Opinion ID: 1418227
Heading Depth: 1
Heading Rank: 4

Heading: Structures existing prior to the leasing program

Text: A more difficult question concerns those structures for which the Board proposes to require leases and which were constructed prior to the institution of the state's leasing program. We are not concerned, in this case, with wharves which the legislature has expressly authorized by ORS 780.040 and its predecessors, and for which the Board does not require leases. In Coquille M. & M. Co. v. Johnson, supra, we held that a riparian owner could, in the absence of legislative prohibition, build a log boom on the riverbed adjacent to his property. There was, however, no occasion in that case to consider whether the state could, after the construction of the boom, require its removal or charge rent for its occupation of state-owned lands. No question of the power of the state was involved in that case. State Land Board v. Sause, 217 Or. 52, 342 P.2d 803 (1959), is, however, instructive on this issue. That case was a suit for a declaratory judgment and for an injunction and damages against the defendant whose log dump occupied a narrow strip of what the state claimed was tideland on the Tillamook River. The opinion holds that the property in question was not, in fact, tideland and was therefore not owned by the state. An alternative holding, however, is relevant to our present concerns: The land at the locus in quo, according to the record, has no use and no value except as a means for exacting payment from the upland owner for the benefit of the state. In such a case, in balancing the defeasible right of access by the upland owner to navigable waters and his reasonable use thereof, against the interest of the public to the use of the tideland, it is clear that the use of the lands at the locus in quo by the defendants is reasonable and not injurious to the public use. We believe that the above approach to the problem is a reasonable one. It would be anachronistic if the state of Oregon should adopt a rule of law in 1959 which would treat the state as the king of England was treated in his proprietary capacity before the war for independence. It is our belief that the state has failed to establish that the defendants are committing any wrong upon the locus in quo which entitles it to the relief which it seeks. The evidence fails to show that the state has any need whatever for the strip of purported tideland. The defendant's use of it, if the land is deemed tideland, does not interfere with navigation  to the contrary, it is an aid to navigation. The state, assuming that the strip is tideland, is its owner. If it ever requires the land's use for any public purpose it can obtain its possession. 217 Or. at 77-78, 342 P.2d at 815-816. It is clear from the quoted portion of the opinion that we did not regard the riparian owner's occupation of adjacent state-owned tidelands as creating a vested property right which could not thereafter be taken by the state without compensation. We described the riparian owner's right of access to navigable waters as defeasible, and clearly stated that if the state ever requires the land's use for any public purpose it can obtain its possession. There is no suggestion that compensation would have to be paid in such an event. Plaintiffs, of course, emphasize the other aspect of the quoted portion of the opinion  our refusal to recognize the collection of rent as a public purpose which would justify the state's assertion of its proprietary rights in the land. That aspect of the case is no longer controlling. It was decided in 1959. Since that time, both the people [13] and the legislature [14] have approved the Board's management of these state-owned lands for the purpose of generating revenue. In the Sause case, prior to these enactments, we struck a balance between the riparian owner's defeasible right of access and the interest of the public in the use of the tideland. Nothing in the decision or its rationale prevents the legislature from striking a different balance. It has now done so. [15] In view of our repeated description of the riparian privilege to construct navigational structures on state-owned submerged or submersible land as a passive or implied license, the Court of Appeals turned to the private law of licenses to determine the rights of those riparian owners who exercised the privilege before the institution of the leasing program. Between private parties, the general rule is that when expenditures have been made to construct permanent improvements on another's land in reliance on an express license to do so, the license cannot thereafter be revoked, at least without payment of compensation. This rule is, however, limited to expenditures made in reliance on an express license or agreement, and does not apply where the landowner has not given express permission, but has merely silently acquiesced or failed to object to the improvements. See, e.g., Heisley et al. v. Eastman et al., 102 Or. 137, 152, 201 P. 872 (1921); Shaw v. Proffitt, 57 Or. 192, 213, 109 P. 584, 110 P. 1092 (1910); Ewing v. Rhea, 37 Or. 583, 62 P. 790 (1900). See also Brown v. Eoff, 271 Or. 7, 530 P.2d 49 (1975). The Oregon cases are collected, and their rationale examined, in Comment, 31 Or.L.Rev. 242 (1952). These cases suggest that when a license becomes irrevocable under the general rule, the rights acquired by the licensee are perpetual. However, in Rouse v. Roy L. Houck Sons', 249 Or. 655, 660, 439 P.2d 856, 858 (1968), in which the purported license was for a five-year term, we said: A licensee under such a license who has made expenditures of capital or labor in the exercise of his license in reasonable reliance upon representations by the licensor as to the duration of the license is privileged to continue the use permitted by the license to the extent reasonably necessary to realize upon his expenditures. Restatement of Property § 519(4). In that case we did not find the necessary expenditures in reliance on the licensor's representations, and so did not have occasion to apply the Restatement rule. The Court of Appeals held the rule applicable in this case, however, concluding that riparian owners who had built structures on state-owned submerged and submersible land prior to the Board's institution of its leasing program had done so in reasonable reliance on the continuing availability of their license to occupy that land and were therefore entitled to maintain those structures rent free for whatever period of time was necessary to permit them to recoup their investments. The difficulty with applying the general rule in this case is that, as pointed out above, it has been held applicable only where the license to use the land was express. We have consistently described the riparian owner's license under consideration here as a passive or implied license. The Court of Appeals, mindful of this problem, found the necessary affirmative license or representation in the decisions of this court which recognized the riparian privilege to construct navigational structures on the state's land. That recognition, however, was of a revocable privilege or license, not of a perpetual license or one of any particular duration. We cannot agree with the Court of Appeals that the legislature is estopped to revoke the privilege by the decisions of this court which declare that only a revocable privilege exists. While application or pronouncement by this court of a rule of property law may create vested rights, our recognition that a privilege exists until prohibited by the legislature does not entitle those who choose to exercise that privilege to assume that the legislature will not act to limit or prohibit it in the future. In short, we find that the Board's requirement that riparian owners who have taken advantage of the legislature's past failure to prohibit their exclusive occupation of the state's submerged and submersible land pay rental for the privilege of continuing to do so in the future does not violate any right of property. Leases may, therefore, be required of those parties who claim riparian status and who have exercised in the past the privileges accompanying that status.