hundred of these certificates were issued, of which one thousand two hundred were yet outstanding; that the complainants,
"residents of Canonsburg and its vicinity, relying upon the good faith of the said trustees, and the perpetuity of said college at Canonsburg, bought and still held such certificates of scholarships, believing that thereby they could have their sons or descendants educated at said college, in Canonsburg, without the expense and risk of sending them from home;"
that on March 4, 1865, the Legislature of Pennsylvania passed the act already mentioned as of that date (reciting it), and on the 26th of February, 1869, "a supplement" to the said act of 1865 (reciting the supplement); that the trustees of Jefferson College in Canonsburg &c., had accepted the said act of 1865, and had joined in uniting said two colleges, and had removed the freshmen class and the preparatory and scientific departments from Canonsburg to Washington, seven miles distant; and that the trustees of the college called "Washington and Jefferson College," formed under the act of 1865, were about to remove the college library, apparatus, classes, and professors from Canonsburg to Washington, and to dispose of the college buildings &c., at Canonsburg, so as to deprive the plaintiffs of the tuition &c., agreed to be
there given to them; and that the defendants justified the proposed action, under the supplement of 1869; that the said scholarship certificates constituted subsisting contracts between the complainants and the trustees of Jefferson College, in Canonsburg &c., entitling them to have the granted tuition &c., at that place, in the college there; and that if said acts of 1865 and 1869 were to have effect, they would be irreparably injured, and the contracts impaired; that said acts of 1865 and 1869 were invalid and unconstitutional, because impairing the obligations of subsisting contracts; and therefore repugnant to the 10th section of the first article of the Constitution of the United States, which declares that no state shall pass any law "impairing the obligation of contracts."
The prayer of the bill accordingly was:
1. That said acts of 1865 and 1869 be declared null and void, as repugnant to the said prohibitions, in that they undertook to change the location of the said college, its classes, buildings, and property, from Canonsburg to Washington, or elsewhere.
2. For injunction against making such change or removal.
The case came up on bill and answer. There was no dispute about facts. The question was the validity of the "supplemental" act of 1869; the question, namely, whether the contract of scholarships between the complainants and others and Jefferson College, did not interpose a constitutional barrier to any legislative grant of authority to the trustees of the college to surrender its former charter and accept a new one, by which the college was eventually removed from Canonsburg to Washington, in the same county.
At the same time was filed in the same court another bill; one by "the trustees of Jefferson College in Canonsburg, in the County of Washington" (the old corporation of 1802), against "Washington and Jefferson College" (the corporation of 1865), setting out their old charter of 1802, gifts and donations to carry it out, and specially $5,000 given, bequeathed by benevolent persons to the complainants as a permanent fund, to be kept separate from other funds, for educating
poor and pious young men; the scholarships &c., all much as in the preceding case.
There was also filed a third bill by five persons, "members of the boards of trustees of Washington and Jefferson." Their complaint being more especially of the supplement of 1869, and of its impairing the obligation of the contracts raised by the act of 1865. All three bills originated apparently in one view, and had apparently one purpose, the different forms of effort being resorted to, the one in aid of the other; and so that if one form of proceeding was found open to fatal objection, one or both of the others might be resorted to with better prospect of success.
The Supreme Court of Pennsylvania, after a full consideration of the case (Thompson, C.J., delivering its judgment), dismissed all the bills, holding in effect:
1st. That the legislation complained of did not, in point of fact, infringe the said contracts.
2d. That even if the contracts were so affected by the legislation, yet their obligation could not be said to be impaired in a legal sense, because the acceptance of the legislation by the trustees of Jefferson College concluded the complainants; and also, 3d, because the acts of assembly in question were passed by the Legislature of Pennsylvania, in the exercise of a power so to do, reserved (as to the act of 1865) in the original charter of Jefferson College and (as to the act of 1869) given by the amended Constitution of Pennsylvania.