Fletcher v. Peck
6 Cranch 87 (1810)
Rule of Law:
A state legislature cannot pass a law that retroactively invalidates a contract, including a fully executed land grant. The Contract Clause of the U.S. Constitution applies to public contracts to which the state itself is a party.
Facts:
- In 1795, the Georgia state legislature passed a law authorizing the sale of large tracts of state-owned land to four private companies.
- The governor of Georgia executed the land grant in accordance with the 1795 act.
- It was later discovered that the passage of the 1795 act was secured through widespread bribery of the legislators.
- In 1796, a newly elected Georgia legislature passed a Rescinding Act, which voided the 1795 law and invalidated all land titles transferred under it.
- John Peck had purchased a parcel of land that was part of the original 1795 grant.
- Peck later sold this land to Robert Fletcher, including in the deed a covenant that the title had not been legally impaired by any subsequent act of the Georgia legislature.
Procedural Posture:
- Robert Fletcher filed a lawsuit against John Peck in the United States Circuit Court for the District of Massachusetts for breach of a covenant of title.
- Fletcher's claim was based on the assertion that Georgia's 1796 Rescinding Act had voided the title to the land Peck sold him.
- The Circuit Court found in favor of the defendant, Peck, holding that his title was valid.
- Fletcher, the plaintiff, appealed the decision to the Supreme Court of the United States on a writ of error.
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Issue:
Does a state law that rescinds a prior, legally executed legislative land grant and declares it void violate the Contract Clause of the United States Constitution?
Opinions:
Majority - Marshall, Ch. J.
Yes, a state law that rescinds a prior, legally executed land grant violates the Contract Clause. A grant is an executed contract, the obligations of which are protected from legislative impairment. The court reasoned that a grant is a contract between two parties, and the Constitution's general language regarding contracts does not distinguish between those that are executed (like a grant) and those that are executory (a promise to do something). Once a state makes a grant, the rights to the property have vested in the grantee, and a subsequent legislature cannot undo what a prior legislature has done to divest those rights. The Contract Clause was intended to protect property rights from such legislative interference, and it applies equally to contracts made by a state as it does to contracts between private individuals. The alleged corruption in the original grant does not give a legislature the power to punish innocent subsequent purchasers who had no notice of the fraud.
Concurring - Johnson, J.
Yes, a state does not possess the power of revoking its own grants, but this conclusion rests not on the Contract Clause but on general principles and the nature of things. A state cannot simply revoke its own grants because once property is conveyed to an individual, the state loses control over it. Justice Johnson expressed doubt that the framers intended the Contract Clause to have such a broad application, finding the term 'obligation of contracts' ambiguous. However, he concluded that a state's act of revoking a grant is invalid based on fundamental principles of justice and government that exist independently of the Constitution's text.
Analysis:
Fletcher v. Peck was a landmark decision that significantly strengthened the Contract Clause and the principle of judicial review over state laws. It established for the first time that a state law could be struck down as unconstitutional for violating a provision of the U.S. Constitution. The ruling broadened the definition of 'contract' to include executed public grants, thereby limiting the power of state legislatures to interfere with vested property rights. This precedent provided stability and security to property and commercial transactions by ensuring that states could not arbitrarily rescind their own agreements.
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