## Facts

- Thornton D. Ring owned commercial property at 2 Main Street in Freeport, Maine.
- The Town of Freeport assessed real estate taxes against the property and, after nonpayment, sent Ring a lien claim and a 30‑day notice demanding payment.
- When the taxes remained unpaid, the Town recorded a tax‑lien certificate against the property in the registry of deeds.
- The Town later sent Ring a notice of impending foreclosure stating that, absent redemption, the tax lien would be deemed foreclosed and Ring’s right of redemption would expire on March 7, 1997.
- In January 1997, Ring delivered to the Town a check for $11,347.09 issued by Advest, Inc. and made payable to the order of Ring.
- On the back of the check, Ring wrote “Payable To Town of Freeport” and noted that the check was for property taxes on the Main Street property, but Ring did not sign the check.
- With the check, Ring included a signed letter on a separate, unattached sheet stating that he was paying the property taxes and asking the Town to take the steps needed to redeem the property.
- The Town returned the check. Its rejection letter cited a problem related to an earlier tax lien rather than the missing signature on the check.
- Ring took no further action to provide a properly endorsed instrument or other valid payment before the March 7, 1997 redemption deadline.
- The Town filed an action for declaratory judgment that it held title in fee simple absolute to the property following automatic foreclosure of the tax lien. The Superior Court entered summary judgment for the Town, and Ring appealed.

## Issues

1. Whether Ring redeemed the property before automatic foreclosure by tendering a check payable to him that he attempted to transfer to the Town by writing “Payable To Town of Freeport” without signing the check, together with a separate signed letter.
2. Whether the Town was equitably estopped from asserting the check’s ineffective indorsement because the Town’s rejection letter gave a different reason for returning the check.

## Decision

- The Supreme Judicial Court of Maine (Law Court) affirmed summary judgment for the Town.
- The court held that Ring did not redeem the property because the check, payable to Ring, was not effectively indorsed to the Town; Ring’s writing on the back without his signature did not make the instrument payable to the Town or enforceable by the Town.
- The court concluded that the separate signed letter did not cure the defect because an indorsement must be made on the instrument itself (or on a properly affixed allonge), not on an unattached piece of paper.
- Because no legally effective payment was made within the statutory redemption period, the tax lien was deemed foreclosed by operation of Maine’s municipal tax‑lien statute, and title vested in the Town in fee simple absolute.
- The court rejected equitable estoppel, determining that the Town’s failure to mention the indorsement defect in its rejection letter did not bar the Town from later relying on the legal insufficiency of Ring’s tender, and Ring did not show reasonable detrimental reliance that would justify estoppel against a municipality.

## Legal Principles

- Redemption of a municipal tax lien requires timely, legally effective payment of the amount due within the statutory redemption period; an ineffective tender does not stop automatic foreclosure.
- When an instrument (such as a check) is payable to a named payee, transfer to another party generally requires the payee’s indorsement meeting Article 3 requirements; a transfer notation without the payee’s signature is not a valid indorsement.
- An indorsement must be written on the instrument or on a paper affixed to it (an allonge); a separate, unattached letter cannot function as an indorsement.
- A municipality is not required to accept, treat as payment, or process a check that is not properly payable to it or that it cannot enforce as a holder.
- Equitable estoppel against a governmental entity is limited; it requires misleading conduct and reasonable detrimental reliance, and the government’s incomplete or mistaken explanation for rejecting a tender, standing alone, does not establish estoppel.

## Conclusion

Ring’s attempted redemption failed because the Advest check payable to Ring was not properly indorsed to the Town, and the separate letter could not substitute for an indorsement; with no valid payment made before March 7, 1997, the lien foreclosed automatically and the Town obtained fee simple title, and the Town was not estopped by its rejection letter from asserting the indorsement defect.


Town of Freeport v. Ring, 727 A.2d 901 (1999)