Asbury Hospital v. Cass County

Background

A Minnesota non-profit corporation owned a tract of farm land in Cass County, North Dakota. It acquired the land in satisfaction of a mortgage and leased it to farmers. After North Dakota passed a law requiring corporations to dispose of farm land within ten years or face county seizure and sale, the company sued in state court saying the law was unconstitutional as applied to its property because it could not recover its original investment in that time.

Reasoning

The Court considered whether a state may force a foreign corporation that owns farm land to sell within a set time and allow the county to take and publicly sell the land if it does not. Relying on the state’s power to exclude or limit foreign corporations, the Court held that requiring a sale within ten years, with court-supervised public auction reasonably calculated to realize value, does not deny basic fairness. The Court also found the Legislature’s exceptions for land-dealer corporations and certain farm cooperatives reasonably related to the law’s purpose and not an equal protection violation.

Real world impact

The ruling allows North Dakota to enforce its ten-year rule and escheat-and-sale process against corporate farm owners, reducing constitutional protection for foreign corporations that hold land in the State. Two issues — whether the statute requires accounting for rents between seizure and sale, and whether certain post-1932 acquisitions are exempt — were dismissed here without a final decision by this Court.

Dissents or concurrances

Justice Black stated that the appeal should be dismissed for lack of a substantial federal question, indicating he would not reach the constitutional claims.