Court Opinion

ID: 9671217
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:32:58.710181+00
Date Added: 2024-06-11T18:16:08.799677
License: Public Domain

ON PETITION FOR REHEARING
TEIGEN, Justice.
The plaintiffs, who are the respondents in a petition for rehearing, reargue several points previously raised, argued and considered by this court. Succinctly stated, these points are: (1) that the business prohibition clause contained in Section 10-06-01, N.D.C.C., is not without limitation and that the exception, in addition to being applied to co-operative farms, must also be held applicable to Sections 10-06-02 and 10-06-03, N.D.C.C.; (2) that said Sections 10-06-02, 10-06-03 and 10-06-06, N.D.C.C., empower any corporation, including a corporation formed for the purpose of engaging in the business of farming, to own farm land and to engage in the business of farming; and (3) that, since the Corporate Farming Law provides that any corporation may farm and own rural real estate for a *589period of ten years, there is no absolute ban on corporate farming. The points listed are merely a restatement of arguments which were made in the original presentation to this court and which were considered by this court before its opinion issued.
Rule 16 of the Rules of Practice in the Supreme Court of North Dakota sets forth that a petition for rehearing “must not be a restatement or reargument of matters contained in the brief,” and that such petition must distinctly point out something which has been overlooked in the statutory provisions or the controlling principles of law, or which was not called to the attention of the court on argument or in the briefs. Parker Hotel Company v. City of Grand Forks, 177 N.W.2d 764 (N.D.1970); Fish v. France, 71 N.D. 499, 2 N.W.2d 537 (1942).
However, the petitioners in this petition have raised two new points which were not raised or argued at the time of the original presentation of the matter to this court; neither were these matters raised in the summary judgment proceedings in the trial court. Petitioners now argue that to deny them a certificate of incorporation deprives them of their right to equal protection of the law under the State and Federal Constitutions, and grants a special privilege to nonfarming corporations; that this is in violation of Sections 1, 11 and 20 of the North Dakota Constitution and Section 1 of the Fourteenth Amendment to the Federal Constitution. The second point raised is that the Corporate Farming Law, as interpreted, violates Section 70 of the North Dakota Constitution which prohibits special legislation.
We will first consider the argument that Sections 1, 11 and 20 of our constitution and Section 1 of the Fourteenth Amendment to the Federal Constitution are violated.
Section 1 of the North Dakota Constitution provides:
“All men are by nature equally free and independent and have certain inalienable rights, among which are those enjoying and defending life and liberty; acquiring, possessing and protecting property and reputation; and pursuing and obtaining safety and happiness.”
Section 11 of the North Dakota Constitution provides:
“All laws of a general nature shall have a uniform operation.”
Section 20 of the North Dakota Constitution provides:
“No special privileges or immunities shall ever be granted which may not be altered, revoked or repealed by the legislative assembly; nor shall any citizen or class of citizens be granted privileges or immunities which upon the same terms shall not be granted to all citizens.”
Section 1 of the Fourteenth Amendment to the Federal Constitution provides:
“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”
The petitioners contend that the Corporate Farming Law, as construed by our decision, has denied them equal protection of the law as guaranteed by the above constitutional provisions. In support of this argument they argue that Sections 10-06-03 and 10-06-04, N.D.C.C., allow a general business corporation to own and farm rural real estate for a ten-year period. Yet the petitioners’ proposed corporation would not qualify for that limited exception since the specific purpose for which *590it was intended to be formed was to engage in the business of farming. They reason the effect is that a nonfarm corporation, such as General Motors or the Ford Motor Company, may own and farm rural real estate for ten years but the same privileges are denied to the petitioners’ proposed corporation because its business would be that of farming and ranching. They argue that our interpretation of the Corporate Farming Law allows a corporation to farm land which is not reasonably necessary in the conduct of its business for a ten-year period, yet disallows a corporation formed for the purpose of engaging in the business of farming from farming the same land for a similar period. They argue that this incongruity constitutes a denial of equal protection. Therefore the petitioners claim that, under the equal protection feature of the State and Federal Constitutions, they must be permitted to form a corporation to engage in the business of farming, although the corporation may be required to dispose of such farm lands as are not reasonably necessary in the conduct of such business after ten years. However, such lands as are reasonably necessary in the conduct of their business of farming or agriculture need not be disposed of within the ten-year limitation period. They argue that there is no difference that would justify the resulting discrimination. They state:
“In short, it would constitute an invidious discrimination against the respondents to deny them the privilege, as other corporations now have, to- own and farm any tract of rural real estate for at least a ten year period at the end of which time the crucible under the ‘reasonably necessary’ test must be met.”
