In the case of New York Rapid Transit Corp. v. City of New York, 1937, the Supreme Court ruled in favor of the city. The dispute arose when New York City decided to construct a new subway system and issued bonds for its financing without obtaining consent from existing transit companies who claimed that this violated their exclusive rights granted by previous contracts with the city. The court held that these contracts did not grant an absolute monopoly over local transportation services but merely provided certain privileges under specified conditions which could be altered or repealed by state legislature if it was deemed necessary for public welfare. Therefore, it concluded that there was no contractual impairment as alleged by plaintiff corporations because they had no vested right against competition from municipally owned utilities.

The dissenting opinion in the case of New York Rapid Transit Corp. v. City of New York argued that the majority's decision to uphold a law requiring subway operators to provide five-cent fares was an unconstitutional violation of contract rights. The dissenters believed that this ruling interfered with the contractual agreement between the transit corporation and city, which had initially allowed for fare increases under certain conditions. They contended that by preventing such adjustments, despite significant changes in economic circumstances since the original contract was signed, amounted to impairing obligations within contracts - something explicitly prohibited by Article I, Section 10 of U.S Constitution. Furthermore, they expressed concerns about potential implications on private corporations' willingness to enter into long-term contracts with municipalities if such agreements could be unilaterally altered or disregarded based on changing political climates or public sentiment.