Fletcher v. Peck

6 Cranch (10 U.S.) 87 (1810), argued 15 Feb. 1810, decided 16 March 1810 by vote of 4 to 1; Marshall for the Court, Johnson dissenting in part; Cushing and Chase not participating. In Fletcher v. Peck the Supreme Court employed the Contracts Clause of the Constitution as an instrument of judicial nationalization. In 1794, after notorious bribery involving virtually every member of the Georgia legislature, two U.S. senators, and many state and federal judges (including Justice James Wilson of the Supreme Court), the Georgia legislature authorized the sale of thirty‐five million acres in the Yazoo area (present‐day Alabama and Mississippi) to four land companies for 1.5 cents per acre. Corrupted legislators were defeated at the polls, and in 1796 the legislature rescinded the Yazoo grant, invalidating all property rights derived from it. In the meantime, however, purchasers under the 1794 statute sold off millions of acres. One of the purchasers under this later sale, Robert Fletcher, brought what amounted to a collusive suit against his seller, John Peck, for breach of warranty of title, the ultimate objective being to invalidate the legislative rescission.

Fletcher v. Peck presented Chief Justice John Marshall with a dilemma. He had to uphold the original legislative grant, corrupted by bribery, in order to reassure investors who took land under state grants, while voiding the later, untainted statute. He therefore proceeded cautiously. The only question before the Court, Marshall said, was title; to remedy political corruption, citizens should resort to the polls, not to the courts. Having sidestepped the corruption issue, Marshall deftly took up the constitutional issues. Could legislatures deprive bona fide investors of the lands they had acquired under the corrupt grant? Each buyer, said Marshall, had procured “a title good at law, he is innocent, whatever may be the guilt of others, and equity will not subject him to the penalties attached to that guilt. All titles would be insecure, and the intercourse between man and man would be very seriously obstructed, if this principle be overturned” (pp. 133–134).

Marshall held the rescinding act an unconstitutional abridgment of the obligation of lawful contracts under the Contracts Clause. Equally important, he tied the rights protected by that clause to the natural law doctrine of vested rights: when an agreement was “in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot divest those rights” (p. 134). He concluded that “either by principles which are common to our free institutions, or by the particular provisions of the constitution of the United States” (p. 139), a state legislature could not enact legislation that impaired contracts or disturbed land titles supposedly acquired in good faith.

Fletcher v. Peck provoked public outcry, particularly from proponents of states' rights who accused the Court of pandering to speculators and of imposing a doctrinal strait‐jacket on frontier legislatures. Marshall's opinion did in fact support land speculators and protected the titles of some unscrupulous investors as well as bona fide purchasers of western lands. But Marshall considered contractual rights and obligations essential to the American experiment in self‐rule. Thus, Fletcher's legacy was complex: it was a benchmark in Marshall's campaign to protect the law of property and contracts from legislative interference, an early statement about the need to separate politics from law, and an example of judicial receptivity to the needs of investors in an age of capital scarcity. At the same time, it reflected the Court's commitment to the security of contracts and property rights as protected under the Constitution.

Bibliography

• C. Peter Magrath, Yazoo: Law and Politics in the New Republic (1966)

— Sandra F. Van Burkleo

• 6 Cranch 87 (1810)
• Vote: 4–1
• For the Court: Marshall
• Dissenting: Johnson in part

In 1795 the state of Georgia sold 35 million acres in the Yazoo area to four land companies. However, the authorization of the land sales was tainted by fraud and bribery involving important members of the state legislature who were voted out of office in 1796. New members of the Georgia legislature promptly acted to repeal the statute that had authorized the Yazoo land sales. The 1796 legislation invalidated all property rights gained from the Yazoo Land Act of 1795. People who had purchased Yazoo land under the 1795 statute, however, continued to sell this land to third parties. In 1803 John Peck sold 15,000 acres of Yazoo land to Robert Fletcher. Then Fletcher sued Peck for selling him land that was not his to sell.

The Issue

Chief Justice John Marshall avoided any discussion of the reasons for the Georgia legislature's action in repealing the 1795 land act. He said that charges of political corruption associated with land titles and sales were a matter for the state government to decide. According to Marshall, the only question before the U.S. Supreme Court was whether the state legislature could deprive investors of land they had acquired under the corrupt grant authorized by the 1795 law. Was depriving investors of this land, by repealing the land grant that had authorized their purchase of it, a violation of the contract clause of Article 1, Section 10, of the U.S. Constitution?

Opinion of the Court

Writing for the Court, Chief Justice John Marshall held that the Georgia legislature's act repealing the Yazoo land grant law was unconstitutional because it violated the contract clause of Article 1, Section 10, of the Constitution. That clause says, “No State shall … pass any… Law impairing the Obligation of Contracts.” Thus, concluded Marshall, a state government could not make laws that impaired contracts or interfered with land titles acquired in good faith.

