The "Hedgcoxe War" of 1852, also known as the Peters colony rebellion, was an armed uprising of colonists protesting what they viewed as an attempt by the land company to invalidate their land claims. From its inception the colony had been embroiled in controversy regarding the terms of agreement between the land company and the settlers. On February 10, 1852, the state legislature, in an attempt to satisfy both the colonists and the land company, passed a compromise law. According to its terms all lawsuits between the land company and the state were to be withdrawn, the colonists were to be given new guidelines and extended time for filing their claims, and the state was to give the land company 1,088,000 acres of land. But the colonists, concerned over the possible sale of some claims and angered over the legislature's generosity towards the land company, continued their protest and demanded that the law be repealed.
In May 1852 the agent of the land company, Henry Oliver Hedgcoxe, published an explanatory proclamation that stated the colonists had until August 4, 1852, to establish their claims with him. The proclamation, which was viewed by the company's opponents as arrogant and autocratic, contributed to the misinterpretation of the compromise law. The colonists were further aroused when the attorney general, Ebenezer Allen, issued an opinion upholding the law. At a mass meeting of colonists in Dallas on July 15, 1852, Hedgcoxe was accused of fraud and corruption by an investigating committee. On July 16, 1852, John J. Good led about 100 armed men from the mass meeting to Hedgcoxe's office in Collin County. Hedgcoxe's files were seized and removed to the Dallas County Courthouse. No violence was done, but Hedgcoxe was ordered to leave the colony. He fled to Austin the next day. Alarmed by the colonists' actions, the land company adopted a conciliatory tone towards the settlers. On February 7, 1853, an amendment to the compromise law, satisfactory to both sides, was passed. Except for relatively minor adjustments made in the courts and the legislature over the next ten years, the colonists' title difficulties were ended.