The Woodbridge v. United States case in 1923 revolved around the issue of estate taxation. The executors of the estate of Timothy Lester Woodbridge, deceased, sought to recover a sum paid as an additional tax under the Revenue Act of 1916 and assessed upon property transferred by him during his lifetime but intended to take effect after his death. They argued that this was not taxable because it wasn't part of his gross estate at death since he had given away these assets before he died. However, the Supreme Court ruled against them stating that such transfers were indeed subject to federal estate taxes even if they were made prior to death with intent for them only taking effect posthumously. This decision reinforced Congress's power over levying inheritance or transfer taxes on estates and clarified what constitutes 'transfer' within context of tax law.

In the dissenting opinion for Woodbridge et al., Executors of Woodbridge, v. United States, Justice Holmes argued that the majority's decision was inconsistent with previous rulings and interpretations of tax law. He contended that a life estate should not be considered part of an individual's gross estate if it is not subject to their disposal or control during their lifetime. In this case, he believed that since Mrs. Woodbridge did not have any power over her husband’s property until after his death, it should not be included in her taxable estate. Furthermore, he pointed out inconsistencies between this ruling and other cases where similar circumstances were treated differently under tax laws - specifically mentioning Hays v. Gauley Mountain Coal Co., which dealt with coal royalties payable only after death being excluded from taxation as they weren't deemed part of the decedent's gross income at time of death.