• Last updated on November 10, 2022

In this ruling, the U.S. Supreme Court’s broad construction of the Constitution’s contracts clause enhanced protection from legislative interference for vested rights in private property. For the first time, moreover, the Court declared that a state law was unconstitutional and therefore invalid.

Summary of Event

Although it is almost axiomatic that many cases from which great constitutional principles are derived have sordid backgrounds, few can match the comic-opera corruption behind the U.S. Supreme Court’s March 16, 1810, Fletcher v. Peck decision, a case that began fifteen years earlier. Fletcher v. Peck (1810) Supreme Court, U.S;Fletcher v. Peck (1810) Constitution, U.S.;contracts clause Yazoo affair Fletcher, Robert Peck, John Georgia;and Fletcher v. Peck[Fletcher v. Peck] [kw]Fletcher v. Peck (Mar. 16, 1810) [kw]Peck, Fletcher v. (Mar. 16, 1810) Fletcher v. Peck (1810) Supreme Court, U.S;Fletcher v. Peck (1810) Constitution, U.S.;contracts clause Yazoo affair Fletcher, Robert Peck, John Georgia;and Fletcher v. Peck[Fletcher v. Peck] [g]United States;Mar. 16, 1810: Fletcher v. Peck[0450] [c]Laws, acts, and legal history;Mar. 16, 1810: Fletcher v. Peck[0450] [c]Economics;Mar. 16, 1810: Fletcher v. Peck[0450] Hamilton, Alexander Adams, John Quincy [p]Adams, John Quincy;and Fletcher v. Peck[Fletcher v. Peck] Martin, Luther Granger, Gideon Marshall, John [p]Marshall, John;and Fletcher v. Peck[Fletcher v. Peck] Randolph, John

On January 7, 1795, the Georgia legislature passed a bill permitting the sale of some thirty-five million acres of fertile, well-watered land for $500,000, payable over a five-year period. The purchasers were four land companies that had been formed to speculate in western lands. The fact that the state of Georgia itself did not have clear title to the lands apparently did not bother the state’s legislature because, with one exception, every member of the legislature had been bribed. The problem of unclear title also did not trouble Georgia’s governor, who signed the legislation into law.

To be sure, the legislature’s action was not without some benefits to Georgia. Georgia;cotton industry Cotton The state needed the money, and the problem of wresting the title to the land from the Native American tribes through action by the federal government now became the concern of the speculators. The state had sold a slightly smaller tract to other speculators six years earlier with a similarly clouded title and on inferior terms, and the electorate of the state had not been disturbed. In the interval, however, Eli Whitney had invented Inventions;cotton gin Cotton gin the cotton gin, which revolutionized the cotton industry. Now, the same lands would be in great demand for the production of cotton, assuming that their Native American residents could be removed.

The gross dishonesty of the whole transaction upset many conscientious citizens. As a consequence, in 1796, a new legislature was elected in which every member pledged to vote for the repeal of the act of sale. On February 13, the state passed the Rescinding Act Rescinding Act of 1796 (Georgia) . So strong was the feeling in the state that a formal ceremony was held on the steps of the state house, during which a copy of the initial bill was formally burned. The fraud became known as the Yazoo affair.

However, as quick as Georgia’s efforts to undo the fraudulent deal had been, they did not come in time to prevent the sale of certain of the lands to presumably innocent third parties. It was over these titles that the legal and political battles took place. The land companies involved in the transactions did not consider the Rescinding Act to be valid, and they continued to sell the land. Most of the purchasers lived in the Middle Atlantic and New England states, and they were greatly concerned as to the validity of their purchases. To defend their purchases, the New England-Mississippi Company New England-Mississippi Company[New England Mississippi Company] was formed to protect the rights of investors. The company sought an opinion from Secretary of the Treasury Alexander Hamilton Hamilton, Alexander concerning the legality of the land claims. Hamilton did not attempt to investigate the question of Georgia’s title to the land but, in a pamphlet published in 1796, stated that if the titles were valid, the Rescinding Act was void and in his opinion, the courts would so rule. Armed with an opinion from one of the country’s most distinguished public servants, the company continued to offer its lands to both prospective settlers and speculators.

