## Facts

- The United States claimed a federal tax lien against taxpayer Kenneth S. Ryan.
- The disputed real estate was registered land under Minnesota’s Torrens system.
- The United States filed a notice of tax lien in the register/registrar’s office “by name only,” without a specific land description and without having the lien memorialized on the Torrens certificate of title.
- Minnesota Federal Savings and Loan Association held a prior mortgage on the registered land.
- The mortgage was foreclosed in state court, and the state court ordered issuance of a new Torrens certificate of title.
- Ralph D. Peltz and Edward C. Engdahl later purchased the property and received a new Torrens certificate that did not show the federal tax lien.
- Ryan and the City of St. Paul did not appear; other defendants answered.
- The parties stipulated to the material facts and filed cross-motions for summary judgment, leaving only legal questions.

## Issues

1. Whether filing a federal tax lien notice “by name only” with the register/registrar, without memorializing the lien on the Torrens certificate or otherwise following Torrens procedures, creates or preserves an enforceable lien against Torrens-registered real property as to subsequent purchasers.
2. Whether the state foreclosure and issuance of a new Torrens certificate extinguished any unregistered federal tax claim as to later purchasers who took title under the new certificate.

## Decision

- The court granted summary judgment to the answering defendants and denied the United States’ motion.
- The court held that the United States’ notice filing was insufficient to create or preserve an enforceable lien against the Torrens-registered property as to Peltz and Engdahl.
- The court dismissed the lien-foreclosure action as to the moving defendants.

## Legal Principles

- Under the Torrens system, the certificate of title is the operative statement of interests affecting registered land; interests not memorialized on the certificate are generally ineffective against later purchasers who rely on the certificate.
- A federal tax lien must be perfected against third parties in a manner that provides the form of notice required for the relevant category of property; for Torrens-registered land, notice that does not result in registration or memorialization on the certificate is insufficient as to subsequent purchasers.
- After a foreclosure and judicially directed issuance of a new Torrens certificate, unregistered claims not carried forward onto the new certificate are cut off as to purchasers taking under that certificate.

## Conclusion

The court concluded that a federal tax lien notice filed only under the taxpayer’s name, without compliance with Minnesota Torrens registration requirements and without a memorial on the certificate of title, did not bind Torrens-registered land against subsequent purchasers who took title under a new, lien-free Torrens certificate issued after foreclosure.


United States v. Ryan, 124 F. Supp. 1 (D. Minn. 1954)