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Anderson Contracting Co. v. Daugherty (1979)

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Anderson Contracting Co. v. Daugherty, 274 Pa. Super. 13, 417 A.2d 1227 (Pa. Super. Ct. 1979)

Legal information, not legal advice. Verify against the cited opinion.

  • Citation: Anderson Contracting Co. v. Daugherty, 274 Pa. Super. 13, 417 A.2d 1227 (1979), appeal dismissed, 492 Pa. 630, 425 A.2d 329 (1980) (per curiam, “Appeal dismissed as having been improvidently granted”).
  • Court / Year: Superior Court of Pennsylvania; argued October 24, 1978, filed December 28, 1979. Appeal to the Supreme Court of Pennsylvania argued September 25, 1980 and dismissed November 3, 1980 — so the Superior Court decision stands as the controlling Pennsylvania authority.
  • Topic tags: forfeiture · foreclosure · treat-as-mortgage · equitable_interest · cure-rights · installment-land-contract
  • Facts: Anderson Contracting Company sold residential real estate to David Daugherty and Pearl Currie (the vendees) under an installment land contract under which the vendees took possession and assumed the incidents of ownership while the vendor retained legal title as security for the unpaid purchase price. The contract included a warrant of attorney / power to confess judgment (a confession-of-judgment clause). When the vendees fell behind on installment payments, Anderson brought an ejectment action to reclaim possession rather than foreclosing. The vendees asserted the cure rights of the Loan Interest and Protection Law (Act 6 of 1974), 41 P.S. § 404, which let a defaulting residential-mortgage borrower cure up to one hour before a judicial sale. The trial court denied them that protection — reasoning the land contract was not a recorded “residential mortgage” — and the vendees appealed.
  • Holding: An installment land contract on residential property is to be treated as a “residential mortgage” for purposes of the cure provisions of Act 6, 41 P.S. § 404. The Superior Court held that “the rights and remedies provided by Act No. 6 … should not be denied to a class of Pennsylvania home purchasers solely because their obligation to pay the balance of the purchase price is evidenced and secured by a land installment contract” rather than a conventional mortgage. Substance prevails over form: a vendor’s retention of legal title functions as the reservation of a lien/mortgage, so the vendor-vendee relationship is the functional equivalent of mortgagee-mortgagor. The defaulting possessory vendee therefore gets the Act 6 statutory cure right, and the vendor cannot simply eject — the confession-of-judgment clause did not override this protection.
  • Reasoning: The court rejected the lower court’s requirement that the instrument be a recorded mortgage, focusing instead on whether the transaction could create a lien to secure the purchase price. Borrowing the equitable analysis associated with the Indiana installment-contract line (the Skendzel-style view that a conditional land-sale contract is a security device), the court reasoned that “the retention of the title by the vendor is the same as reserving a lien or mortgage.” Because Act 6 is remedial consumer-protection legislation defining a “residential mortgage” by economic substance (an obligation within the statutory base figure secured by real property with two or fewer residential units, 41 P.S. § 101), a home buyer who is paying for a residence on installments falls squarely within the class the legislature meant to protect. Denying the cure right on the formal ground that title had not yet passed would elevate form over the statute’s protective purpose.
  • Subsequent history / disposition: Anderson appealed to the Supreme Court of Pennsylvania, which dismissed the appeal as having been improvidently granted, 492 Pa. 630, 425 A.2d 329 (1980). The dismissal left the Superior Court’s holding undisturbed as binding Pennsylvania precedent.
  • Practical impact for CFD operators/buyers: Anderson is the foundational Pennsylvania authority making the state a treat-as-mortgage jurisdiction for residential installment land contracts. For operators, it means forfeiture / ejectment is the wrong remedy against a defaulting buyer who has taken possession: the buyer carries the Act 6 § 404 cure right (cure up to one hour before a judicial sale), and an aggressive confession-of-judgment clause does not defeat it — Anderson involved exactly such a clause. The realistic path to recover the property is mortgage-style foreclosure with a judicial sale, not summary ejectment. For buyers, it confirms that a Pennsylvania land contract on a home is protected like a mortgage: you keep your equitable title on default and get the statutory chance to cure before any sale.
  • Good-law status: Good law. The Superior Court decision stands (the Supreme Court dismissed the appeal as improvidently granted rather than reversing), and the treat-as-mortgage principle has been reaffirmed and extended by the recent Zanicky v. Skopow, 339 A.3d 998 (Pa. Super. 2025), holding that a Pennsylvania installment land contract is “a mortgage for all substantive and procedural purposes” and that the vendee’s equity can be extinguished only by foreclosure, not by ejectment. Not overruled or superseded by statute.
  • Source (retrieved):

▸ For Sellers / Operators — In Pennsylvania, Anderson converts a residential installment land contract into the functional equivalent of a mortgage the moment your buyer takes possession. You cannot eject a defaulting possessory buyer — they hold the Act 6 § 404 cure right and can cure up to one hour before a judicial sale, and a confession-of-judgment / warrant-of-attorney clause will not save you (the Anderson contract had one and the court applied the cure protection anyway). Budget for mortgage foreclosure with a sheriff’s sale, not a summary ejectment. See forfeiture-vs-foreclosure and the pennsylvania page.

▸ For Buyers — If you are buying a Pennsylvania home on a land contract and have taken possession, Anderson protects you like a mortgage borrower: your equitable title survives a default, and you get the statutory right to cure your arrears before any judicial sale.

Jurisdictions that follow / cite: pennsylvania (controlling) · part of the national drift away from strict forfeiture alongside skendzel-v-marshall-1973 (Indiana) and sebastian-v-floyd-1979 (Kentucky); reaffirmed and extended in zanicky-v-skopow-2025. Compare each state’s classification in forfeiture-vs-foreclosure.

Disclaimer. Legal information, not legal advice. Anderson turns on the buyer’s possession and Pennsylvania’s Act 6 consumer-protection statute; outcomes vary with the facts and the jurisdiction. Confirm the opinion is still good law and consult a licensed Pennsylvania attorney before relying on it.

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