Daily Development for
Monday, November 24, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

Today's reporter is Jim Stillman of Murphy, Weir & Butler, Los Angeles

BANKRUPTCY; CHAPTER 13; PRE-PETITION DEFAULTS; INSTALLMENT LAND CONTRACT: Notwithstanding a pre-petition state court judgment for possession on the installment land contract vendor's "suit in ejectment," the debtor vendee may be allowed to cure the delinquencies and reinstate the contract in his chapter 13 plan.

In re Grove, 1997 Bankr. LEXIS 717, 30 BCD 1143 (Bankr. W.D.Pa. 1997).

Under Pennsylvania law, the installment land contract created a lien and is to be treated as a mortgage for purposes of foreclosure and execution, citing Anderson Contracting Co. v. Daugherty, 274 Pa. Super. 13. Also, the debtor remained in possession as of the petition date, and the court is of the view that the Third Circuit has held that the possessory interest, even of a tenant at sufferance, is sufficient to invoke the protections of the stay.

Reporter's Comment: While the reported opinions of the courts of the Commonwealth of Pennsylavania establish, correctly, that a long-term installment land contract is a lien-creating security instrument notwithstanding its archaic title language, the same opinions apparently indicate to other federal courts in Pennyslvania that the lender's assignment of rents, a far plainer security, is in fact a title-creating conveyance. See In re Jason Realty and its woeful progeny, commented on regularly in these pages.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Walter at the ABA. (312) 988 5260 or stacywalter@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.