Fletcher v. Peck

Summary

In January 1795 the Georgia legislature sold roughly thirty-five million acres of its western lands, much of present Alabama and Mississippi, to four land companies for $500,000. It soon emerged that nearly every legislator who voted for the sale had been promised shares or money by the purchasers. Voters turned the majority out, and in February 1796 a new legislature passed a rescinding act declaring the grant null and ordered the records burned in public. By then the companies had resold large tracts to buyers in New England and elsewhere. In 1803 John Peck of Massachusetts, who traced his title through James Greenleaf, sold 15,000 acres to Robert Fletcher of New Hampshire, whose deed contained covenants that Georgia had held good title and had lawfully conveyed it. Fletcher then sued Peck in federal circuit court for breach of those covenants, and when the circuit court ruled for Peck he took the case to the Supreme Court on a writ of error. Fletcher's counsel, led by Luther Martin, contended that a grant obtained by bribery was void from the start; that one legislature cannot bind its successors, so the 1796 legislature could undo the work of 1795; and that Georgia held no full title anyway, because the lands were reserved to the Indian nations under the Proclamation of 1763. For Peck, John Quincy Adams, Robert Goodloe Harper and Joseph Story answered that courts may not probe the motives of a sovereign legislature in a suit between private parties, that innocent buyers who paid value without notice of fraud must be protected, and that the rescinding act impaired the obligation of contracts. On 16 March 1810 the Court affirmed the judgment for Peck without dissent. Chief Justice Marshall's opinion held that a grant is an executed contract; that once rights have vested, a later legislature cannot divest them; and that Georgia, as a member of the Union, was restrained both by general principles of free government and by Article I, Section 10 of the Constitution. A majority also held that the Indian title did not prevent Georgia from being seised in fee. Justice William Johnson agreed that a state cannot revoke its own grants, but rested that conclusion on the reason and nature of things rather than the Contract Clause, and maintained that Georgia's interest amounted only to a possibility until the Indian title was extinguished. The library text reproduces Marshall's opinion and an excerpt from Johnson's separate opinion, stopping before his closing remarks on whether the suit was a feigned one; footnotes are not carried over. Fletcher v. Peck is often described as the first case in which the Court held a state law unconstitutional. Congress in 1814 provided a compensation fund for the Yazoo claimants, and the contract doctrine was extended to corporate charters in the Dartmouth College case of 1819.

Plot or Argument

• The covenants and the first plea: Georgia's power to sell

  Marshall sets out the deed's covenants and the counts of Fletcher's declaration. Georgia's own constitution of 1789 contained no restriction forbidding the 1795 sale, and a court should not lightly pronounce a law void in a doubtful case; the circuit court rightly overruled the demurrer.

• Bribery and the courts

  On the count alleging corruption, Marshall declines to inquire into the motives of the legislature in a suit between two private individuals. Even if some legislators were corrupt, the title of a later purchaser who paid value without notice cannot be destroyed on that ground.

• May one legislature undo another's grant?

  The opinion acknowledges the principle that no legislature can abridge the powers of its successors, but limits it to general legislation. A grant of land is a contract executed, and when absolute rights have vested under it, a repeal cannot divest them.

• General principles and the Contract Clause

  Georgia is not a single, unconnected sovereign but a member of the Union bound by the Constitution's ban on laws impairing the obligation of contracts, which Marshall reads to cover grants by a state as well as agreements between individuals. The Court unanimously holds the rescinding act ineffective against Fletcher's estate.

• The Proclamation of 1763 and the Indian title

  Reviewing the special verdict's history of royal charters and boundaries, the Court finds the lands within Georgia and the 1763 reservation a temporary arrangement. A majority holds that the Indian title, to be respected until legitimately extinguished, is not repugnant to Georgia's seisin in fee. Judgment affirmed with costs.

• Justice Johnson's separate opinion

  Johnson grounds the rule against revoking grants in a principle that binds even the deity, distinguishes a state's jurisdiction, which it cannot part with, from its property, which it can, and doubts that legislative corruption can void a grant. He concludes that Georgia held only a possibility in lands still under Indian title.

Characters

• John Marshall, Chief Justice; author of the opinion of the Court

  Wrote the opinion holding that the rescinding act could not divest titles already vested.

• William Johnson, Associate Justice; separate opinion

  South Carolinian who agreed in the result on grounds of natural justice and disagreed on the question of Georgia's seisin.

• Robert Fletcher, plaintiff in error

  New Hampshire buyer who sued on the covenants in his deed, claiming Georgia's title was defective.

• John Peck, defendant in error

  Massachusetts land speculator who sold Yazoo lands to Fletcher and defended the validity of the title.

