Richard L. Chartrand v. Barnery's Club, Inc., a Nevada Corporation

This is a diversity action arising out of a counterclaim by Richard L. Chart-rand to compel Barney’s Club, Inc., a Nevada corporation, to issue to Chart-rand fifteen shares of its capital stock or, in the alternative, to pay damages in the sum of $25,000. After a trial without a jury, judgment was entered for defendant corporation. Chartrand appeals.

We first summarize the district court’s findings of fact. In the summer of 1960, Chartrand and Barney E. O’Malia (O’Malia), entered into an agreement in contemplation of incorporating Barney’s Club, Inc. In this contract, Chartrand and O’Malia each agreed to contribute $80,000 as an investment in a proposed operation of a casino at Stateline, Nevada, to be known as Barney’s Club. In consideration of this contribution, each was to receive an equal interest in fifty-one percent or more of the corporation. Therefore, under the terms of the pre-incorporation agreement, Chartrand was to have a 25% percent or more interest in the business.

Both O’Malia and Chartrand contributed their respective $80,000, either in cash, services, or by making expenditures on behalf of the corporation. All of Chartrand’s contribution was made in cash, but…