¶1An agent, with power to sell and receive money in payment for his principal, has not the apparent authority to accept a cancellation of his own debt due to a vendee who knows, or by the exercise of reasonable diligence could know, that his debtor is acting as agent; because he knows that the benefit of the sale will inure to the agent only — a result inconsistent with the agency. Arnett v. Glenn, 52 Ark., 253; Story on Agency, sec. 77; Belton Company v. Belton Manufacturing Co., 64 Tex., 337; Williams v. Johnston, 92 N. C., 532.
¶2The court found only that James did not know the terms of the agency, and declared upon that, that his title was superior to the principal’s. That was error. It was only necessary that James should know that the person with whom he dealt was an agent, in order to be apprised that the transaction was beyond the scope of his authority.
¶3Reverse and remand.