• Luther Martin, counsel for Fletcher

  Maryland attorney general and former delegate to the 1787 Convention.

• John Quincy Adams, counsel for Peck at the first argument

  Massachusetts senator and later President who argued for the purchasers in 1809.

• Joseph Story, counsel for Peck

  Young Massachusetts lawyer who joined Robert Goodloe Harper for the reargument and was named to the Court the following year.

Lessons

• A grant as a contract

  Marshall treats Georgia's sale of land as a contract that has been carried out, leaving the state with an implied promise not to reassert its right. That move brought public grants under the Contract Clause and gave buyers of land, and later holders of charters, a federal defence against state attempts to take back what had been conveyed.

  • What is the difference, in Marshall's reasoning, between an executory and an executed contract?
  • Why does the opinion say a grant contains an implied promise by the grantor?
  • Should a state that has been defrauded be held to the same rule as a private seller?

• The innocent purchaser

  The legislators of 1795 were widely believed to have been bribed, but Fletcher and Peck had bought years later and far away. The Court asked whose rights should suffer when an original transaction was tainted, and answered that a purchaser for value without notice keeps his title.

  • What does purchaser for a valuable consideration, without notice mean?
  • Why might protecting later buyers matter to everyone who owns land?
  • Is it just to let the profits of a corrupt bargain stand in order to protect strangers to it?

• Courts and the motives of legislators

  Marshall thought it improper for a court, in a dispute between two private parties, to investigate whether a sovereign legislature had acted from corrupt motives. Johnson went further, noting the absurdity if each new majority could declare its predecessors corrupt. Both pointed instead to elections and constitutional limits as remedies.

  • What practical problems does Marshall foresee if courts examined legislators' motives?
  • According to Johnson, where must a people look for security against corrupt rulers?
  • Did Georgia's voters already provide a remedy when they replaced the 1795 legislature?

• Natural justice or written text?

  The Court rested its holding on two foundations at once, general principles common to free institutions and the particular words of the Constitution. Johnson rejected the textual ground and relied on natural justice alone. The case thus shows early American judges still weighing unwritten principles alongside the written charter.

  • Find the sentence where Marshall names both grounds for the decision. Why might he have given two?
  • Why was Johnson unsure that the Contract Clause applied to grants by a state?

Context

After independence Georgia claimed lands west to the Mississippi, much of it occupied by the Creek, Cherokee, Choctaw and Chickasaw nations. Land speculation was intense throughout the 1790s, and the Yazoo sale of 1795 became a national scandal. In the Compact of 1802 Georgia ceded its western claims to the United States in exchange for payment and a federal promise to extinguish Indian title within the state, leaving the Yazoo purchasers to press their claims in Congress and the courts. In Congress, John Randolph of Roanoke led a Republican faction that bitterly opposed any compromise with the claimants.

Composition

Fletcher brought suit in the federal circuit court for Massachusetts in 1803, and the case reached the Court on writ of error. It was argued in March 1809 and, after the pleadings were amended, reargued in February 1810; Marshall delivered the opinion on 16 March 1810. The library text, from the Legal Information Institute, gives Marshall's opinion and an excerpt from Johnson's.

Reception

Republicans in Congress and in Georgia criticised the decision as protecting speculators, while commercial interests welcomed it as a guarantee of secure titles. Congress passed a compensation act for the claimants in 1814. Legal historians regard the case as the beginning of the Marshall Court's Contract Clause jurisprudence, though many have also noted that the suit appears to have been arranged between parties who both wanted a ruling upholding the titles.

Comparisons

• dartmouth-college-v-woodward

  The Dartmouth College case carried the Yazoo reasoning from land grants to a corporate charter, holding that New Hampshire could not rewrite the terms on which a private college had been founded.

• charles-river-bridge-v-warren-bridge

  Under Chief Justice Taney the Court in 1837 refused to read implied exclusive rights into a state charter, a narrower view of public grants than the one Marshall adopted for Georgia's land sale.

• worcester-v-georgia

  Fletcher's brief treatment of Indian title as compatible with Georgia's seisin returns at length in Worcester, where Marshall describes the Cherokee as a distinct political community under federal treaties.

• the-federalist-papers

  Madison's Federalist No. 44 defended the Constitution's ban on laws impairing contracts as a guard against fluctuating state legislation, the purpose the Court invoked against Georgia's rescinding act.

• the-founding-documents

  The decision turns on Article I, Section 10, which forbids any state to pass a bill of attainder, an ex post facto law, or a law impairing the obligation of contracts.

Quotes

For Students

A reading companion for classical Christian high school students. See the student guide.

