In the case of City of Worcester v. Worcester Consolidated Street Railway Company, 1904, the Supreme Court ruled in favor of the railway company. The city had attempted to impose a local tax on the company's streetcars, arguing that they were personal property and thus subject to taxation under state law. However, the court found that these streetcars were actually part of a larger transportation system regulated by state law and therefore exempt from local taxation. This decision was based on an interpretation that such vehicles are not "tangible personal property" but rather integral parts of a public service corporation’s operating equipment which is already taxed as real estate at its full value including all tangible and intangible elements contributing to its earning power.

In the dissenting opinion for the case of City of Worcester v. Worcester Consolidated Street Railway Company, it was argued that the city had no right to impose conditions on a state-granted charter. The justice disagreed with the majority's view that municipalities have inherent power over their streets and can regulate them as they see fit, even if this interferes with a company’s state-granted rights. He contended that when a corporation is created by an act of legislature and given certain powers and privileges, these cannot be taken away or limited without its consent unless such authority has been reserved by statute or implied from its terms. In his view, any attempt to do so would violate contract law principles protected under U.S Constitution's Contract Clause (Article I Section 10). Therefore, he believed that in this case where there were no statutory reservations made at time of granting charter to railway company nor any explicit agreement between parties involved about possible future regulations imposed by city council; municipality did not possess legal authority to enforce ordinance requiring railway company to maintain pavement around its tracks.