At the same time that the New England-Mississippi Company was selling its lands, a proposal was made to the U.S. Congress, with the full backing of the Jefferson administration, that the United States should enter into an arrangement whereby Georgia would cede its claims to the lands in question to the federal government in return for compensation. In addition, the federal government would handle the claims to the area of the several Native American tribes and the Spanish government. This proposal became law. The report of the commissioners whom Jefferson appointed to study the problem proposed that five million acres of the lands be retained and the proceeds from their sale be used to indemnify the Yazoo land purchasers. Although the claims of the speculators, in the commissioners’ opinion, could not be supported, they proposed the indemnity for them to ensure “the tranquility of those who may hereafter inhabit the territory,” and argued that the federal government should enter into a compromise on reasonable terms.

The federal action caused a political fight of major proportions. When the commissioners’ proposal reached the floor of the House of Representatives, it was attacked by a wildly indignant Congressman John Randolph, Randolph, John who was determined to defeat it by any means possible. Randolph’s motives were partly ideological and partly emotional. He had been in Georgia when the Rescinding Act had been passed and had been present at the burning ceremony. He apparently believed that he understood the depths of the popular opposition to the grant in Georgia. He contended that Georgia had no initial right to make the sale, that the sale was firmly rooted in fraud and corruption so as to make it invalid, and that it was legally impossible to sell a third purchaser a better title.

Randolph was opposed in the House by Gideon Granger Granger, Gideon , the postmaster general, who was lobbying with his considerable ability in favor of the measure. After four days of intensive debate, Randolph’s eloquence won and the measure was defeated. Afterward, supporters of the legislation brought up the measure annually for several years, only to be defeated each time. Eventually, the purchasers followed the implicit advice given earlier by Alexander Hamilton Hamilton, Alexander by seeking relief through the courts.

The “friendly” suit of Fletcher v. Peck originated in the sale made by John Peck of Massachusetts to Robert Fletcher of New Hampshire of fifteen thousand acres of Yazoo lands. It was Fletcher’s intention to test the legality of his purchase. Because the litigants lived in different states, the case was heard in the federal courts. After Justice William Cushing of the Supreme Court, acting in his capacity as a circuit judge, found for Peck in October, 1807, the case was appealed to the Supreme Court.

Supreme Court justice William Johnson Johnson, William later said in a concurring opinion that the controversy had the appearance of a feigned case, but that his admiration for the attorneys involved in the case had induced him “to abandon [his] scruples, in the belief that they would never consent to impose a mere feigned case upon this Court.” Luther Martin Martin, Luther , Peck’s attorney, contended that the several states were free, sovereign, and independent entities, and that “the sovereignty of each, not of the whole, was the principle of the Revolution.” Consequently, Martin argued, the federal courts had no jurisdiction in the matter. John Quincy Adams Adams, John Quincy [p]Adams, John Quincy;and Fletcher v. Peck[Fletcher v. Peck] , who was later replaced by Joseph Story, the future Supreme Court justice, based his own case on Hamilton’s Hamilton, Alexander old opinion that the grant was a contract, and under Article I, section 10 of the U.S. Constitution, it could not be rescinded.

The issue in Fletcher v. Peck was essentially a question of public welfare versus public confidence in the sanctity of land grants. To refuse to allow the states the authority to repeal the land grant, especially in the context of an obvious fraud, would undermine the public welfare and invite land speculators to corrupt state legislatures. At the same time, to give the state legislature the right to revoke the land grant would jeopardize public confidence in all public grants, and in turn would discourage investment and the exploitation of land.

“That corruption,” John Marshall Marshall, John [p]Marshall, John;and Fletcher v. Peck[Fletcher v. Peck] wrote at the beginning of his opinion in Fletcher v. Peck, “should find its way into the governments of our infant republics and contaminate the very source of legislation . . . [is a circumstance] deeply to be to be deplored.” Despite this, the Rescinding Act Rescinding Act of 1796 (Georgia) of the Georgia legislature was still void.

Marshall did not clearly establish the reasons that the repeal of the land grant was constitutionally infirm. At one point in his opinion, he argued that the 1796 act of the Georgia legislature impaired the obligation of a contract in violation of Article I, section 10 of the Constitution; elsewhere, he suggested that the Georgia act was a violation of the ex post facto clause of the same article and section. “The rescinding act,” he wrote, “would have the effect of an ex post facto decision. It forfeits the estate of Fletcher for a crime not committed by himself, but from those from who he purchased.” This argument had the defect of ignoring the fact that the ex post facto clause had been held applicable only to criminal cases in Calder v. Bull in 1798, and the law in Fletcher dealt solely with a civil subject.

