Latham v. First National Bank

Wood, J., (after stating the facts). There is no evidence in the record to support the finding of the chancellor that when W. F. Latham sold the lot in Fort Smith to his wife “he retained the lease on said building and the right to collect the rents therefrom.” The deed contains no such reservation. On the contrary, Mrs. Latham, by the express terms of the grant, acquired the land mentioned and “all the privileges thereunto appertaining.” That the fee simple title to the land carries with it the right to its absolute dominion is axiomatic; and where the property 'is rented at the time it is conveyed, unless the deed reserves the right in the grantor to 'collect, and use the rents, these pass, as a necessary incident, with the land, to the grantee. “Rent which does not become due till after a conveyance by the landlord goes to the grantee entire.” Jones, Landlord and Tenant, § 658; Gibbons v. Dillingham, 10 Ark. 9. Mrs. Latham testifies that “the rental was collected monthly by Mr. Latham; it was used for living purposes for our family.” There is no evidence that she knew that Latham had assigned the lease contract to the appellee for any purpose. The evidence shows that Latham had authority as her agent to collect the rents and to use same for household purposes. But it does not show that he had authority to use the rents for some other purpose. His declarations were not competent to show that he had authority to use them for some other purpose. The fact that Lathani assigned the lease contract as collateral to the appellee for the note in suit does not warrant the conclusion that Mrs. Latham knew of such assignment and consented thereto. Mrs. Latham testified that she did not know of such assignment. There is no evidence, direct or circumstantial, that she did know of it. Latham had no authority over the rents except as the agent of appellee. An inspection of the records of Sebastian County would have discovered that fact. The authority of an agent cannot be established by his own declarations. Carter v. Burnham, 31 Ark. 212; Holland v. Rogers, 33 Ark. 251; Chrisman v. Cannon, 33 Ark. 316; Howcott v. Kilbourn, 44 Ark. 213. A principal is not bound by the acts and declarations of an agent beyond the scope of his authority. A person dealing with an agent is bound to ascertain the nature and extent of hi.s authority. No one has the right to' trust to the mere presumption of authority, nor to the mere assumption of authority by the agent. City Elec. St. Ry. Co. v. First Nat. Exch. Bank, 62 Ark. 33, 40. These well settled principles must determine this controversy in favor of appellant. The- declarations of Latham, the agent of appellant, that he owned the lease contract, and that appellee could have same as security, were wholly incompetent as against appellee to establish the. authority of Latham to use the rents belonging to Mrs. Latham, for the purposes stated, or to show that he owned the lease. Likewise was his declaration in the letter to appellee that Mrs. Latham had loaned him this money to help him along. The fact that W. F. Latham gave drafts for the rent to the Commercial Bank to pay or to secure the payment of his account with that bank does not prove that he was using the rent money for other than household purposes. Latham’s account with the Commercial Bank may have been for money that was used by him to pay his household expenses, and, if so, the drafts to pay that account were for the purpose designated by Mrs. Latham in the payment of household expenses. But, even if these drafts were given to pay Latham’s account for money used by him for some other purpose, there is no evidence that Mrs. Latham knew that the drafts were being so -used. It has been often held that where a married woman permits her husband to use her separate estate as his own, and to obtain credit on the faith that the estate so used is his own, she will not be allowed afterwards to assent her claim to the property as against her husband’s creditors. Buck v. Lee, 36 Ark. 525; Driggs v. Norwood, 50 Ark. 42; Davis v. Yonge, 74 Ark. 161; Roberts v. Bodman-Pettit Lumber Co., 84 Ark. 227; Mitchell v. State, 86 Ark. 486. But the case at bar is differentiated sharply from the above cases by the facts. Here there is no direct evidence that Mrs. Latham assented to the use of her rents for the payment- of her husband’s debts, nor are there any circumstances from which such assent should be implied. The competent evidence is to the contrary. When a cause in diancery reaches this court, it must be decided on the competent evidence. Niagara Fire Ins. Co. v. Boon, 76 Ark. 156. The decree is reversed with direction to enter a decree for Mrs. Latham for the amount of the rents, and to dismiss appellees’ complaint for want of equity.