                                   No. 13043

         I N THE SUPREME C U T OF THE STATE O M N A A
                          OR                 F OTN

                                         1975



MARY FRANCESCA PALFFY,

                           P l a i n t i f f and A p p e l l a n t ,



DIRECTOR OF FINANCE O THE CITY
                     F
O BOZEMAN and The C i t y of Bozeman,
 F
Montana,

                           Defendants and Respondents.



Appeal from:    D i s t r i c t Court of t h e Eighteenth J u d i c i a l D i s t r i c t ,
                Honorable W. W. Lessley, Judge p r e s i d i n g .

Counsel of Record :

     For Appellant :

           Bolinger and Wellcome, Bozeman, Montana
           H. A. Bolinger argued, Bozeman, Montana

     For Respondents:

           Berg, Angel, Andriolo and Morgan, Bozeman, Montana
           Ben E. Berg, Jr. argued, Bozeman, Montana



                                                 Submitted:            September 11, 1975



Filed:    <,;
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Mr. Justice Gene B. Daly delivered the Opinion of the Court.
        This is an appeal from a summary judgment granted by
the district court, Gallatin County, in favor of the defendants
Director of Finance of the City of Bozeman and the City of
Bozeman.   The district court at the same time denied plaintiff's
motion for summary judgment.    The case is based upon a special
assessment for a sidewalk levied by the city of Bozeman against
plaintiff's property.   The case was heard, considered and decided
entirely on the pleadings, consisting of the complaint and answer.
        Plaintiff's land within the city limits of Bozeman fronts
on State Highway No. 191 which has a 100 foot wide right of way.
There is 25 feet of unpaved right of way between plaintiff's
property line and the highway pavement.   The City ordered plain-
tiff to install a five foot sidewalk, ten feet from the paved
portion of the highway and fifteen feet from plaintiff's property
line within the right of way of the state highway.   The highway
department of the state was not involved in these proceedings.
Plaintiff refused to install the sidewalk and the city installed
the sidewalk and levied an assessment against plaintiff's land
for costs in the amount of $10,360.07, to be paid in five annual
installments of $2,072.03 plus interest of $153.49 or total in-
stallments of $2,225.52 each.   Plaintiff protested the assessment
and this action resulted.
        On appeal plaintiff's sole issue is that the district
court erred in granting the summary judgment for the reason that
the state highway department has exclusive jurisdiction to let
contracts and control construction in or along the state highway
right of way.
        The city concedes that all streets, including municipal-
ities, are within the primary jurisdiction of the state of Montana.
That the city acts upon authority granted by the state in the
management of city streets and relies on section 11-2226,
R.C.M.   1947, which provides authority to construct sidewalks,
curbs and gutters without the formation of special improvement
districts and the assessment of costs to the property "in front"
of the construction.
         The city contends that section 32-2406, R.C.M.     1947,
"General Power of [Highway] Department" does not usurp or revoke

by implication any of the powers granted the city in section
11-2226.     Section 32-2406 reads:
         "The department may plan, lay out, alter, construct,
         reconstruct, improve, repair, maintain, and the
         commission may abandon highways on the federal-aid
         systems and state highways. The department may co-
         operate and contract with counties and municipalities
         to provide assistance in performing these functions
         on other highways and streets."
         The city reasons that section 32-2134, R.C.M. 1947, which
gives exclusive control over signs and traffic control devices
within municipalities does not mention sidewalks.       The city con-
cludes that it makes no difference that the state of Montana owns
the street as all streets belong to the state of Montana and the
city is but a trustee thereof.        It cites Wood v. City of Kalispell,

131 Mont. 390, 396, 310 P.2d 1058, for authority that the city is
not precluded from building an improvement on a state highway.
         The city has a good case until it gets to ownership by
the state.    It is true the state as a sovereign owns all streets
and local government units are trustees thereof.       Yet, when owner-
ship passes to a department of the state sovereign the broad gen-
eral principles set forth by the state do not always apply or at
least they are restricted or diminished.       Wood, cited to us by
the city, does stand for the proposition that a city can partici-
pate with the department of highways through a special improve-
ment district.    Wood also treats the aspect of highway ownership

which the city failed to consider:
         "The provisions of the Federal Aid Road Act
         require that contracts for projects under that
         act must be let by the highway commission of the
         particular state, 39 Stat. 355, approved July 11,
         1916, as subsequently amended and supplemented,
         23 U.S.C.A., section 1 et seq. The legislature
         of Montana, by R.C.M. 1947, section 32-1609
         [since repealed, now section 32-24011, has
         assented to the terms of the Federal Aid Road
         Act and has authorized the highway commission
         to do all 'things necessary or required to carry
         out fully the cooperation contemplated by said
         act of congress * * * relative to the construc-
         tion and maintenance of roads and highways in the
         State of Montana'.
         "R.C.M. 1947, section 32-1608 [since repealed, now
         section 82A-701.1(2)(4)], provides in part: 'All
         contracts for work on state highways shall be let
         by the state highway commission.' The project in
         the instant case involves two state highways, or
         more particularly, a portion of each of two state
         highways that is also used as a city street. Con-
         tracts for such work clearly must be let by the
         state highway commission.
        "This court, in State ex rel. State Highway Comm.
        v. District Court, 105 Mont. 44, 69 P.2d 112, and
        in Bidlingmeyer v. City of Deer Lodge, 128 Mont.
        292, 274 P.2d 821, recognizes that a city is but
        a subdivision or agent of the state and that by
        assenting to the provisions of the Federal Aid
        Road Act the legislature, as the principal, has
        withdrawn some of the powers previously given to
        its aqent, the municipality.
         "The legislative intent is clear that a city may
         create a special improvement district for street
         improvements where the street is also a part of a
           .
           ,
         state highway and that, in such instance, the con-
         tracts for the work to be done must be awarded by
         the state hiqhway commission." (Emphasis supplied.)
         It must follow from the language cited that the power of
the city can be diminished; that the city can participate with
the state highway department but not independent of it.
        The fact situation here demonstrates the equity of the
rule.   Both parties agree that once the city constructed the im-
provement on the highway right of way, particularly 15 feet with-
in its boundary line, that the highway department could order it
removed with no recourse by the property owner or the city.
        The order granting summary judgment to the city of
Bozeman is reversed and the cause remanded to the district
court for further proceedings not inconsistent with this opinion.




                                             Justice




/   fiief Justice