Elsewhere in the opinion, following one of the arguments of Alexander Hamilton, Hamilton, Alexander Marshall, John [p]Marshall, John;and Fletcher v. Peck[Fletcher v. Peck] Marshall intimated that the Rescinding Act was invalid because it conflicted with the nature of society and government. At the conclusion of his opinion, Marshall said that “the state of Georgia was restrained by general principles which are common to our free institutions or by the particular provisions of the Constitution.”

Significance

Despite the ambiguity and shortcomings of Marshall’s opinion, Fletcher v. Peck was the first clear precedent for the assertion by the Supreme Court of a power to declare state laws unconstitutional. Its immediate practical effect was negligible; Georgia no longer owned the Yazoo lands, as they had been ceded to the federal government. However, Fletcher did lay the foundations for using the contract clause of the Constitution to protect private property interests against the vagaries of state legislatures. As such, it is a reflection of the overall strategy of the Marshall Court to facilitate investment and energize the U.S. economy.

Although the speculators had won in the Supreme Court, they were not to secure a congressional, or monetary, victory until 1814, when Congress, after John Randolph’s Randolph, John failure to win reelection, passed an appropriation of five million dollars to buy up their now untarnished titles.

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Beveridge, Albert J. Conflict and Construction, 1800-1815. Vol. 4 in The Life of John Marshall. Boston: Houghton Mifflin, 1919. This classic biography of Marshall devotes almost sixty pages to a discussion of Fletcher v. Peck.
  • citation-type="booksimple"

    xlink:type="simple">Haines, Charles G. The Role of the Supreme Court in American Government and Politics, 1789-1835. Berkeley: University of California Press, 1944. A study of the Supreme Court in its formative period. Gives adequate coverage to Fletcher v. Peck and places it in the framework of the Court’s development.
  • citation-type="booksimple"

    xlink:type="simple">Hunting, Warren B. The Obligation of Contracts Clause of the United States Constitution. Baltimore: Johns Hopkins University Press, 1919. Contains a technical discussion of an important phase of U.S. constitutional history. Detailed coverage of Fletcher v. Peck.
  • citation-type="booksimple"

    xlink:type="simple">Lewis, Thomas T., and Richard L. Wilson, eds. Encyclopedia of the U.S. Supreme Court. 3 vols. Pasadena, Calif.: Salem Press, 2001. Comprehensive reference work on the Supreme Court that contains substantial discussions of Fletcher v. Peck, contracts, John Marshall, Joseph Story, and many related subjects.
  • citation-type="booksimple"

    xlink:type="simple">Newmyer, R. Kent. John Marshall and the Heroic Age of the Supreme Court. Baton Rouge: Louisiana State University Press, 2001. Examination of Chief Justice Marshall’s legal philosophy, as it was expressed in his Court decisions, that places his beliefs in historical context.
  • citation-type="booksimple"

    xlink:type="simple">_______. Supreme Court Justice Joseph Story: Statesman of the Old Republic. Chapel Hill: University of North Carolina Press, 1985. A comprehensive, analytical biography of Story, one of the lawyers in Fletcher v. Peck and a future associate of John Marshall.
  • citation-type="booksimple"

    xlink:type="simple">White, G. Edward. The Marshall Court and Cultural Change, 1815-1835. Abridged ed. New York: Oxford University Press, 1991. Although abridged, this study of the record of the Marshall Court contains almost eight hundred pages of text and almost eighty pages on the contract clause cases.
  • citation-type="booksimple"

    xlink:type="simple">Wright, Benjamin F., Jr. The Contract Clause of the Constitution. Cambridge, Mass.: Harvard University Press, 1938. A more detailed study of the contract clause than Hunting’s and broader in scope.

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John Quincy Adams; John Marshall; Joseph Story. Fletcher v. Peck (1810) Supreme Court, U.S;Fletcher v. Peck (1810) Constitution, U.S.;contracts clause Yazoo affair Fletcher, Robert Peck, John Georgia;and Fletcher v. Peck[Fletcher v. Peck]

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