Fletcher v. Peck
Fletcher v. Peck must be viewed against the background of land speculation in the 1780s and 1790s. The sale of the Yazoo territory was the most sensational of numerous speculative land ventures in the Early National Period of American history (1780s-1820s). The Yazoo territory consisted of some 35 million acres between Georgia's present boundary and the Mississippi River. While most of it was inhabited by the Muskogee peoples (Creek Indians), Georgia claimed ownership and the Georgia legislature asserted its right to sell the land. From the 1780s on, one governor and legislature after another gave away millions of acres to speculators. The largest single sale was made in 1795 to a Yazoo land company. That company had among its members two US senators, two congressmen, three judges (one of the US Supreme Court), and a territorial governor. The Yazoo company operated with advanced knowledge that a treaty with Spain would soon be signed in which Spain would relinquish title to this land (and thus enhance the value of the land.

After the sale, the repeal became a serious local political issue on which the Jeffersonian Republicans rode to power in Federalist Georgia. Peck was among those who claimed title from a sale conducted by the Federalist state legislature; and it was the new Republican state legislature that repealed the original sale act. The speculators (Peck as well as Fletcher) did not really want title. Rather, they hoped that a court ruling in their favor would put pressure on the national government to take over the Yazoo territory and compensate people who had bought land from Georgia. Victory in the Supreme Court was not seen as a way of gaining title to the land as much as an advantage in the battle to win compensation from Congress.

The case was initiated when Robert Fletcher of New Hampshire sued John Peck of Massachusetts for a broken covenant. Fletcher claimed that Peck had sold him something that he (Peck) did not rightfully possess: 15,000 acres of land in western Georgia (part of the Yazoo territory occupied by the Muskogee Indians). Fletcher claimed that the sale was not good because:

1. Georgia never had title to the land and thus could not transfer it to Peck (who subsequently sold it to Fletcher).

2. The sale in 1795 by Georgia to Peck was not good because of fraud on the part of Peck in obtaining the land.

3. The sale from Peck to Fletcher was not good because the Georgia legislature had repealed the act that gave Peck title.

Note the order of the activities in the case: Georgia claimed the land; in 1795, they sold the land to speculators, among whom was John Peck; in 1796 a "new" Georgia legislature repeals the act under which the land has been sold to Peck; Peck, nevertheless, sold his land to Fletcher; Fletcher "discovered" that the sale is not what he thought it was and that Peck does not have a clear title; Fletcher went to court to invalidate the sale based on the three arguments above.

The suit was filed in June of 1803 in the U.S. Circuit Court of Massachusetts. In 1807 the circuit judges upheld Peck on every point. (Note: the case came within federal judicial power because Fletcher and Peck were from different states.) Fletcher, who lost in the circuit court, carried an appeal to the US Supreme Court.

In the Supreme Court the case was argued by Joseph Story for Peck (Story was a friend of Marshall's and would later serve with him and later with Taney on the Supreme Court). Fletcher's position was argued by Luther Martin of Maryland, and the Court had to adjourn several times because Martin came drunk. This points to the collusive nature of the suit: both Fletcher and Peck wanted the suit decided in Peck's favor because both wanted to establish that validity of the original land titles (such as Peck) held under the act of the first Georgia legislature. Fletcher, like Peck, was a land speculator who stood to profit from Peck winning the case.

Fletcher v. Peck: The Opinion

1. Issue: did Peck have title to the land and could he sell the land to Fletcher?

2. Marshall's decision: Yes.

3. Marshall's reasoning:

a. nothing in the state constitution prohibited the sale in 1795 of land to Peck (note this is a US court deciding a problem of state law in a case where the state is not a party).

b. that the sale can not be overturned because of fraud. The court will not look at the "motives" of legislation, especially in a case where the state is not a party.

c. if the sale was legal and not voided by fraud, then did the repeal act invalidate the sale? Marshall says no, because:

i. acts done under law can not be repealed even if the law itself can be repealed

ii. no state has the right to take (or take back) property without compensation. Marshall does not fine this in the Constitution (the Vth Amendment does not apply to the States) but does suggest this is a fundamental principle of all governments (a "natural law").

iii. even if not a fundamental value protected implicitly by all governments, the contract clause specifically prohibits the state from abridging contract obligations.

4. Problems with the Marshall opinion:

a. Does the contract clause of the Constitution apply to this type of transaction? The original intent was only that it apply to transactions between private parties. This decision seems to place private property rights above the ultimate right of the state to work for the public good.

b. Should a collusive suit in which one party does not argue the case strongly be used to decide a case?

c. Did Georgia really have title in the first place? If the lands belonged to the Muskogee Indians, could Georgia claim and sell these lands?

Fletcher v. Peck: Implications

Marshall justified his opinion, in part, by suggesting the implications of deciding the case for Fletcher. If, Marshall argued, Fletcher had prevailed, such a decision would have given states complete freedom to abrogate private property rights. Moreover, such a decision, he stated, would make all property transactions risky because no one would ever be sure if fraud at some previous point in a string of transactions had occurred (which could void a subsequent sale). His opinion protected investment, decreased risk, and this encouraged economic development.