Significance

This decision was a legal blow against advocates of stronger state powers and rights within the federal system. Chief Justice Marshall emphatically asserted the right of the U.S. Supreme Court to review and strike down a state law as unconstitutional. Further, Marshall established that contracts and property rights would be protected by the federal courts against state government interference. This constitutional protection of an individual's property rights and contracts encouraged large-scale economic development of the nation.

See also Contract clause; Federalism

Fletcher v. Peck, 6 Cranch 87 (1810), was the first opinion issued by the Supreme Court of the United States in which a state law was invalidated as contrary to the U.S. Constitution. Through various fraudulent activities, including bribery of state officials, the Georgia legislature was persuaded in 1795 to authorize the issuance of grants of certain state-owned land in what were then known as the "Yazoo lands," which encompassed much of the states of Alabama and Mississippi. In 1796 a newly elected legislature passed an act annulling these grants on the ground of fraud.

Meanwhile a parcel of the land, some 600,000 acres, had passed to John Peck, who in turn sold part of his land to Robert Fletcher with a written understanding that the title had not been impaired by the annulment of the land grants by the Georgia state legislature. Fletcher sued Peck for breach of this covenant, but in essence Fletcher was testing whether the act of the Georgia legislature that impaired the original sale and its contract was valid. Fletcher and Peck were business associates and appear to have been using this collusive case to test the legality of the annulment of the land grants.

Thus the question before the Supreme Court was whether or not the original land grant by Georgia, despite its fraudulence, was binding. Landholders argued that the Contract Clause of Article I, Section 10 of the Constitution and the constitutional prohibition against ex post facto laws barred the state from rescinding, by its subsequent legislative action in 1796, the original legislative contract granting the land. Attorneys for the state of Georgia contended that the state was permitted to declare the contracts void because the original legislative contract of 1795 was based on fraud and thus, they argued, the private contracts based on that act were also fraudulent. They also argued that the contract clause was intended to protect against the annulment of private contracts and was not applicable to the states.

Writing for the unanimous Court, Chief Justice John Marshall recognized the fraud involved in the original contract entered into by the state of Georgia but nevertheless held that the state was bound by the contracts selling the land. By holding that contracts are binding upon states as well as individuals, Marshall's opinion increased the force and importance of the contract clause and of the federal judiciary in relation to the states.

Bibliography

Ackerman, Bruce A. Private Property and the Constitution. New Haven, Conn.: Yale University Press, 1977.

Magrath, C. Peter. Yazoo: Law and Politics in the New Republic. Providence, R.I.: Brown University Press, 1966.

—Akiba J. Covitz

An 1810 decision by the U.S. Supreme Court, Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 3 L. Ed. 162, that held that public grants were contractual obligations that could not be abrogated without fair compensation even though the state legislature that made the grant had been corrupted and a subsequent legislature had passed an act nullifying the original grant.

The plaintiff, Robert Fletcher, brought suit against John Peck for breach of covenant on land that Fletcher had purchased in 1803. This land was part of a tract of 35 million acres in the area of the Yazoo River (Mississippi and Alabama) that the state of Georgia had taken from the Indians and then sold in 1795 to four land companies for a modest sum ($500,000) for so much land. The land companies then broke up the tract and resold parcels for enormous profits.

When a new Georgia legislature learned in 1796 that some of the legislators who had voted to sell the land had been stockholders in the companies that purchased the tract and that many of the legislators who had authorized the sale had received bribes from the land speculators, itrescinded the original sale on the grounds that it had been attended by fraud and corruption.

The property in question had passed through several hands before Peck purchased it in 1800. Three years later, he sold the land to Fletcher with a deed stating that all the previous sales had been legal. Fletcher, however, contended that the original sale to the land companies was void and that Peck was guilty of breach of covenant because the land was not legally his to sell. After a circuit court found in favor of Peck, the case came before the U.S. Supreme Court on a writ of error.

Speaking for the Court, Chief Justice John Marshall deplored the corruption that had found its way into the state legislature but found that the validity of a law cannot depend on the motives of its framers. Nor can private individuals be expected to conduct an inquiry into the probity of a legislature before they enter into a private contract on the basis of a statute enacted by that legislature.

Marshall then turned to the question of whether the statute enacted in 1796 could nullify rights and claims established under the bill that had authorized the land sale in 1795. Although he agreed that as a general principle "one legislature is competent to repeal any act which a former legislature was competent to pass," Marshall held that actions taken under a law cannot be undone by a subsequent legislature. If the law in question is a contract, he reasoned, repeal of the law cannot divest rights that have vested under the contract. To hold otherwise would be tantamount to seizing without compensation property that an individual had acquired fairly and honestly.

