2 I. Defendants’ contentions are based upon the allegation that at the time of the transactions under consideration plaintiff was a director in the defendant company, and actively participating in the management of its affairs. Plaintiff admits that he was chosen a director in 1891, but, contends that, not being a stockholder, he was not qualified to act, and that he was merely nominally a director, ■and did not participate in the affairs of the company. We are in no doubt but that, whether qualified or not, plaintiff did act as a director from his election, in 1891, until July 19, 1893, at which date he presided at a meeting of the directors called to elect a president to fill the vacancy caused by the death of Mr. Leonard; also that he was treated by the officers of the company as a director, and gave advice concerning the affairs of the company at Sioux City. We think that, for the purposes of this case, plaintiff should be considered as coming within the rule applicable to dealings between a director in his own interests and his corporation. While many authorities are cited, there is no dispute between counsel as to the rule in this state. They cite Buell v. Buckingham, 16 Iowa, 284, wherein it is said: “A purchase of property by a trustee of his cestui que trust is not void in equity, but is voidable. Such sale will set aside for fraud, or upon a very slight showing of advantage or bad faith; but, when it is clear that the cestui que trust intended that the trustee should buy, and there is no fraud, no concealment, and no advantage taken by the trustee of *398information acquired by him as such, it will be upheld and enforced.” The inquiry is whether, in the sale of the lots or in the agreement as to rents, the plaintiff acted fraudulently or in bad faith. The complaint is that he falsely represented the value of the lots and the rental that could be readily realized therefrom. Now, while these were mere expressions of opinions, yet, where special confidence is reposed and the utmost fairness required, such opinions may show fraud or bad faith. That the values represented by plaintiff were excessive is clearly shown, and that they were known to him to be such. It does not appear, however, that the directors ■made the contracts solely upon the representations of the plaintiff. Plaintiff’s offer to sell was under consideration for some time, thus affording opportunity for inquiry, and during that time one or miore of the directors visited Sioux Oity. Mr. Leonard was well informed as to the values of real estate in Sioux City, and as to the character and value of this property, and was present at the meeting that accepted the plaintiff’s offer. Plaintiff was not present, and did nothing to induce the purchase, except to state his opinion as to said values, and that it would 'be advantageous to the company to buy and lease as proposed. We are satisfied that the judgment of Mr. Leonard did more to influence the acceptance than the representations of the plaintiff. Plaintiff did not acquire his information as to these values by reason of his position as director, and, so far as appears, the corporation dealt with him in this matter as with a stranger.
3 II. Let it be said, however, that, because of his relation' as director, he did not act in good faith in representing the values in excess of what he believed them to he, the inquiry remains whether defendants should now be heard to complain. The contract of purchase was made December 17, 1891, the new lease May 26, 1892, and the cancellation of the lease September 1, 1892. The defendants improved the *399property, and had full possession from- September 1, 1892, and yet made ho complaint as to the fairness of these transactions until shortly before the commencement of this action, April 11,1895, when informed that an action would be commenced! if payment was nut made. For nearly three years the defendant company contihued to hold this property, and to pay incumbrances thereon, as per the contract of purchase, without a complaint. In 8 Thompson, Corporations, section 4047, it is said: “If the corporation or the stockholders wish to disaffirm the transaction, this must be done within a reasonable time, accompanied, ordinarily, by an offer to put the trustee in status quo. The meaning is that laches — that is to say, an unreasonable delay after knowledge — will be tantamount to a . ratification.” Surely, a much less time was sufficient for defendants to have found the matters now complained of, and to have offered', as is now offered, to rescind the contract. The offer comes too late, hot only because not made in a reasonable time, but because it is now impracticable, if not impossible, to place the parties in status quo. As we view it, the defendants are not only not entitled to a rescission of the contract, but, under the facts, should be held to have ratified said contracts after ample opportunity to know the facts. Our conclusion is that the decree is correct, and it is therefore affirmed.
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