The 1891 Trustee Resolution was not a contract
Let us consider an “urban legend” that has recently emerged at Dartmouth: That the 1891 resolution adopted by the Board of Trustees of Dartmouth College, providing for alumni nomination of a number of Trustees, is a “contract” or “agreement” to which the Trustees are bound in perpetuity.
The 1891 resolution was just that–a resolution of the Board, and the Board remains free to enact a superseding resolution whenever it decides to do so. Indeed, not only does the Board have the authority to alter the selection of Trustees, it has the obligation to do so if it concludes, in the exercise of its fiduciary responsibilities, that the current process is not serving the interests of the College. Like the trustees of other charitable organizations, the Trustees of Dartmouth College have plenary authority to establish mechanisms of governance as long as these mechanisms are consistent with its Charter and with state and federal law.
The Charter of Dartmouth College provides that upon a vacancy on the Board of Trustees, the remaining “trustees and their successors … [shall], as soon as may be after the [vacancy occurs], elect and appoint such trustee or trustees [in replacement].” The Trustees thus have ultimate authority and responsibility for selecting their successors. No resolution of the Board can deprive them of this power and responsibility.
Since 1891, the Trustees have proceeded on the understanding that it is in the interest of the College for alumni to nominate half of the (non ex-officio) seats on the Board for election by the Trustees. But this arrangement no more binds the Board in the future than did the earlier arrangements–from the founding of the College in 1769 until the late 19th century–under which there was no process for alumni nomination of Trustees.
I do not know where the Board’s current review of College governance will lead. I do know that if the Board resolves to modify the Trustee selection process, this will not be the first time that it would have decided, by adoption of a resolution, to change a fundamental aspect of the governance or other practices and policies of the College. Indeed, the 1891 resolution was itself such an occasion, by its terms superseding a prior plan adopted in 1876.
Even more significantly, the decision that the College should become coeducational beginning in 1972 was accomplished by the Trustee resolution of November 21, 1971 to “matriculate women as candidates for the A.B. degree.” This November 1971 resolution superseded an April 1971 resolution to pursue the possibility of an “associated school” for women undergraduates–a policy dearly favored by some alumni–and rescinded a policy of single-sex education at the College that was more than two centuries old and that many alumni (both those contributing funds to the College and others) might have reasonably expected to endure in perpetuity.
Whatever the expectations of alumni or others may be, the Trustees always retain authority and responsibility to adapt to changing circumstances–as they did in 1891 and in 1971, and as they do today.
The 1891 Resolution
The resolution adopted by the Trustees on June 23, 1891, stated in Part I that
“the graduates of the College, the Thayer School, and the Chandler School, of at least five years standing, may nominate a suitable person for election to each of the five trusteeships next becoming vacant on the board of trustees of the college (excepting those held by the Governor and the President) and may so nominate his successor in each trusteeship.”
Part II provided that the Trustees would take no “action to fill” these five trusteeships (and their successors) “until the expiration of three months after notice to the Secretary of the Alumni of the occurrence of such vacancy, unless a nomination therefore shall be sooner presented by the Alumni.” Part III of the 1891 resolution by its terms recognized that this new plan of alumni nomination superseded a previous plan for alumni nomination of Trustees that had been adopted in an 1876 Board resolution.
The Association of Alumni accordingly amended its constitution to create a “Committee on Alumni-Trustees” to select candidates for each vacancy and to establish a process of alumni balloting. The new constitution specified that each alumni-nominated Trustee would “be nominated for a term of five years” and was “expected to resign” at the expiration of this term, although trustees not nominated by the alumni continued to serve life terms until 1970.
An August 3, 2007 column in The Dartmouth by my fellow law-professor Todd Zywicki (a present Trustee) refers to the 1891 resolution as an “agreement,” a “deal,” and a “partnership.” If Professor Zywicki means to suggest that this resolution was a contractual undertaking, he is mistaken. As Leon Burr Richardson’s History of Dartmouth College makes clear, the 1891 resolution was a political response to diffuse political tensions that existed at the time–in particular, the conviction on the part of leaders of the Association of Alumni that the College Trustees (all of whom were serving life terms) were too conservative and parochial in their theology and their educational policies; that there were too many New Hampshire residents on the Board; and that the College was in need of fresh ideas, fresh blood, and new resources.
After several decades of debate and expressions of alumni concern, the Trustees in 1891 were persuaded that formal alumni nomination of five Trustees, as sought by the leaders of the Association, could bring about desired ends. The 1891 plan adopted by the Dartmouth Trustees was similar to those adopted by Yale, Amherst, and Williams, where they were “believed to have given general satisfaction”–this according to an 1890 Report of the Association of Alumni’s “Alumni Representation Committee,” which met with a coordinate committee of the Trustees to devise a plan for alumni nomination of Trustees.
On two occasions after 1891, most recently in 2003, the Board amended the 1891 resolution to increase the number of Trustees nominated by the alumni, as the total size of the Board increased. On neither occasion was the approval of the Association of Alumni sought or obtained.
