In the 1934 case Federal Land Bank of St. Louis v. Priddy, Circuit Judge, the U.S Supreme Court ruled in favor of the Federal Land Bank (FLB) against a Kentucky law that prohibited foreign corporations from owning land within its borders unless they were doing business in the state. The FLB had foreclosed on a farm and was attempting to sell it when they encountered resistance due to this law. The court held that as an entity created by Congress under federal statute, FLB was not subject to such restrictions imposed by individual states' laws regarding property ownership rights for foreign corporations because it would interfere with carrying out its federally mandated purpose - providing stable credit supply for farmers and ranchers nationwide.

In the dissenting opinion for Federal Land Bank of St. Louis v. Priddy, Justice Stone argued that the majority's decision to allow a federal land bank to foreclose on a farm without paying state recording fees was incorrect. He believed this interpretation of Congress' intent in creating these banks and exempting them from taxation was too broad. According to him, while it is true that Congress intended for these banks to have certain tax exemptions, they did not intend for them to be completely free from all financial obligations imposed by states where their properties are located. Therefore, he contended that requiring payment of recording fees would not interfere with any federal function or operation as suggested by the majority but rather serve as part of normal business expenses which should be borne by such institutions like other corporations operating within state jurisdictions.