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Trustees of Rutgers College v. Richman

Decided: August 3, 1956.

THE TRUSTEES OF RUTGERS COLLEGE IN NEW JERSEY (A BODY CORPORATE AND POLITIC HERETOFORE DESIGNATED THE STATE UNIVERSITY OF NEW JERSEY), AND JOHN H. BOSSHART, CHARLES H. BROWER, ROBERT A. COOKE, MARIE H. KATZENBACH, ROSAMOND S. MOXON, ROY F. NICHOLS, CARROL M. SHANKS, LANSING P. SHIELD, FREDERIC W. SMITH, HOWARD A. SMITH, TRACY S. VOORHEES AND RALPH P. WHITE, INDIVIDUALLY AND AS MEMBERS OF AND REPRESENTATIVES OF THE MEMBERSHIP OF THE BOARD OF TRUSTEES OF THE CORPORATE PLAINTIFF AND AS MEMBERS OF A SPECIAL COMMITTEE OF THE BOARD ON THE REORGANIZATION OF THE BOARD OF TRUSTEES, PLAINTIFFS,
v.
GROVER C. RICHMAN, JR., ATTORNEY-GENERAL OF THE STATE OF NEW JERSEY, ROBERT L. FINLEY, ACTING AND DEPUTY TREASURER OF THE STATE OF NEW JERSEY, AND THE STATE BOARD OF EDUCATION, DEFENDANTS



Schettino, J.s.c.

Schettino

Plaintiffs move for summary judgment on the record which comprises the amended and supplemental complaint, with exhibits annexed; the answer thereto; affidavits of nine individuals; a certified copy of the corporate plaintiff's charter and all amendments thereto; a certified copy of Charter Provisions and Rules and Regulations (1951 edition); and the text of chapter 61 of the Laws of 1956.

HISTORY, NATURE AND ORGANIZATION OF RUTGERS

Rutgers University has its origin in Queen's-College, chartered by George III of Great Britain in 1766 in response to a petition of Dutch settlers of New York and New Jersey. It was organized under an amended charter dated March 20, 1770, and instruction commenced in 1771, at New Brunswick.

The original charter provided:

a. The right and power to establish and conduct a college

"For the education of youth in the learned languages, liberal and useful arts and sciences, and especially in divinity; preparing them for the ministry and other good offices";

b. The provision that the President shall be a member of the Dutch Reformed Church;

c. The incorporation of the Trustees in perpetuity, under the name "Trustees of Queen's-College in New Jersey," with appropriate corporate powers;

d. Full power in the Trustees over the government of the college, to make "ordinances, orders and laws" for the government of the college, and to execute the same;

e. Election by the Trustees of a President, a Professor of Divinity, professors and tutors, treasurer, the clerk, the steward, and other inferior officers and ministers to serve during the pleasure of the Trustees;

f. The membership of the Trustees, originally consisting of the Governor or Commander-in-Chief, the President of the Council, the Chief Justice and the Attorney-General of the colony for the time being, and 37 named Trustees of the Colony of New Jersey and the Provinces of New York and Pennsylvania, without stated term, with power in

"The said Trustees, or any twelve, or greater number, * * * to elect * * * any number of persons or trustees, at any, and upon any vacancy, so that the whole number of trustees do not exceed forty-one, and that not above one-third of the said number, at any time, be of those ordained ministers of the gospel."

After the American Revolution the charter was amended and confirmed by the State of New Jersey in 1781 upon petition of the Board of Trustees, an interesting change being the removal of the one-third restriction upon ordained ministers as trustees. Wilson's Laws, p. 192. Again in 1799 upon the Board's petition the charter was amended in minor respects and confirmed. Paterson's Laws, p. 384. In 1825 the name was changed to "The Trustees of Rutgers

College in New Jersey" in recognition of Colonel Henry Rutgers, a generous donor, and the charter was amended in minor respects. L. 1825, p. 44.

Originally the trustees were shackled by a limit that the institution's property holdings could not exceed $: 3,000 sterling yearly value. This limitation was raised to $100,000 by L. 1869, c. 224, a limitation since removed by general law. The preamble of this statute recited

"that it is desirable and necessary for the purpose of better carrying out the benevolent and laudable designs of the founders of the institution, and for promoting the liberal views of the state, in regard to the advancement of agricultural science in all its various branches, that the value of the property which the said trustees are authorized to hold, shall be increased."

For the purpose of complying with the so-called "First Morrill Act," 12 Stat. 503 (1862), 7 U.S. Code, secs. 301, 304 (1946), the New Jersey Legislature, by the Laws of 1864, chapter 369, designated the Rutgers Scientific School, a department of the college, as the "New Jersey Land Grant College"; and it was thereafter referred to as the "Agricultural College," or by similar terminology. As such it was made subject to the "general powers of supervision and control" of a Board of Visitors created for the purpose and appointed by the Governor. In 1917, when the Agricultural College was designated the "State University of New Jersey," it continued under the same general powers of supervision and control of the Board of Visitors. L. 1917, c. 32; R.S. 18:22-15.

