Fletcher v. Peck – Corrupt land sale contract not voidable by State

t Marshall1810. Holding. Held that a state cannot abrogate its own contracts, even if the contracts were the product of corruption.

t It thus did exactly what Brennanworried about in United States Trust v. New Jersey: although the voters threw the rascals out, “those same rascals might perpetuate their policies simply by locking them into binding contracts.” (1640)

t Historical background. This was one of the most important decisions of the MarshallCourt, and it had an interesting history. Bribery that led to land sale was open and notorious. One legislator went so far as to respond to criticism that he was selling his vote for $600 when his colleagues were getting $1,000 by saying that “it showed he was easily satisfied and was not greedy.” When one of the sale bills was passed, only one of the legislators voting for it had not been bribed. On the other hand, since the land was clouded by claims from Spain, the federal government, and Indian tribes, it is not clear that the land was worth more than the speculators paid for it. It is unclear as to whether the purchasers (as Marshall assumes) had no notice of the fraud; it is clear that the suit was collusive in that both parties shared a common interest in having the land title upheld.

t Reasoning.

n Marshall’s opinion relied on the Contracts Clause, but it also implied that the law would be unconstitutional even without this express prohibition.

n Johnson’s constitutional transcendentalism went even further: he disclaimed any reliance on the text, instead invoking principles that “will impose laws even on the Deity.”

n Both argued that the social contract prevented government from seizing property from its owners.

t Significance. This was arguably the most important case in 19^th century Constitutional Law (C. Peter McGrath).

n Until near the end of the 19^th century the contract clause was the major constitutional limitation on state legislatures in a period when the states were the source of most laws regulating business interests.

n Between 1810 (year of Fletcher v. Peckand 1889 the contract clause was invoked in almost 40% of all cases challenging the validity of state legislation. In 75 decisions, nearly ½ of the total number voiding state laws, it was the justification for declaring the legislation unconstitutional.

n Constitutionally, the 19^th century was the century of the contract clause.

Date: 2015-01-02; view: 630