## Facts

- Between about 1962–1964, Earle Seaman loaned his brother Malcolm Seaman $4,500.
- In 1965, Malcolm and his wife executed a promissory note for $4,500 at 5% interest, payable in five years.
- The debt was secured by Malcolm’s remainder (future) interest in a family cottage under a will; the interest would vest when the life tenant died.
- Malcolm did not pay the note when due (around 1970).
- In 1971, Earle recorded the note and an affidavit of default but did not foreclose.
- The brothers later arranged for monthly payments; Malcolm made partial payments in 1977 and 1979 totaling about $900, which Earle accepted.
- In 1982, the life tenant died and Malcolm’s remainder interest became possessory.
- Shortly after vesting, Malcolm tendered what he calculated as full payment to redeem his cottage interest; Earle refused.
- Earle sued for specific performance to obtain Malcolm’s cottage interest; Malcolm counterclaimed to redeem by paying the debt.
- The trial court treated the transaction as an equitable mortgage and allowed redemption, but miscalculated the payoff by failing to credit Malcolm’s prior payments.

## Issues

1. Whether the assignment/transfer of Malcolm’s future cottage interest was intended as an outright conveyance or as security for a debt (an equitable mortgage).
2. If the transaction was an equitable mortgage, whether Malcolm waived the equity of redemption so that Earle could keep the property interest free of redemption.
3. Whether the trial court correctly calculated the amount required to redeem, including credit for prior payments.

## Decision

- The Supreme Judicial Court of Maine affirmed that the transaction was an equitable mortgage securing repayment of the note, not an absolute assignment.
- The court held Malcolm did not waive his equity of redemption.
- The court affirmed Malcolm’s right to redeem by paying the amount due on the note with interest.
- The case was remanded for recalculation of the redemption amount because the payoff failed to credit payments Malcolm had already made.

## Legal Principles

- Courts determine whether a conveyance is a mortgage by examining the parties’ intent and the substance of the transaction; a transfer meant to secure a debt is treated as an equitable mortgage.
- An equitable mortgage carries an equity of redemption allowing the mortgagor to reclaim the property upon full payment of the secured debt and interest.
- A waiver of the equity of redemption is strictly limited; to be effective it must occur after creation of the mortgage and be supported by valuable consideration, and it will not be inferred from ambiguous circumstances.
- A mortgagee’s acceptance of post-default payments and conduct suggesting payment will be accepted can defeat a claim that the mortgagor forfeited or waived redemption.
- When ordering redemption, courts must accurately account for principal, interest, and all prior payments in fixing the redemption price.

## Conclusion

The court treated the brothers’ transaction as an equitable mortgage and protected Malcolm’s right to redeem his cottage interest upon payment of the properly calculated debt, rejecting Earle’s waiver argument and remanding only to correct the payoff calculation to reflect Malcolm’s prior payments.


Seaman v. Seaman, 477 A.2d 734 (Me. 1984)