Case Analysis Essay on Fletcher v. Peck (10 U.S. 87)

In 1795, the legislature of Georgia granted 35 million acres of state land in what is now Alabama and Mississippi to private speculators for the price of 1.5 cents per share.  It was later known that almost all except one of the legislators were bribed to get their approval.   The following year, a new state legislature passed a second act which repealed the fraudulent grant.  Specifically, the second act declared the January 7, 1795 act null and void including all grant or grants of rights, and claims.

Meanwhile in 1800 John Peck purchased some land that was part of the 1795 grant.  In 1803, he sold the 13,000 acres of land to Robert Fletcher for $3,000.  Upon discovering that the state had declared the sale of the land void, he brought suit against Peck for damages arguing that Peck lied to him in promising that he had a good title to the land. 

The federal circuit court ruled in favor of Peck.  Hence, Fletcher appealed to the US Supreme Court.

The issue in this case is whether the 1796 act which repealed the act of 1795 was a violation of the   Art 1, Section 10 of the Constitution or whether the state of Georgia can still repeal the sale even if it had finalized the original sale of the land. Another issue in this case is whether the United States Supreme Court can invalidate an act of the legislature on the ground of violation of the constitution. 

 The United States Supreme Court commented on the corruption within the state legislature. However, they argued that contracts cannot be invalidated simply because the state legislatures which entered into such contracts were corrupt. It said that “A party to a contract cannot pronounce its own deed invalid, although that party be a sovereign State. A grant is a contract executed.”

The Supreme Court ruled that the State of Georgia had violated the Contract Clause of the Constitution when it repealed the grant.   In rejecting the argument that Georgia had the “sovereign power” as agent of the people to repeal it earlier act argued that Peck was an innocent third party who bought the properties on the basis of the state’s first act.  He also sold the land based on the earlier act.  He paid for the land from the original grantee and sold the land to another innocent purchases. The court said that if the law is in the nature of a contract the repeal of the law cannot divest rights that have vested under the contract.  According to Marshall, “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.”

One of the significance of the case of Fletcher v. Peck (10 U.S. 87) is that it declared that the Supreme Court can strike down an act of legislature if it violates the constitution.  Moreover, it established the principle that when the state enters into a private contracts, it cannot strike down these contracts which marks the protection given by the courts to private businesses and commercial interests. 

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