Fletcher v Peck

Fletcher v. Peck case decided by the U.S. Supreme Court in 1810, involving the Yazoo land fraud . The court ruled that an act of the Georgia legislature rescinding a land grant was unconstitutional because it revoked rights previously granted by contract. The decision was the first to declare a state legislative act unconstitutional.

Fletcher v. Peck (1810).In an opinion delivered by Chief Justice John Marshall, the U.S. Supreme Court in Fletcher v. Peck used the contract clause of the U.S. Constitution (art. I, sec. 10) to protect individual property rights from state legislative action. The case arose from conflicting land claims to Georgia's Yazoo territory (modern Alabama and Mississippi). During the 1780s and early 1790s, Georgia sold much of this land to speculators. The largest sale, in 1795, involved the bribery of the state legislature. When Jeffersonian Republicans subsequently gained power in Georgia, the state assembly repealed the 1795 sale.

Later, John Peck of Massachusetts bought land that Georgia had sold under the 1795 act; Peck then sold it to Robert Fletcher of New Hampshire, who in 1803 sued Peck in federal court, claiming that Peck had not had clear title to the land. (This was a friendly suit; both parties wished to establish the legitimacy of land titles under the 1795 act.) In 1807, the federal Circuit Court upheld Peck's position, and Fletcher appealed to the Supreme Court.

Ruling in favor of Peck, Marshall held first that the Supreme Court was powerless to investigate the motives of the Georgia legislature in making the 1795 sale. In so doing, the Chief Justice further clarified the distinction between political questions, left to other branches of government, and judicial questions that the Court might properly decide. Marshall then voided the Georgia repeal act on two grounds, natural law and the contract clause. Even in the absence of specific constitutional protection, Marshall contended, the very nature of government and society constrained a legislature from seizing property without compensation. But in impairing a contract obligation between the state and the original purchasers, Marshall went on, Georgia's repeal act violated the contract clause of the Constitution. If fraud between two parties in the transfer of property could adversely affect the rights of subsequent buyers and sellers of that property, he argued, then “all titles would be insecure, and the intercourse between man and man would be seriously obstructed”.

Marshall's ruling served to protect and stimulate private economic initiative. More generally, his opinion gave the federal courts a role, under the contract clause, in reviewing state regulation of private contract and property rights. The contract clause continued to be used by the Supreme Court throughout the nineteenth century to limit state regulatory power. In the Gilded Age and beyond, the Court often invoked the contract clause, and cited Fletcher v. Peck, to shield corporations from state regulation and to block state reform efforts.
See also Charles River Bridge v. Warren Bridge; Dartmouth College Case; Early Republic, Era of the; Economic Regulation; Judicial Review; Laissez‐faire.

Bibliography

C. Peter Magrath , Yazoo: Law and Politics in the New Republic: The Case of Fletcher v. Peck, 1966.

Paul G.E. Clemens

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