In the case of City of Des Moines v. Des Moines City Railway Company in 1908, the U.S Supreme Court ruled in favor of the railway company. The city had attempted to force the railway company to pave and maintain a portion of its tracks that ran through public streets, as per an ordinance passed by the city council. However, this was contrary to their original franchise agreement which stated that such maintenance would be handled by both parties equally. The court held that unilateral changes could not be made without mutual consent from both parties involved in a contract or agreement; thus, it was illegal for Des Moines to enforce such an ordinance on its own accord against another party with whom they had previously agreed upon different terms.

The dissenting opinion in the case of City of Des Moines v. Des Moines City Railway Company argued that the city had no right to unilaterally alter a contract with the railway company without its consent. The justice believed that when the city granted a franchise to operate streetcars, it entered into an agreement which could not be changed without mutual agreement from both parties involved. Therefore, imposing new regulations or requirements on the company was seen as violating this contractual relationship and infringing upon property rights protected under law. Furthermore, they contended that any changes should have been made through negotiation rather than legislation by local government officials who may not fully understand or appreciate their implications for business operations and profitability.