Reading Guide

Watch for

• How the opinion is organized around the counts of Fletcher's declaration and the covenants in Peck's deed.
• Marshall's refusal to investigate bribery in a suit between two private individuals.
• The phrase purchaser for a valuable consideration, without notice, and why it matters to the outcome.
• The two grounds named for the holding: general principles of free institutions and the Constitution's text.
• Johnson's distinction between a state's jurisdiction and its property, and his comment that the question of Georgia's title was better suited to diplomats than judges.

Key terms and names

Covenant

A binding promise written into a deed, such as a promise that the seller has good title to the land.

Rescinding act

Georgia's 1796 law declaring the Yazoo sale null and void.

Contract Clause

The provision of Article I, Section 10 forbidding any state to pass a law impairing the obligation of contracts.

Executed contract

An agreement that has already been carried out, such as a completed sale and conveyance of land.

Seised in fee

Holding full legal ownership of land, the highest form of estate.

Writ of error

The procedure by which the Court reviewed a lower court's judgment for errors of law.

Indian title

The right of occupancy held by Indian nations, which the Court said must be respected until lawfully extinguished.

Seminar Questions

1. Comprehension What did the Georgia legislature do in 1795, and what did the next legislature do in 1796?
2. Comprehension Why did Fletcher sue Peck, and why did Peck want the Court to uphold the Yazoo titles?
3. Comprehension On what two points did Justice Johnson differ from the opinion of the Court?
4. Interpretation Why does Marshall think a court should not ask whether the 1795 legislators were bribed?
5. Interpretation How does Marshall answer the argument that one legislature cannot bind the next?
6. Interpretation What does Johnson mean when he says the principle he relies on would impose laws even on the deity?
7. Big Question When a public wrong has been done, how should a government weigh the claims of the people it represents against the claims of innocent people who relied on its word?

Faith Connections

• Psalm 15:1-5 (Scripture)

  The one who may dwell on God's holy hill keeps his oath even when it hurts and takes no bribe against the innocent; the case sets the duty to keep a promise against the stain of a corrupt bargain.

• Exodus 23:8 (Scripture)

  The Law warns that a gift blinds the wise and perverts the words of the righteous, the danger the Georgia voters of 1796 believed had overtaken their legislature.

• Joshua 9:3-21 (Scripture)

  Israel's leaders, deceived by the Gibeonites, still kept the oath they had sworn, a biblical instance of honouring an agreement obtained under false pretences.

Logic and Rhetoric

Central argument: Georgia's 1795 sale was a contract carried out; when absolute rights vested in purchasers who paid value without notice of fraud, a later legislature could not take them back, because both general principles of free government and the Constitution's ban on impairing contracts restrain a state that belongs to the Union.

Rhetorical device: concession and limitation. Marshall first grants the principle that one legislature cannot abridge the powers of its successor (quote 2), then restricts it to general legislation so that it does not reach property already conveyed (quote 1).

Debate: Resolved: that a state legislature may annul a grant obtained by bribing its predecessors, even after the land has been sold to innocent buyers.

Memory Work

When, then, a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot devest those rights

The security of a people against the misconduct of their rulers, must lie in the frequent recurrence to first principles, and the imposition of adequate constitutional restrictions.

Writing Prompts

Essay: Explain why the Court protected the Yazoo titles even though it did not deny that the 1795 legislature may have been bribed, and evaluate the strongest argument Georgia could have made in reply.

Comparison with Trustees of Dartmouth College v. Woodward: Compare how Marshall applies the Contract Clause to a land grant in Fletcher v. Peck and to a college charter in the Dartmouth College case. What new step does the later case take?

Medical Lens

The opinions deal with land titles, legislative corruption and the Contract Clause; nothing in them touches medicine or the mind.

Creative Prompts

• Classroom

  Hold a moot court on the 1810 reargument: Luther Martin's team argues that a bribed legislature's grant is void and that Georgia may take it back, while the Adams-Harper-Story team defends the purchasers' titles under Article I, Section 10.

• Essay

  Write a short brief on behalf of the Georgia legislature of 1796 explaining why it believed it had the authority to annul the Yazoo sale and burn the records.

• Dialogue

  Imagine a conversation in a Boston counting-house in 1797 between a merchant who has bought Yazoo shares and a friend who has just read news of the rescinding act.

• Essay

  Compare Marshall's and Johnson's foundations for the same result and argue which provides firmer ground for protecting property.

Further Reading

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

  The standard monograph on the land sale, the rescinding act and the litigation.

• The Great Chief Justice: John Marshall and the Rule of Law, Charles F. Hobson

  Places the contract cases within Marshall's broader legal thought.

• Justice William Johnson, the First Dissenter, Donald G. Morgan

  Study of the justice who most often wrote separately on the Marshall Court.