Source: https://en.m.wikisource.org/wiki/Clearwater_v._Meredith
Timestamp: 2019-04-19 23:17:18+00:00

Document:
With these statutes in force, Clearwater, on the 12th July, 1853, sold a tract of land to Meredith and others for $10,000, taking 200 shares of the already mentioned Short Line Railway Company's stock in payment; Meredith and they, however, by written contract, guaranteeing to Clearwater, that the stock should be worth par, that is to say, $50 a share, in Cincinnati, on the 1st October, 1855.
The 1st October, 1855, having arrived and passed, and Clearwater, considering that the stock was not worth par at Cincinnati, brought assumpsit in the Circuit Court for the Indiana District, against Meredith and his co-guarantors, on the contract. The declaration set forth the sale, acceptance of the stock, and guaranty; that Clearwater still held possession of the stock; and it assigned for breach, that the stock was not worth par at the time and place stipulated, but on the contrary, was of no value at all.
To this declaration there were six pleas. Issues, in fact, were joined on the first and fourth, and demurrers sustained to the second, third, and sixth.
The fifth plea set forth substantially, that after the execution of the guaranty, and before the 1st of October, 1855, to wit, &c., the stock of the said Short Line Railway was merged and consolidated with the stock of a second railway company named;  making one joint stock company of the two, under a new corporate name, which was given;  that the said corporations were organized and formed under the already mentioned act of May 11, 1852, to provide for the incorporation of railroad companies; that the roads were connecting and intersecting roads; that the consolidation was made with the consent of the stockholders and directors of both companies; that afterwards, in August, 1854, the said newly formed joint company was merged and consolidated with a third railway corporation of the State of Indiana, whose name was also given;  which company was constructing a road that intersected with the said already mentioned newly formed joint company; that by the said consolidation, the stock of the said two companies was merged and consolidated, 'forming one joint stock company out of said two companies;' that the said consolidation was made with the consent of the directors and stockholders of said two companies, and with the consent of said plaintiff; that the said consolidated company assumed a third corporate name, which was stated;  and that, by reason of the said consolidation, the stock of the Short Line Railway Company in said agreement specified, was destroyed, and rendered wholly worthless and of no value. A demurrer was interposed to this plea, which was overruled.
This replication was also demurred to, and the demurrer sustained. The plaintiff now saying nothing further, and choosing to abide by his last-named amended replication, judgment was rendered for the defendant.
The question presented on error here was this: Did the court below commit error when it sustained a demurrer to the last replication, and gave judgment against the plaintiff, Clearwater, as it did?
Mr. Pugh for Clearwater, the plaintiff in error: The demurrer asserts, of course, that the replication is bad, and the reasons which will be assigned to show that it is so are, that it is double, and also that it traverses matter of law.
2. Does the replication traverse matter of law? These parties did not bargain with each other upon a question of names, but upon a matter of values. Assuming the consolidated company to be a corporation-a matter which we speak of hereafter-it was the successor, in law, of the Short Line Railway, and bound by the contracts of that company as if no consolidation had occurred.  So complete would be the identity, in such a case, that an action of covenant might be maintained against the new company, by name, upon a deed sealed with the corporate seal of any one of its constituent bodies.  The mere fact of consolidation, therefore, with or without the plaintiff's consent, is not material to the performance of this agreement on the part of the defendants. It may be that the Short Line Railway Company acquired, by means of it, additional property, or facilities of some other description for enhancing the value of its stock. So, on the other hand, the consolidation may have involved its affairs in ruin. This, however, is a question of fact, to be tried by a jury, and upon evidence. The plaintiff took issue in regard to it; but he was not allowed any trial of that issue. And so it stands upon record, as the judgment of the Circuit Court in this case, that (although the stock of the Short Line Railway was not destroyed, 'either in whole or in part,' by means of consolidation, as alleged in the plea) the defendants are excused, nevertheless, from performing their contract.
^1 Revised Statutes of Indiana, ed. 1860, p. 504.
^2 Act of 23d February, 1853; ib. 526.
^3 The Cincinnati, New Castle & Michigan Railroad Co.
^4 The Cincinnati & Chicago Railroad Co.
^5 The Cincinnati, Logansport & Chicago Railway Co.
^6 The Cincinnati & Chicago Railroad Co.
^7 Stephen on Pleading, 298 (5th Lond. ed. 1843).
^8 Robinson v. Rayley, 1 Burrow, 316.
^9 3 Barnewall & Adolphus 2; affirmed in the Exchequer Chamber, 3 Tyrwhitt, 430.
^10 O'Brien v. Saxon, 2 Barnewall & Creswell, 908; Isaac v. Farrar, 1 Meeson & Welsby, 69.
^11 Lancashire Railway Co. v. East Lancashire Railway Co., 5 Clark, 792.
^12 Philadelphia Railroad Co. v. Howard, 13 Howard, 333.
^13 See ante, Statement, p. 26.
^14 Warner v. Beers, 23 Wendell, 103; Simpson v. Denison, 16 Jurist, 828.
^15 McCray v. Junction Railroad Co., 9 Indiana, 358; Carlisle v. Terre Haute Railroad Co., 6 Id. 316.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.