In United States vs. Knight's Administrator, the Supreme Court ruled that a federal tax on distilled spirits was constitutional and could be collected from estates of deceased persons who had owned such spirits prior to their death. The case arose when an administrator of a deceased person's estate refused to pay the taxes due on the spirits in question, arguing that it violated both state law and his right as executor under common law. The Supreme Court rejected this argument, finding instead that Congress had authority under its power to levy taxes for revenue purposes and thus could impose such a tax without violating any other laws or rights. Furthermore, they held that since no one else would have been liable for these taxes if not paid by the estate itself, it was reasonable for Congress to require payment from them in order to fulfill its duty of raising revenue.

In United States v. Knight's Administrator, the Supreme Court was asked to decide whether a federal court had jurisdiction over a case involving an estate dispute between two citizens of different states. The majority opinion held that it did not have such jurisdiction and dismissed the case. However, Justice Grier dissented from this decision and argued that Congress had granted federal courts exclusive original cognizance in all cases where there is diversity of citizenship among parties involved in civil suits for which no other remedy is provided by law or equity. He further noted that since state laws could not provide any relief to either party due to their conflicting interests, only a federal court could resolve the dispute at hand without infringing on state sovereignty rights. Therefore, he concluded that Congress intended for these types of disputes to be heard by federal courts and thus they should have been allowed jurisdiction over this particular case as well.