When residents of Lincoln switched their business to Tunstall’s store, Murphy-Dolan began a slide into bankruptcy. They first tried to put Tunstall out of business by harassing him legally, then trying to goad him into a gunfight and they even hired gunmen. In defense, Tungstall gathered supporters of his own.
In February, 1878, Dolan and Murphy obtained a court order to seize some of Tunstall's horses as payment for an outstanding debt. When Tunstall refused to surrender the horses, Lincoln County Sheriff, William Brady, formed a posse led by Deputy William Morton to seize them. Only the three deputies survived the confrontation. After protesting the presence of the posse on his land, Tunstall was shot in the head on February 18, 1878. This incident started what became known as the Lincoln County War.