In the case of Shaw v. Gibson-Zahniser Oil Corporation, 1927, the U.S Supreme Court ruled on a dispute involving taxation and oil production rights in California. The Gibson-Zahniser Oil Corporation had leased land for oil drilling from Southern Pacific Railroad Company but refused to pay taxes levied by California's state auditor, arguing that they were not liable as they did not own the land or minerals beneath it - only leasing rights for extraction. The court disagreed with this argument and held that their leasehold interest was indeed taxable under California law because it constituted real property ownership due to its valuable nature and potential profitability. Therefore, even though Gibson-Zahniser didn't technically own the physical land or mineral deposits underneath it, their exclusive right to extract and profit from those resources meant they effectively owned them in a legal sense.

In the dissenting opinion for Shaw v. Gibson-Zahniser Oil Corporation, Justice Holmes argued that the majority's decision was inconsistent with previous rulings of the Court and failed to properly interpret California law. He contended that under California law, a tax deed conveys absolute title without any right of redemption unless such a right is expressly reserved in the deed itself or by statute. In this case, no such reservation existed and therefore he believed that Gibson-Zahniser Oil Corporation had lost all rights to their property when it was sold for taxes. Furthermore, he disagreed with the majority's view on due process grounds as well; arguing that adequate notice had been given before selling off these lands for unpaid taxes which satisfies requirements of fairness and justice.