In addition to basing his argument on such general considerations, Marshall found that the original grant was a contract within the meaning of the Contract Clause of the U.S. Constitution, which provides that "[n]o State shall … pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts …" (Art. I, § 10, clause 1). Reasoning that the Constitution did not distinguish between contracts between individuals and contracts to which a state was a party, Marshall held that the Framers of the Constitution intended the clause to apply to both. The purpose of the clause, he explained, was to restrain the power of the state legislatures over the lives and property of individuals.

Under the act rescinding the bill of 1795, however, Fletcher would forfeit the property "for a crime not committed by himself, but by those from whom he purchased." Thus the rescinding act "would have the effect of an ex post facto law" and would therefore be unconstitutional. Accordingly Marshall concluded that in spite of the profits reaped by the dishonesty of the land speculators, both general principles and the U.S. Constitution prevented a state legislature from rendering a contract null and void.

Fletcher v. Peck was the first case in which the Supreme Court invalidated a state law as contrary to the Constitution. It also exemplified the protective approach of the Marshall court toward business and commercial interests. In Fletcher and later in the Dartmouth College case (Trustees of Dartmouth College v. Woodward, 17 U.S. [4 Wheat.], 518, 4 L. Ed. 629 [1819]), the Court expanded the scope of the term contract and limited the degree to which the states could encroach upon property rights and contractual obligations.

Fletcher v. Peck
Supreme Court of the United States
Argued February 15, 1810 Decided March 16, 1810
Full case name	Robert Fletcher v. John Peck
Citations	10 U.S. 87 (more) 10 U.S. (6 Cranch) 87; 3 L. Ed. 162;1810 U.S. LEXIS 322;
Prior history	Demurrer overruled, D. Mass
Subsequent history	None
Holding
The Contracts Clause of the U.S. Constitution prohibited Georgia from voiding contracts for the transfer of land, even though they were secured through illegal bribery. Circuit Court for the District of Massachusetts affirmed.
Court membership
Chief Justice John Marshall Associate Justices William Cushing · Samuel Chase Bushrod Washington · William Johnson Henry B. Livingston
Case opinions
Majority	Marshall, joined by Cushing, Chase, Washington, Livingston, Todd
Concur/dissent	Johnson
Laws applied
U.S. Const. art. I, § 10, cl. 1

Fletcher v. Peck, 10 U.S. 87 (1810), was a landmark United States Supreme Court decision. It was one of the first cases in which the Supreme Court ruled a state law unconstitutional. In the course of the westward push for the control of Indian lands, the state of Georgia took from the Indians a 35-million-acre (140,000 km²) region in the Yazoo River area known as the Yazoo Lands. This land later became the states of Alabama and Mississippi. In 1795, the Georgia legislature divided the area into four tracts. The state then sold the tracts to four separate land development companies for a modest total price of $500,000, i.e. about 1.4 cents per acre ($3.46/km²), a good deal even at 1790s prices. The Georgia legislature overwhelmingly approved this land grant, known as the Yazoo Land Act of 1795.

It was revealed that the Yazoo Land Act sale to private speculators had been approved in return for bribes. Voters rejected most of the incumbents in the next election, and the next legislature, reacting to the public outcry, repealed the law and voided transactions made under it.

John Peck had purchased land that had previously been sold under the 1795 act. Peck sold this land to Robert Fletcher and in 1803, Fletcher brought suit against Peck, claiming that he did not have clear title to the land when he sold it. The case reached the Supreme Court, which in a unanimous decision ruled that the state legislature's repeal of the law was unconstitutional. The opinion, written by John Marshall, argued that the sale was a binding contract, which according to Article I, Section 10, Clause I (the Contract Clause) of the Constitution cannot be invalidated, even if illegally secured. Today the ruling further protects property rights against popular pressures, and is the earliest case of the Court asserting its right to invalidate state laws conflicting with the Constitution.

See also

• List of United States Supreme Court cases, volume 10
• Yazoo land scandal
• Contract Clause

Further reading

• John Marshall: Definer Of A Nation by Jean Edward Smith, 1996, Henry Holt & Company.
• Yazoo: Law and Politics in the New Republic: The Case of Fletcher v. Peck by C. Peter Magrath, 1966 ISBN 0-608-18419-5

External links

• Text of Fletcher v. Peck, 10 U.S. 87 (1810) is available from:  · Enfacto · Findlaw · LII · University of Tulsa

• The Oyez Project
• Famous Cases
• Case Brief for Fletcher v. Peck at Lawnix.com

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