In Arthur, Collector v. Morgan, the Supreme Court of the United States was asked to decide whether a federal tax on the transfer of shares of stock was constitutional. The case arose when the Collector of Internal Revenue attempted to collect a tax on the transfer of shares of stock from the defendant, Morgan, to the plaintiff, Arthur. Morgan argued that the tax was unconstitutional because it was a direct tax, and the Constitution prohibited direct taxes without apportionment among the states. The Supreme Court held that the tax was not a direct tax, but an excise tax, and therefore was constitutional. The Court reasoned that the tax was imposed on the transfer of the shares of stock, not on the shares themselves, and that the tax was imposed on the act of transferring the shares, not on the property itself. The Court also noted that the tax was imposed on the privilege of transferring the shares, not on the ownership of the shares. The Court concluded that the tax was an excise tax, and therefore was constitutional. The Court held that the tax was not a direct tax, and therefore did not need to be apportioned among the states. The Court's decision was unanimous.

Justice Field delivered the dissenting opinion in Arthur, Collector v. Morgan, arguing that the majority's decision was contrary to both precedent and common sense. He argued that it would be absurd for a person who had been lawfully arrested on suspicion of having committed an offense to have their property seized without any legal process or hearing whatsoever. Furthermore, he noted that there were numerous cases where courts had held such seizures as unconstitutional under similar circumstances and thus this case should not be treated differently than those prior decisions. In conclusion, Justice Field stated his belief that the majority's ruling was wrong and should be overturned by Congress if necessary in order to protect citizens from unlawful seizure of their property without due process of law.