The formal excision from the charter of all religious and sectarian qualifications both generally and with specific reference to the President's membership in the Reformed Church in America and to the maintenance of a professorship of divinity, was made by Board resolution of 1920.

In 1927 the Board increased the number of ex officio trustees from three to seven by adding the Chancellor, the President of the Senate, the President of the State Board of Education, and the Commissioner of Education for the purpose

of promoting "a closer cooperation in educational work between this institution and the other educational agencies of the State of New Jersey."

In 1928 the Legislature adopted a joint resolution (L. 1928, p. 792) appointing a commission "to examine the existing relations of the State with Rutgers University and to recommend to the present Legislature [or to the succeeding Legislature] such reorganization and means of adequate support as may be deemed to be to the best interests of the State." After hearings and full consideration, the commission reported that "Rutgers has rendered most valuable service to the State in its work of higher public education"; reported against disturbing "radically" the relation between Rutgers and the State and, in particular, against an attempt to create a "distinctive State University" accomplished by a reorganization of the Board of Trustees providing for membership thereon of a majority who should be appointed by the Governor, and recommended that the New Jersey State Board of Regents be created,

"who shall be charged with the care, custody and control of such property as the State now has or shall hereafter acquire at Rutgers or at any other institution of higher education receiving State aid; * * *"

and that the Regents should meet at least once a year

"with the Board of Trustees of said institution in order that it may effect a complete coordination between the Board of the privately chartered institution and its operation as an instrumentality of the State."

This recommendation was enacted into law by Laws of 1929, chapter 76; R.S. 18:22-1. Subsequently the Board's powers were in effect transferred to the State Department of Education. L. 1945, c. 51; L. 1945, c. 211; N.J.S.A. 18:2-1 et seq. , 18:2-1, 1.1.

Chapter 77 of the Laws of 1929, R.S. 18:20-1, as amended by Laws of 1946, chapter 289, N.J.S.A. 18:20-1 forbids the adoption by any educational institution of any title containing the words "New Jersey" or "State" except schools

maintained by the State Board of Education or other state departments and the State University of New Jersey.

Finally, in 1945 Rutgers was recognized by the State and the Board of Trustees as a university, the State University, an instrumentality of the State; and all its parts became subject to a public trust for higher education under the general superintendence of the State Board of Education. See generally L. 1945, c. 49, c. 51 and c. 212; Board Resolution of 1945.

During Rutgers' corporate evolution, its scholastic origin was distinctly classical and professional and we find that the first 50 graduates whose occupations are recorded in the University's General Catalogue of 1916 included 23 clergymen, 9 lawyers, 6 educators, and 3 physicians. Gradually the curriculum broadened to encompass modern languages, the several branches of science (in 1830 a professor of chemistry was appointed), history and the social sciences.

The "First Morrill Act," 12 U.S. Stat. 503 (1862), 7 U.S.C., sec. 301 (1946), required that in the division of Rutgers which was designated as the State's land-grant college "The leading object shall be, without excluding other scientific and classical studies, and including military tactics, to teach such branches of learning as are related to agriculture and the mechanic arts, in such manner as the legislatures of the States may respectively prescribe, in order to promote the liberal and practical education of the industrial classes in the several pursuits and professions in life."

New Jersey by Joint Resolution No. 8, Laws of 1858, requested the State's congressional delegation "to use their best exertions to obtain from the general government a donation of public lands, to this state * * * for the founding and maintaining * * * of an agricultural college for the promotion of the science and practice of agriculture."

The Rutgers Scientific School was designated and did carry out the purposes of that act and receive the federal grants thereunder, L. 1864, c. 369. A further grant of federal aid was made, accepted and used under the "Second Morrill Act" for "instruction in agriculture, the mechanic arts, the

English language and the various branches of mathematical, physical, natural and economic science, with special reference to their applications in the industries of life," 26 U.S. Stat. 417 (1890), 7 U.S.C., sec. 321 et seq. (1946); L. 1891, c. 4.

The New Jersey Agricultural Experiment Station was established in 1880 by the Legislature, L. 1880, c. 106, "for the benefit of practical and scientific agriculture, and for the development of our unimproved lands" and as part of the federal grant-in-aid program, 24 U.S. Stat. 440 (1887), 7 U.S.C., sec. 362 et seq. (1946); L. 1887, c. 16; L. 1888, c. 97. The Experiment Station and associated units carried out research in oyster propagation, sewage disposal and poultry husbandry, analysis of milk, butter and other farm products for the State Department of Health, instruction in ceramics, engineering, chemistry, physics and biology, and extension work in agriculture and home economics. See L. 1945, c. 49.

