Five-minute digest
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.
Top 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.
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.
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.
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.
Verified Quotes
Frequently cited
“It is, then, the unanimous opinion of the court, that, in this case, the estate having passed into the hands of a purchaser for a valuable consideration, without notice, the state of Georgia was restrained, either by general principles which are common to our free institutions, or by the particular provisions of the constitution of the United States, from passing a law whereby the estate of the plaintiff in the premises so purchased could be constitutionally and legally impaired and rendered null and void.”
Frequently cited
“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 principle asserted is, that one legislature is competent to repeal any act which a former legislature was competent to pass; and that one legislature cannot abridge the powers of a succeeding legislature.”
“It would be indecent, in the extreme, upon a private contract, between two individuals, to enter into an inquiry respecting the corruption of the sovereign power of a state.”
“I do not hesitate to declare that a state does not possess the power of revoking its own grants. But I do it on a general principle, on the reason and nature of things: a principle which will impose laws even on the deity.”
“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.”
Medical Lens
The opinions deal with land titles, legislative corruption and the Contract Clause; nothing in them touches medicine or the mind.