They ask what “evil” is to be avoided in prohibiting a corporation from engaging in the business of farming or agriculture and permitting a corporation engaged in another type of business to farm for a period of ten years.
Section 131 of the North Dakota Constitution provides:
“ * * * the legislative assembly shall provide by general laws for the organization of all corporations hereafter to be created, and any such law, so passed, shall be subject to future repeal or alteration.”
Section 137 of the North Dakota Constitution provides:
“No corporation shall engage in any business other than that expressly authorized in its charter.”
Section 10-06-01, N.D.C.C., provides:
“All corporations, both domestic and foreign, except as otherwise provided in this chapter, are hereby prohibited from engaging in the business of farming or agriculture.”
We pointed out in the original opinion that a distinction exists between the purposes of a corporation and its powers. The Corporate Farming Law clearly prohibits any corporation, except co-operative corporations, seventy-five per cent of whose members or stockholders are actual farmers residing on farms or depending principally on farming for their livelihood, from engaging in the business of farming or agriculture. The State’s objective in enacting the Corporate Farming Law is to prohibit all corporations, except qualified co-operative corporations, from engaging in the business of farming or agriculture. Thus if the General Motors Corporation and the Ford Motor Company, mentioned by the petitioners, are authorized under their foreign charters to engage in the business of farming in addition to the manufacture and sale of motor vehicles, such corporations are, under the Corporate Farming Law, prohibited from engaging in the business of farming or agriculture in North Dakota, and the ten-year ownership limitation provided by Sections 10-06-02 and 10-06-03, N.D.C.C., would not be applicable unless it could be shown that such lands *591were acquired or held for a purpose authorized under their charters, other than engaging in the business of farming or agriculture, in which event the ten-year limitation upon ownership would he operative. Thus all corporations, both domestic and foreign, are prohibited from engaging in the business of farming or agriculture, irrespective of the purpose, or purposes, for which they were formed, with the single exception of a qualified co-operative corporation as defined in Section 10-06-04, N.D.C.C.
The United States Supreme Court in Asbury Hospital v. Cass County, 326 U.S. 207, 66 S.Ct. 61, 90 L.Ed. 6 (1945), held:
“The legislature is free to make classifications in the application of a statute which are relevant to the legislative purpose. The ultimate test of validity is not whether the classes differ but whether the differences between them are pertinent to the subject with respect to which the classification is made.”
It affirmed the holdings of this court in its decisions in that case as reported in 72 N.D. 359, 7 N.W.2d 438 (1943) and 73 N.D. 469, 16 N.W.2d 523 (1944). In that case our court held that the provisions of the Corporate Farming Law excepting lands owned and held by a corporation whose business is dealing in farm lands and lands belonging to co-operative corporations, seventy-five per cent of whose members or stockholders are farmers residing on farms or who depend principally upon farming for their livelihood, do not violate the equal protection clause of the United States Constitution. The United States Supreme Court, in Asbury, stated:
“ * * * We cannot say that there are no differences between corporations generally and those falling into the excepted classes which may appropriately receive recognition in the legislative application of a state policy against the concentration of farming lands in corporate ownership.
“ * * * Statutory discrimination between classes which are in fact different must be presumed to be relevant to a permissible legislative purpose, and will not be deemed to be a denial of equal protection if any state of facts could be conceived which would support it.” As-bury Hospital v. Cass County, 66 S.Ct. 61, 65.
Courts are not concerned with the wisdom of legislation. It is not for us to determine whether the act banning corporate farming as a business is a wise or an unwise enactment. We are concerned only with the legislative power.
