In the City of Monterey v. Jacks case in 1906, the U.S Supreme Court ruled on a dispute involving property rights and taxation. The city of Monterey had sold certain lands for non-payment of taxes to John H. Jacks, who later discovered that these lands were not subject to taxation because they belonged to the federal government at the time when they were assessed for tax purposes. Therefore, he sought reimbursement from the city for his purchase price plus interest. The court held that although it was true that land owned by federal government is exempted from state or local taxes, this exemption does not extend to purchasers like Mr.Jacks if such land has been erroneously taxed and sold due to an oversight or mistake about its ownership status by local authorities . Thus,the sale made under such circumstances would still be valid and binding upon purchaser even though it turns out afterwards that taxing authority did not have jurisdiction over said property at time of assessment.The court therefore denied Mr.Jack's claim against City Of Monterey.

In the dissenting opinion for the City of Monterey v. Jacks case, it was argued that there was no legal basis to deny Mr. Jacks his property rights without compensation. The city's decision to change a street grade, which resulted in damage to Mr. Jacks' property, should be considered as an act of eminent domain and thus require just compensation under the Fifth Amendment's Takings Clause. It was also contended that while cities have certain powers over streets within their jurisdiction, these powers do not extend so far as to allow them to cause significant harm or destruction to private properties adjacent those streets without providing due recompense for such damages.