Asbury Hosp. v. Cass County
326 U.S. 207 (1945)

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U.S. Supreme Court

Asbury Hosp. v. Cass County, 326 U.S. 207 (1945)

Asbury Hospital v. Cass County

No. 35

Argued October 10, 11, 1945

Decided November 5, 1945

326 U.S. 207

Syllabus

A statute of North Dakota requires corporations owning farm land, except such as is reasonably necessary in the conduct of their business, to dispose of it within 10 years from the effective date of the Act. Farm land owned by any corporation in violation of the Act is subject to escheat to the county wherein such land is located, to be effected by a judicial proceeding to which the corporation must be a party. The county is required to dispose of the land at public sale within one year after escheat, and to pay the proceeds to the corporation. Appellant, a foreign corporation owning farm land in North Dakota which it had acquired prior to the effective date of the Act, sought in the state courts a declaratory judgment of unconstitutionality of the Act as applied to it.

Held:

1. A corporation is not a "citizen" within the protection of the

Page 326 U. S. 208

privileges and immunities clauses of Article IV, § 2 and the Fourteenth Amendment of the Federal Constitution. P. 326 U. S. 210.

2. Appellant, by the mere acquisition of land within the State before the enactment of the statute, did not acquire contract rights which it could assert against the State. P. 326 U. S. 211.

3. The statute does not violate the due process clause of the Fourteenth Amendment. P. 326 U. S. 211.

(a) Due process does not prevent a State from excluding a foreign corporation which has theretofore lawfully entered the State and acquired immovable property there, though the corporation will thereby be compelled to sell the property. P. 326 U. S. 211.

(b) The power of a State to exclude a foreign corporation includes the power to compel the corporation to sell its immovable property within the State without also requiring it to end all its activities there. P. 326 U. S. 212.

(c) A state statute, otherwise valid, requiring a foreign corporation to sell property within the State does not deny due process notwithstanding that, due to economic conditions prevailing since enactment of the statute, the corporation will not recoup its original investment in the property. It is enough that, here, the corporation, in complying with the lawful command of the State to part with ownership, is afforded a fair opportunity to realize the value of the land, and that the sale, when required, is to be under conditions reasonably calculated to realize its value at the time of the sale. P. 326 U. S. 212.

4. The statute's exemption of lands of corporations whose business is dealing in farm lands, and of lands of cooperative corporations 75% of whose members or stockholders are farmers, did not deny to appellant the equal protection of the laws. P. 326 U. S. 214.

5. The questions of the constitutionality of the statute because of its (1) alleged failure to require an accounting of rents and profits for the period between the judgment of escheat and the sale, and (2) alleged exemption of farm lands acquired by corporations by deed or grant subsequent to the date of the statute -- involve the construction and application of provisions of the statute which have not been authoritatively construed and applied by the state courts, and therefore may not appropriately be decided by this Court. Pp. 326 U. S. 213, 326 U. S. 215.

73 N.D. 469, 16 N.W.2d 523, affirmed in part.

Appeal from the affirmance of a judgment in a declaratory judgment proceeding wherein the constitutionality

Page 326 U. S. 209

of a state statute, as applied to the appellant, was sustained.

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