By various other legislative and corporate enactments Rutgers established the New Jersey College for Women (1918, 1919), now Douglass College, and established, or absorbed other existing schools offering, curricula in aeronautical engineering (1920), education (1923), extension work (1925), pharmacy (1927), evening classes (1934), law (1946), arts and sciences (1946), business (1946), management and labor relations (1947), social work (1947) and microbiology (1949). The inclusion of law, business, and arts and sciences curricula in 1946 resulted from the merger in that year of the University of Newark, which institution had brought about a merger of various other schools in 1936. L. 1946, c. 217; N.J.S.A. 18:22-15.14. The Paterson College was established within the University in 1947 to offer arts and sciences on the undergraduate level. L. 1947, c. 139; N.J.S.A. 18:22-15.16, 15.17. In the same year the State Teachers College was integrated with the University. L. 1947, c. 140; N.J.S.A. 18:22-15.18. The junior college and law school of the College of South Jersey were merged in 1950. L. 1950, c. 116; N.J.S.A. 18:22-15.23.

Federal grants starting in 1864 were made available to Rutgers by the Legislature. They included Rutgers' scholastic activities as the State's land-grant college under the First and Second Morrill Acts and the subsequent federal legislation, including the Hatch Act, 24 U.S. Stat. 440 (1887), 7 U.S.C., sec. 362 et seq. (1946); the Adams Act, 34 U.S. Stat. 63 (1906), 7 U.S.C., sec. 369 (1946); the Nelson Amendment, 34 U.S. Stat. 1281 (1907), 7 U.S.C., sec. 322 (1946); the Smith-Lever Act, 38 U.S. Stat. 372 (1914), 7 U.S.C., sec. 341 et seq. (1946); the Purnell Act, 43 U.S. Stat. 970 (1925), 7 U.S.C., sec. 370 (1946); the Capper-Ketcham Act, 45 U.S. Stat. 711 (1928), 7 U.S.C., sec. 343a (1946); and the Bankhead-Jones Act, 49 U.S. Stat. 436-439 (1935), 7 U.S.C., sec. 329, 343c (1946). From time to time the Legislature has made these various federal grants available to Rutgers. See L. 1864, c. 369; L. 1888, c. 97; L. 1891, c. 4; L. 1895, c. 417; L. 1906, c. 204; L. 1915, c. 155; L. 1925, c. 183; L. 1929, c. 36; and Assembly Concurrent Resolution No. 2, 1936. The amounts range from $46,480 in 1900 to $685,262 in 1956.

Concurrently the State was making its own funds available to the University through the State Agricultural College for various specific purposes, for example, study in ceramics (L. 1902, c. 17; L. 1920, c. 36, cf. R.S. 18:22-41); a short course in agriculture (L. 1905, c. 55, cf. R.S. 18:22-33); and study in aeronautical engineering (L. 1920, c. 21, cf. R.S. 18:22-43). In addition, appropriations were made under the general appropriation acts, the amounts of which range from $34,940 in 1910 to $10,356,303 in 1956. Until 1945 the appropriations were earmarked for the State Agricultural College, the Agricultural Experiment Station and the New Jersey College for Women. From 1945, when the entire University became the State University, L. 1945, c. 49, the appropriations were made generally available.

In 1890 the Legislature established state scholarships, L. 1890, c. 108, to supplement the scholarships which had been provided from the federal grants since 1866. Originally

the amounts payable thereunder were equal to the federal scholarships. L. 1890, c. 108, sec. 3. In 1920 the annual amount of each scholarship was fixed at $200. L. 1920, c. 113. Payments have regularly been made under general appropriation acts; and since 1945 the amounts and administration of the state scholarships have been regulated by contract.

The total operating account for the year ending in 1950 increased 180% over that for the year 1945, and the state appropriations for operations increased in about the same proportion. In 1950-1956 the increase in operating account has been approximately 50%, whereas the state appropriations have increased over 125%. The heavy participation of the State in the increase of the past six years is a striking feature. Over the years 1950-56 the operating account has increased $6,555,166. Of this increase $5,949,000 (or 90.7%) was provided by increased state appropriations, while the University provided only $478,339 (or 7.3%) of the increase from internal sources.

Capital contributions by the State for new plant and facilities of the University, as measured by appropriations, have for the past several years been approximately $2,000,000 per annum, though actual receipts have been lower due to construction schedules. For the past few years, aside from a grant of $3,500,000 to establish the Institute of Microbiology, and a bequest of $1,800,000 to establish a program in government and political science, capital contributions from private sources have ranged from $600,000 to $1,200,000 per annum.

