Canadian Nat. Ry. v. Sprague

• Decision Date: 30 June 1992
• Citation: 609 A.2d 1175
• Parties: CANADIAN NATIONAL RAILWAY v. Phineas SPRAGUE, Sr. and Portland Yacht Services, Inc.
• Court: Maine Supreme Court

Page 1175

609 A.2d 1175

CANADIAN NATIONAL RAILWAY v. Phineas SPRAGUE, Sr. and Portland Yacht Services, Inc.

Supreme Judicial Court of Maine.

Argued March 4, 1992.

Decided June 30, 1992.

E. Stephen Murray (orally), Murray, Plumb & Murray, Portland, for appellant.

Deborah M. Mann (orally), Jensen, Baird, Gardner & Henry, Portland, for appellee.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD and COLLINS, JJ.

COLLINS, Justice.

Phineas Sprague, Sr. and Portland Yacht Services, Inc. (Sprague) appeal from a judgment entered in the Superior Court (Cumberland County, Alexander, J.), adopting a referee's report in which the referee found that Sprague's easement across Canadian National Railways' (CNR) property had been abandoned and extinguished. On appeal, Sprague argues that the referee premised its conclusions of law on several clearly erroneous findings of fact and that the Superior Court erred in refusing to reach the merits of some of Sprague's objections to the referee's report. We affirm the judgment.

In 1845, the Maine Legislature gave the Atlantic and St. Lawrence Rail Road Co. (A. & St.L.R.R. Co.) permission to construct a railroad from Portland to the Canadian border. The railroad was designed to link Portland with Montreal. The A. & St. L.R.R. Co. was given the authority to condemn private property in order to lay the tracks. It was also given the authority to cross state-owned submerged lands. Where the A. & St.L.R.R. Co. built bridges crossing tidal waters it had to avoid unnecessary interference with the navigation of those waters.

In 1846, the Legislature gave the A. & St.L.R.R. Co. the authority to condemn additional property on the Portland waterfront for the construction of a railroad station. The A. & St.L.R.R. Co. was also given express authority to build a sea wall and docking facility.

The Portland Company was a foundry. The foundry was located on Portland's waterfront. The foundry was to the east of the station and its property abutted that of the A. & St.L.R.R. Co. The Portland Co. manufactured heavy equipment for the railroad and shipping industries and owned a wharf that it used to load and unload its goods.

In 1848, the A. & St.L.R.R. Co. built a trestle bridge over the tidal waters that ran from a point a little to the west of the station along the waterfront in front of the foundry and further east to a point of land. The bridge cut off all seaward access to the Portland Co.'s wharf. The Portland Co. built a new wharf that extended further into the harbor, ending near the bridge, and proceeded to load its goods over the bridge.

The Portland Co. applied to the County Commissioners for relief, citing existing laws that guaranteed riparian owners access to the harbor and the 1845 Act that required the A. & St.L.R.R. Co. to compensate private property owners for any land taken for the construction of the railway. In 1850, the A. & St.L.R.R. Co and the foundry negotiated an agreement. The agreement gave the foundry the right to extend a 150 foot-wide wharf from the shore to the trestle and beyond, incorporating the tracks into the dock. Portland Co. was granted an easement and the right to build a single track from its foundry, across the A. & St.L.R.R. Co.'s tracks and out onto the wharf.

The A. & St.L.R.R. Co. then built a sea wall on the seaward side of the trestle bridge and proceeded to fill the land on the leeward side. Over a period of six years both the A. & St.L.R.R. Co. and Portland Co. filled in the leeward property until what once was a bridge became a causeway.

In 1865, the Grand Trunk Rail Road, the new owner of the railway, and the Portland Co., which at that time was building locomotives for Grand Trunk, exchanged documents that expanded on the 1850 agreement. That agreement established a boundary line between Grand Trunk and the foundry on the filled lands. The land from the sea wall to the new boundary line belonged to Grand Trunk and encompassed the tracks. The Portland Co. retained the right to cross Grand Trunk's property to reach its dock and the ocean.