The Historical Record Shows There Was No Contract
A contract requires (1) parties legally able to enter into a binding agreement, (2) consideration provided by each party, and (3) definite terms (so that each party may know what is expected of it). Professor Zywicki’s contract theory (“it is an agreement,” he asserts) is apparently this: That in 1891, the consideration provided by the Board was that alumni could elect half of the Trustees, while the consideration provided by the alumni (“in return”) was “generous financial support and loyalty” (to use Professor Zywicki’s terminology).
This argument is without legal merit. The historical record does not support the notion that either the Trustees or the Association of Alumni thought they were entering into such an arrangement in 1891, much less a contract that would be permanently binding on the Trustees. Nothing in that record, including the reports to the Association of Alumni by its Alumni Trustee Committee, suggests that the alumni in 1891 assumed an obligation to infuse the College with additional “financial support” or yet more loyalty, at that moment or in the future. In all the correspondence and discussions leading to the 1891 resolution that I have reviewed, there is no reference to a contract of any kind and nothing from which one could infer that the “parties” intended to enter into a reciprocally binding legal arrangement.
As an historical footnote, I note that the discussions leading up to the 1891 resolution may be contrasted with a proposal made by a group of alumni in 1869, when, according to Richardson’s history (p. 579), some alumni “perceived that Dartmouth was in serious need of money.” As Richardson recounts (p. 580), “Plans were formulated to institute a campaign to raise $200,000, should the objections of the alumni to some features of college management be satisfied.” The changes sought included that “a minority of the trustees should be elected upon nomination by the alumni, to hold office for a limited term.” The Trustees did not agree to the proposal, and as noted above, nothing in the later history of Dartmouth suggests such a quid pro quo regarding alumni nomination of Trustees.
To the contrary, the contemporaneous historical record reveals that the members of the alumni body who were active in persuading the Trustees to provide for alumni nominations in 1891 believed that they or others whom the alumni would nominate would be better Trustees than the members of the Board whom they would replace. They were also hopeful that nominating five Trustees each with a five-year term of office would ensure continuous replenishment of the Board as well as increase interest among alumni in the affairs of the College. The Trustees who voted for the 1891 resolution were likewise animated not by contractual promises or personal benefit, but by what they thought would be best for Dartmouth–including, to be sure, better relations with the alumni and the prospect of greater alumni contributions to the College. They were right, at least for a time. As Richardson, writing in 1932, concluded (p. 660):
The members of the board who, in the lapse of forty years, have been elected by the graduates have invariably proved themselves to be worthy of the honor … . [E]lectioneering has been almost absent and alumni bitterness and dissension entirely so.
Of course, even if participants in 1891 had thought they were entering into some sort of “agreement” or even if they thought the College was “promis[ing]” (Professor Zywicki’s words) alumni selection of half the Trustees, they clearly recognized that the Trustees retained authority to rescind the 1891 resolution in the future. The only way to “bind” the College to any new arrangement for selection of some Trustees would be to amend the College’s Charter–something that could be done, as the Supreme Court held in The Dartmouth College Case (1819), only by enactment of legislation by New Hampshire and approval by the Trustees of the College.
The Law Confirms There Was No Contract
The law confirms the absence of a “contract” in the 1891 resolution. First, the Association of Alumni is an unincorporated association without capacity to contract. See Shortlidge v. Gutoski** [Editor’s note: Now available online]**, 125 N.H. 510 (1984).
Secondly, even if alumni leaders in 1891 had explicitly assured continued financial support (from themselves? from all current alumni? from future alumni?), such a promise would be too indefinite to constitute legally binding consideration for an enforceable contract. No contract can exist unless a court has the ability to determine whether a party is in breach and, if so, the amount of damages. Nothing in the 1891 resolution, in the proceedings of the Association of Alumni, or in Richardson’s history provides any basis for a metric by which a court could determine the quantum of “generous financial support” (Professor Zywicki’s term, not appearing, in any form, in the historical record of the 1891 resolution) that was allegedly promised by the alumni.
It is equally far-fetched to claim that the Board is bound by the 1891 resolution in perpetuity because “the alumni” (which alumni? all of them? some of them?) have relied on these arrangements in one way or another. It would be well-nigh impossible for any graduate of the College to claim, much less prove, that financial contributions to Dartmouth were made in the expectation that alumni would in perpetuity nominate half of the members of the Board of Trustees. But even if such a claim could be asserted with a straight face, no court on that basis would enjoin the Trustees, in the exercise of their fiduciary responsibilities, from superseding their own resolution (as amended in 1961 and 2003)–any more than a court in 1972 would have enjoined the Trustees from admitting women to the College on the basis that a contributor to the College “relied” on its historic commitment to single-sex education.*** * ***
The 1891 resolution was not a contract with the alumni or with anyone else. Whatever process for Trustee selection the Board has adopted by resolution, it can modify or supersede by resolution. Apart from true contracts and amendments to the Charter, the Trustees acting by resolution cannot bind their successors. Were it otherwise–if the sentiments of the Board at any one time could bind future Boards in perpetuity–Dartmouth (or any institution) would be severely hampered in addressing new conditions and challenges. As detailed in the archives of such governance debates, institutions must retain the flexibility to evolve their practices as circumstances change.
