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Counties Do Not Possess Sovereign Right of State Is High Court Decree. Helena, Dec. 24.-Montana counties do not posses the sovereign right such as is vested in the state and therefore the county has no preference right over other depositors in banks and becames thereby only a general creditor of the bank. Such is the decision of the supreme court in the opinion delivered by Chief Justice L. L. Callaway, handed down Monday, covering a point now of considerable interest throughout the state and one which has never before been in the supreme court for determination. The opinion was written in the appeal from the district court of Powell county, in the matter of Henry Bignell, Nels O. Opsata and Anton Jacobsen against the receiver of the First State bank of Ovando. These three plaintiffs, together with two others, were sureties upon a bond given by the bank in the sum of $40,000 to protect the treasurer of Pewell county for county funds deposited in the bank. The bank was closed June 16, 1921, at which time the county had on deposit therein $19,926.82, which amount, on demand, was thereafter paid to the treasurer by these plaintiffs. Plaintiffs then brought suit against the receiver of the bank to establish a preference upon all the bank's assets to satisfy the amount they had paid the treasurer. The court found for plaintiffs, who were given a prefence claim upon the bank's assets, prior and superior to any other creditor of the bank. The receiver appealed to the supreme court. The supreme court, in revising the judgment of the dower court, states that the district court acted upon the theory that a county has the same right of preference with respect to deposits in banks which the state enjoys in its sovereign capacity. The supremé court sets this aside with the statement that the sovereign power rests in the state alone; that the county is only a creature of the state which created it and which may abolish it at will, and that the prerogative of the state may not be exercised by its creature in the absence of expressed authority. The judgment of the district court is reversed and the cause is remanded with instructions that the district court enter judgment to the effect that the receiver appoint the claim of plaintiffs as general creditors of the bank only.
