In the case of Peabody, Collector v. Stark, the Supreme Court was asked to decide whether a federal tax on distilled spirits was constitutional. The case arose when the Collector of Internal Revenue for the District of Massachusetts, Peabody, attempted to collect a tax on distilled spirits from Stark, a distiller. Stark 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 indirect tax, and therefore did not require apportionment. The Court reasoned that the tax was imposed on the distiller, not on the distilled spirits themselves, and that the tax was not a burden on the property itself, but on the act of distilling. The Court also noted that the tax was imposed on the distiller, not on the consumer, and that the tax was not a burden on the property itself, but on the act of distilling. The Court concluded that the tax was an indirect tax, and therefore did not require apportionment. The Court also held that the tax was constitutional, as it was imposed on the distiller, not on the distilled spirits themselves. This decision established the principle that indirect taxes do not require apportionment among the states.

In the case of Peabody, Collector v. Stark (1872), Justice Field delivered a dissenting opinion in which he argued that the majority's decision was contrary to both precedent and sound reasoning. He asserted that it was wrong for Congress to impose an income tax on individuals without apportionment among states according to population, as required by Article I Section 9 of the Constitution. Furthermore, he argued that even if such taxation were permissible under certain circumstances, this particular instance did not meet those criteria because there had been no showing of any extraordinary emergency or necessity requiring such taxation. In conclusion, Justice Field maintained that since Congress had failed to comply with constitutional requirements when imposing this tax on individuals' incomes from personal property investments and occupations within their respective states, it should be declared unconstitutional and void.