Rutgers is today a university, "an instrumentality of the state for providing public higher education," and its property and educational facilities are impressed with a "public trust for higher education of the people of the State." L. 1945, c. 49, secs. 1, 2; N.J.S.A. 18:22-15.1; 15.2; L. 1956, c. 61, sec. 3, approved June 1, 1956, entitled "Rutgers, The State University Act of 1956."

It is centered in New Brunswick, with branches in more than a score of other municipalities in New Jersey, consisting of 21 colleges and divisions at graduate and undergraduate levels. Rutgers offers higher education in liberal arts through

the University College (in four divisions at New Brunswick, Newark, Paterson and Camden), Douglass College (the women's college), the College of South Jersey, the Graduate School and the General Extension of the University Extension Division, in journalism, chemistry, engineering, education, physical education, military education, pharmacy (including a pharmaceutical extension service), nursing, business administration and ceramics; in agriculture, including the New Jersey Agricultural Experiment Station and an extension service in agriculture and home economics.

On the specialized advance level, instruction is offered by Rutgers in law (including the South Jersey Division), library service, social work, banking, management and labor relations, sales management and retailing.

Rutgers operates the Institute of Microbiology, the Psychological Clinic and Reading Center and the Bureaus of Economic Research, Mineral Research, Government Research and Biological Research, the University Library and the Rutgers University Press.

Rutgers has many millions of dollars worth of facilities and endowments. As of April 30, 1956 Rutgers shows endowment assets at $10,767,000; land, buildings and equipment at $69,330,000; other plant assets at $3,846,000; loan fund assets at $230,000; and current assets at $5,312,000. The total of $89,445,000 is conservatively estimated, for the most part at book value (cost) or on the basis of a 1947 appraisal.

Rutgers' total income for the fiscal year ending June 30, 1955, was $18,887,381. One-half of this amount was appropriated by the State. The endowment funds administered by the Board of Trustees (aggregating $10,483,400 in principal amount at book value exclusive of building funds on June 30, 1955) produced an additional annual income of $407,712. The remainder of the operating income was derived from payments by students of $5,483,593, and payments from other sources of $3,483,300 made up mainly of federal appropriations of $685,262; grants or reimbursements for research of $1,400,000; sundry temporary funds

of $796,000; income from the Rutgers University Press of $170,987; alumni annual giving of $75,000; and miscellaneous operating income.

The current income and expenditure figures for the ten months ending April 30, 1956, are relatively even higher. The partial-year income was $19,469,417, comprised of $10,155,074 of state appropriations; $793,160 of federal funds; $5,539,153 in student payments; $424,657 in endowment income; $64,086 from alumni giving; $108,701 income from the Rutgers University Press; and $2,384,578 from other sources.

The total appropriation for 1955-56 was $10,362,103.23 exclusive of capital contributions. The appropriated capital contribution was $800,000 plus unexpended prior capital appropriations. L. 1955, c. 95, pp. 431, 537. The 1956-57 figures are $10,548,405 and the amount of unexpended prior capital appropriations, respectively. L. 1956, c. 100.

Management of the University is in the Board of 54 Trustees consisting at present of 53 persons. Thirty-two of the number are classified as charter trustees, of whom 30 hold indefinite terms and two (women) hold a five-year term; and seven persons are elected by the Board of Trustees for five-year terms on the nomination of the alumni and alumnae of the University. Five trustees are classified as public trustees appointed to five-year terms by the Governor of the State with the advice and consent of the Senate. The balance of the membership comprises nine trustees ex officio (officials of the State Government), and the president of the New Jersey Federation of Women's Clubs (ex officio by election by the Board). L. 1945, c. 49, sec. 4; N.J.S.A. 18:22-15.4; Charter Provisions and Rules and Regulations. The Board of Trustees itself fills vacancies in the number of charter and alumni trustees. The Board appoints, removes and replaces the President, faculty and other officers and employees of the University, and also the Board of Managers of the New Jersey Agricultural Experiment station. The officers and the Board of Managers are accountable to the Board for the conduct of the University. L. 1945, c. 49, sec. 5; N.J.S.A.

18:22-15.5. The chairman of the Board appoints the various standing committees and special committees, through which the Board largely exercises its supervision and control of the conduct of the University, and which are also accountable to the Board. The President is the chief administrative officer of the University and has the immediate care of the education and government of the students. The Board maintains a general oversight of the curricula of the institution in all of its divisions and establishes ordinances, orders and laws for the University to be executed by the President. (Charter Provisions and Rules and Regulations)

Internal control of the University by the Board of Trustees is subject to certain public supervision by the State Board of Education "to examine into its manner of conducting its affairs and to enforce an observance of its laws and regulations and the laws of the State." L. 1945, c. 49, sec. 8; N.J.S.A. 18:22-15.8; in addition, the property of the State which the Board of Trustees ...


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