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Fletcher v. Peck

Supreme Court of the United States · 1810 · Constitutional Law

Constitutional LawContracts ClauseState legislative grantsVested property rightsContracts Clausegrant as contractexecuted contractvested rights

Facts

Peck conveyed land in Georgia to Fletcher by deed containing covenants concerning Georgia's title and the legal validity of the original state grant. The land traced back to a 1795 Georgia legislative sale to original grantees, after which the land passed through purchasers for value without notice of alleged corruption in procuring the statute. A later Georgia legislature passed an act rescinding the earlier grant and declaring it void. Fletcher sued on the deed covenants, claiming the original grant was invalid or that the later rescinding act had legally impaired Peck's title.

Issue

Whether Georgia's rescinding act could constitutionally invalidate title that had vested under an earlier legislative grant and passed to a purchaser for valuable consideration without notice. Also, whether the original 1795 grant was beyond the Georgia legislature's constitutional power and whether Georgia had title to the land.

Rule

A grant is a contract, and an executed grant remains protected by the constitutional prohibition against state laws impairing the obligation of contracts. When rights have vested under a law in the nature of a contract, a subsequent legislature cannot devest those rights by repealing or annulling the law. A court of law will not, in a collateral suit between private parties, treat a facially valid legislative act as a nullity based on allegations of corrupt motives influencing some legislators.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In 2018, the legislature of Franklin passed a statute authorizing the governor to convey 5,000 acres of state-owned land near Nashville, Tennessee, to Cedar Bluff Development, which paid the required price and received a deed. Cedar Bluff later sold a parcel to Elena Ruiz for fair market value. In 2022, a newly elected legislature declared the 2018 grant void and ordered the land returned to the state because the earlier sale had been "contrary to the public interest."

If Franklin sues Elena to recover the parcel, which is the strongest argument for Elena under the governing doctrine?

Explanation. The majority held that a grant is a contract within the Contracts Clause and that executed contracts are protected, not just executory ones. Once rights have vested under such a grant, a later legislature cannot undo the completed transfer by rescinding the original law, especially where the property has passed to a purchaser for value.