In the 1902 case of Montgomery v. Portland, the United States Supreme Court ruled on a dispute involving property rights and taxation. The city of Portland had sold land owned by Montgomery for unpaid taxes, which was then bought by another party. However, it was later discovered that at the time of sale, there were no delinquent taxes on the property as previously believed. Therefore, Montgomery sued to regain his lost property arguing that since there were no overdue taxes when his land was sold off; hence this action constituted an illegal seizure of his assets. The court sided with him stating that if a tax is not due or has been paid already at the time when proceedings are initiated to sell someone's real estate for non-payment of such tax; those proceedings are void and do not transfer any title from owner to purchaser in such cases even though they may be regular in all other respects.

The dissenting opinion in the case of Montgomery v. Portland argued that the city of Portland had no right to impose a tax on the Southern Pacific Company's railroad property, as it was not within its jurisdiction. The justice contended that while cities have powers granted by state law to levy taxes for local improvements, these powers should not extend beyond their territorial limits. In this case, parts of the railway were outside city boundaries and thus exempt from taxation by Portland. Furthermore, he asserted that even if such power existed under Oregon law (which he disputed), it would be unconstitutional because it violated due process rights protected by Fourteenth Amendment - specifically arguing against taking private property for public use without just compensation or due process of law.