It is a matter of common knowledge that North Dakota is an agricultural state. Its principal industry is that of farming. It is also common knowledge that prior to the enactment of the Corporate Farming Law there were corporations in existence which were organized and operated for the purpose of engaging in the business of farming and agriculture. These corporations farmed huge tracts of land in this State in competition with individual farmers. It must be presumed that the people of the State, before enacting the Corporate Farming Law by initiated measure in 1932, and the legislators, when they amended the law in 1933, informed themselves and determined that to prohibit corporate farming as a business, except for qualified co-operatives, was necessary to protect the economy of the State and the welfare of its citizens. At the same time they recognized that corporations engaged in a business other than farming were empowered to acquire and hold rural real estate suitable for the purpose of farming and, therefore, the tenure of such holdings was limited for a prescribed maximum number of years to enable these corporations to dispose of their holdings, but excepting from the limitation such lands as were reasonably necessary in the conduct of their businesses. This exception relates to a business other than farming or agriculture. Thus the exception would be opera*592tive as to lands acquired for a future plant site, or acquired as the result of the foreclosure of a mortgage, or for such other business of the corporation, authorized under its charter, the purpose of which is to engage in a business other than the business of farming or agriculture. A corporation not formed for the purpose of engaging in the business of farming or agriculture cannot engage in farming as a business as no corporation shall engage in any business other than that expressly authorized by its charter. Section 137, North Dakota Constitution. Section 10 — 06— 01, N.D.C.C., effectively prohibits the issuance of a charter to a corporation to engage in the business of farming or agriculture, except to co-operative corporations which qualify under Section 10-06-04, N.D.C.C., which section provides that the Corporate Farming Law shall not be construed to prohibit co-operative corporations, seventy-five per cent of whose members or stockholders are actual farmers residing on farms or depending principally on farming for their livelihood. The exemption of co-operatives, by this section, is a reasonable classification and does not deny other corporations equal protection of the law within the meaning of the Fourteenth Amendment to the United States Constitution. Asbury Hospital v. Cass County, supra.
Thus the people, by the initiated act, and the legislature, by amendment to the initiated act, have classified corporations organized to engage in the business of farming or agriculture as a separate class of corporations which are prohibited from doing business in this State, by declaring that the business of farming or agriculture is an unlawful corporate purpose except when conducted by a qualified co-operative corporation. Under the circumstances, we find this to be a reasonable classification on the basis that the difference between a corporation organized for the purpose of engaging in farming or agriculture and a corporation organized for other business purposes is pertinent to the subject to which the classification is made, is relevant to a permissible legislative purpose, and is not a denial of equal protection under either the State or Federal Constitution.
“Corporations as creatures of the law may, within reasonable limits, be divided into classes, and each class given such rights, capacities, and powers as the legislature may see fit. For this reason a corporation may not necessarily have the right to complain of a discrimination in favor of other classes of corporations or that all or any of the rights of natural persons have not been given to it. Generally speaking, the action of the state in so classifying corporations and in conferring different powers upon them is not in contravention of the Fourteenth Amendment of the Federal Constitution. Legislation which applies equally to all corporations in like circumstances and which makes a natural and reasonable classification is not vicious class legislation. If a classification of corporations for the purpose of legislation is natural and reasonable and based on some distinctive difference in the business of the several classes, a difference peculiar to and inhering in its very nature, it is valid and will be sustained. In order, however, to justify diversity of treatment of corporations, the classification must be founded on differences either defined by the Constitution or such as are natural or intrinsic and reasonable.” 16 Am.Jur.2d, Constitutional Law, Section 519.
We believe there is a reasonable basis for the classification made, and that the people and the Legislature did not make such an arbitrary or unreasonable discrimination as to constitute a denial of the equal protection of the law or the requirement that all laws of a general nature shall have a uniform operation.
Lastly, the petitioners contend that our construction of the Corporate Farming Law violates Section 70 of the North *593Dakota Constitution. This section provides :
“In all other cases where a general law can be made applicable, no special law shall be enacted; nor shall the legislative assembly indirectly enact such special or local law by the partial repeal of a general law, but laws repealing local or special acts may be passed.”
In support of their contention that the Corporate Farming Law, as interpreted in our opinion, violates this section of the Constitution, the petitioners argue that they, as citizens, are not treated as other citizens under like circumstances and conditions. They say that this is so because “other citizens may incorporate a general business corporation and engage in the business of farming on any particular piece of real estate for at least ten years while the respondents are denied the same privilege because of the fact that they have chosen to designate the purpose of their corporation as that of farming.” [Emphasis added.] The premise of this argument is false. A general business corporation may not engage in the business of farming or agriculture. Section 10-06-01, N.D.C.C., specifically prohibits all corporations, except qualified co-operatives, from engaging in the business of farming or agriculture in this State. The Corporate Farming Law applies equally to all citizens, without any discrimination, who desire to form a business corporation, and not a co-operative, for the purpose of engaging in the business of farming or agriculture. It operates alike on all persons who come within its provisions.
For the reasons stated herein, the petition for rehearing is denied.
STRUTZ, C. J., and ERICKSTAD, PAULSON and KNUDSON, JJ., concur.