Fletcher v. Peck

Background

When the Revolutionary War ended with the Treaty of Paris, the state of Georgia took control of a large parcel of land known as the Yazoo lands. This 35-million acre region surrounding the Yazoo River was owned by and home to the Yazoo Nation. It later became large portions of Alabama and Mississippi. In 1795, the Georgia state legislature decided to sell the land and divided it into 4 sections. The Yazoo Land Act of 1795 was enacted by the state legislature; however, it was later determined that many officials had approved it in exchange for bribes. Voters were so incensed by the scandal that many of the politicians who approved the Land Act were not re-elected and the new legislature repealed the law and voided the land purchases.

Facts

John Peck purchased 13,000 acres of land from the land grant in 1800. In 1803, Robert Fletcher purchased the land from Peck for $3,000. Fletcher later discovered, however, that the Land Act had been voided and sued Peck. Fletcher claimed that Peck had promised him good title (rights to own the land). The federal circuit court ruled in favor of Peck so Fletcher appealed to the Supreme Court of the United States.

Issue

Could the contract between Fletcher and Peck be invalidated by the Georgia legislature because the original sale of the land was invalidated by the repeal of the Yazoo Land Act? In other words, once the Georgia state legislature had passed the Land Act and sold the land, could it constitutionally reverse the sale?

Summary

Chief Justice John Marshall wrote the opinion for the Court and held that the Georgia legislature’s repeal of the Yazoo Land Act of 1795 was unconstitutional and violated the contract clause of the Constitution. The Court called the bribery of state officials “deplorable” but reasoned that Peck was an innocent third party who had entered into what he believed to be a legal contract and that the contract was therefore binding. As Marshall put it, “When a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot divest those rights.” The Court also ruled that Georgia did not have “sovereign power” to solve the political corruption that took place with the original land act. Fletcher’s case was dismissed and the Georgia act of 1796 was struck down because it violated the Constitution. This marked the first time that the Supreme Court declared a state law unconstitutional. It also set the precedent that the Constitution’s Contract Clause applied to the states. Justice William Johnson wrote a dissenting opinion.

Precedent Set

Though the Court’s ruling was adjusted almost two decades later in another contract case, Charles River Bridge v. Warren Bridge (1837), it remained the law until the 1930s and was an obstacle for state governments attempting to regulate businesses within their borders. In 1934, in the midst of the Great Depression, the Court set a new limited precedent allowing states to modify contracts in the name of public welfare.

Additional Context

Neither the United States nor Georgia purchased the land from the Yazoo Nation so there was the legal question of whether they had the right to sell it in the first place. While the topic of Native American property rights was briefly discussed during the trial, those rights were decided to be “occupancy for the purpose of hunting…they have no…title to the soil…it is overrun by them, rather than inhabited. It is not true and legal possession.” These ideas would shape Native American nation property rights for the foreseeable future.