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A statute, forbidding any person, corporation or association of persons to maintain or operate any college that receiving white and non-white students, may conflict with the federal Constitution in denying to individuals powers which they may rightfully exercise, and yet, at the same time, be valid as to a corporation created by the State.
Berea College, a corporation duly incorporated under the laws of the State of Kentucky, was charged with a violation of Kentucky Acts 1904, chap. 85. Kentucky Acts 1904, chap. 85, prohibited domestic corporations from teaching white and negro pupils in the same institution. It was found guilty and was sentenced to pay a fine of one thousand dollars. The Court of Appeals of the State affirmed the conviction, holding that the right to teach white and Negro children in a private school at the same time and place was not a property right. According to the state appellate court, the college, as a corporation created by the State had no natural right to teach at all. Its right to teach was such as the State saw fit to give to it. The State may have withheld it altogether, or qualified it. Berea College challenged the appellate court’s judgment.
Could the state prevent the corporation from teaching both white and negro pupils in the same institution, notwithstanding the fact that such may be violative of the rights of the individuals concerned?
The Court held that a corporation was not entitled to all the immunities to which individuals were entitled, and a State may withhold from its corporations privileges and powers of which it cannot constitutionally deprive individuals. According to the Court, a state statute limiting the powers of corporations and individuals may be constitutional as to the former although unconstitutional as to the latter; and, if separable, it will not be held unconstitutional at the instance of a corporation unless it clearly appeared that the legislature would not have enacted it as to corporations separately. The Court averred that the prohibition in § 1 of the Kentucky statute of 1904, against persons and corporations maintaining schools for both white persons and negroes was separable, and even if an unconstitutional restraint as to individuals it was not unconstitutional as to corporations, it being within the power of the State to determine the powers conferred upon its corporations. A power reserved to the legislature to alter, amend or repeal a charter authorized it to make any alteration or amendment of a charter granted subject to it, which would not defeat or substantially impair the object of the grant, or any rights vested under it, and which the legislature may deem necessary to secure.