In United States v. Granite Company, the Supreme Court of the United States was asked to decide whether the United States had the right to impose a tax on the Granite Company for the sale of its products. The Granite Company argued that the tax was unconstitutional because it was a direct tax on the sale of its products, and the Constitution prohibited direct taxes. The Supreme Court held that the tax was not a direct tax, but rather an excise tax, and therefore was constitutional. The Court reasoned that the tax was imposed on the Granite Company's privilege of selling its products, and not on the products themselves. Therefore, the tax was an excise tax, and not a direct tax, and was constitutional. The Court also held that the tax was not a violation of the Granite Company's right to due process, as the tax was imposed in accordance with the law. The Court concluded that the tax was constitutional, and the Granite Company was liable for the tax.

In United States v. Granite Company, the Supreme Court was asked to decide whether a company could be held liable for unpaid taxes due from its predecessor in business. The majority of the court found that the company could not be held liable and dismissed the case. Justice Field dissented, arguing that under existing law, it was clear that when one corporation succeeded another in business, it assumed all liabilities of its predecessor as well as any rights or privileges associated with such succession. He argued further that this principle applied even if there had been no express agreement between them regarding liability for debts and obligations incurred by either party prior to their merger or consolidation. Thus, he concluded that since Granite Company had taken over all assets and liabilities of its predecessor upon merging with it, they should also assume responsibility for any unpaid taxes owed by their predecessors regardless of whether an explicit agreement existed between them on this matter or not.