Between 1865 and 1871, the Portland Co. filled in and improved its wharf on the seaward side of the sea wall. This filled area became known as the wharf head and contained buildings as late as 1940. The wharf head is 150 feet wide and extends 15 feet into the harbor. It is currently used by Sprague as a location for a cement pad and crane, and as an anchor for ramps leading to Sprague's marina.

The railroad property has changed hands several times and is now owned by CNR. The Portland Co.'s property also changed hands several times and in 1973 was owned by United Industrial Syndicate (UIS). In 1973, the State of Maine began planning a marine terminal on Portland's waterfront. The terminal was to be located in front of the CNR and UIS properties. CNR gave the State a deed, transferring its rights to all submerged, unfilled lands fronting its property and some upland including a strip of upland 26 feet wide, abutting the sea wall and to the west of UIS. UIS gave the State a deed to all its rights in the submerged unfilled lands in front of its property, the wharf head, and all its rights in a 26 foot-wide strip in front of its property (of which CNR was the record owner). The result of the two transactions was that the State owned the property along the sea wall to the west of UIS's property, but only owned an easement across CNR's waterfront property in front of UIS. In 1974, the State abandoned its plan for the terminal and transferred its title to the waterfront lands to the City of Portland. In 1987, CNR abandoned its tracks in front of Sprague's property.

Sprague purchased the UIS property in 1978. Sprague negotiated a lease with the State for the use of filled and unfilled submerged lands in front of its property and to the seaward side of CNR's property. The lease was for the same area that Sprague's predecessors in title had been granted access to by the A. & St.L.R.R. Co. and Grand Trunk in the 1850 and 1865 agreements. The lease is in effect until 1998.

In 1981, Sprague started Portland Yacht Services, a boat building, service, and storage business. In 1988, the State gave Sprague a permit to construct a floating wharf system and install a crane. Sprague repaired the old wharf head, and installed a crane on it. Sprague also connected the wharf system to the wharf head.

In 1988, CNR filed an action for trespass and nuisance against Sprague, alleging that the 1974 deed from UIS to the State had extinguished the Portland Co.'s historical crossing rights, thus eliminating all ocean access for the Sprague property. The action was referred to a referee. The parties stipulated to a record and reserved the right to object to the report. In his final report, the referee concluded that UIS had abandoned the easement across CNR's property, that CNR owned the twenty-six foot-wide strip of land along the sea wall in fee, and that all of Sprague's improvements to the wharf head constituted trespass.

Sprague filed objections to the referee's report and moved for rejection or modification of the report. After a hearing, the Superior Court adopted the referee's report. Sprague then unsuccessfully moved for reconsideration and this appeal followed.

I.

The Superior Court refused to reach the merits of some of Sprague's objections to the referee's report concerning the nature of CNR's interest in the waterfront property. In those objections, Sprague argued that CNR only had a license to build its trestle bridge and never had a fee interest in the land. The Superior Court held that Sprague had failed to raise the issue of the effect of the law of submerged lands and the 1845 Act on CNR's ownership of the property before the referee and could not pursue the issue for the first time by way of an objection to the report.

Sprague contends that the issue was raised before the referee. In his report, the referee does refer to the law of submerged lands; however, it is in reference to ownership of the wharf head, not the land upland of the sea wall. Whether the land upland of the sea wall was submerged or tidal land was never determined. On the other hand, the wharf head extending from the sea wall seaward was clearly built over submerged lands and the law of submerged lands is indisputably applicable. Sprague did raise the issue of CNR's title to the waterfront property in his complaint. However, he did not pursue the argument before the referee.

The referee in this matter was asked to make findings of fact and conclusions of law. If he had been limited to finding facts, it may have been appropriate for Sprague to advance a novel legal theory for the first time before the Superior Court. However, because the referee was empowered, by agreement of the parties, to resolve legal issues in the case, Sprague was obligated to present his...