It was said by Jessel, M. B., that "there is no such. thing as gross profits." See 10 App. Cas. 446. Where a life insurance com pany issued "participating policies" for an increased premium, agreeing at the end of every five years to give two-thirds of the "gross profits" of such policies to the policy holders, it was held that this two-thirds con stituted "annual profits or gains" of the com pany and were assessable for income tax ; 10 App. Cas. 438, per Lords Blackburn and Fitzgerald; Lord Bramwell dissenting. The case seems to disregard the nature of the re turn of that portion of the premium charged in advance and subsequently ascertained to have been excessive, which the companies curiously enough call "dividends." See Div MENDS; NET PROFITS ; OPERATING EXPENSES.
There is no rule of law that profits of one year cannot be divided because there was a Ldebit balance in former years; [1901] 2 Ch. 184.
See Cotting v. R. Co., 54 Conn. 156, 5 Ati. 851, as to profits.
Commissions may be considered as prof its, for some purposes. A participation in commissions has been held such a partic ipation in profits as to constitute the par ticipants partners; 2 H. Bla. 235; 4 B. & 663. So, commissions received from the pales of a pirated map are profits which must be accounted for by the commission merchant on a bill by the proprietor of the ; Stevens v. Gladding, 2 Curt. C. C. 608, I Fed. Cas. No. 13,399. As between partners all gains which equitably belong to the 1.0 , but which are clandestinely re ceived by one partner, are accounted profits of the firm; id.; Story, Part. § 174.
Depreciation of buildings in which a busi ness Is carried on,.thouqh they were erected by 'expenditure of the capital luvested, is or necessarily considered in &drawing the profits; Eyster v. Centennial Board of Fin.a•ei, 94 U. S. 500, 24 L. Ed. 188 (fi" speci al ease ) .
In'eodaputing the profits to wl* h a party is on fines, debt: should be chaqed off and also a proper SIM' for depreciation of plant ; Conville v. Shook, 24 N. Y. Supp. 547.
direction or power given in a will to raise money out of the rents profits of an estate for the payment of lebts and legacies, or to raise a portion within a def inite period, within width it could not be raised out of the annual rente4pd profits, authorizes a sale; 2 Ch. Cas. 20n. 1 Vern. , 104; 1 Ves. Sen. 491. And judges' in later times, looking to the inconvenience of rais ing a large sum of money in this manner, have inclined much to treat a trust to apply the rents and profits in raising a portion, even at an indefinite period, as authorizing a sale or mortgage; 2 Jarm. Wills, 282; 1
Ves. 234; 1 Ves. Sen. 42. But, as a general rule, the question whether the money is to be raised by a sale or mortgage or out•of the annual rents and profits will depend upon the nature of the purpose for which the money is to be raised, and the general tenor of the will; 2 Jarm. Wills, 383; 3 Bro. P. C. 66; 3 Yo. & J. 360; 2 P. Wms. 63. The cir cumstances that have chiefly influenced the decisions are—the appointment of a time within which the charge cannot be raised by annual profits; the situation of the estate, where a sale or mortgage would be very prejudicial, as in the case of a reversion, especially if it would occasion any, danger that the charge would not be answered in its full extent; the nature of the charge, as where it is for debts or portions, and, in the latter instance, the age or death of the child ; 2 Ves. 480, n. 1; 2 P. Wms. 13, 650. But in no case where there are sub sequent restraining words has the word prof it been extended; Prec. Ch. 586, note, and the cases cited there; 1 Atk. 506; 2 id. 105.
A devise of the rents and profits of land is equivalent to a devise of the land itself, and will carry the legal as well as the bene ficial interest therein; 2 B. & Ald. 42; Reed v. Reed, 9 Mass. 372; Fox v. Phelps, 17 Wend. (N. Y.) 393; Earl v. Rowe, 35 Me. 414, 58 Am. Dec. 714 ; 1 Bro. C. C. 310. A direction by the testator that a certain per son shall receive for his support the net proAts of the land is a devise of the land it self, for such period of time as the profits were devised ; Earl v. Rowe, 35 Me. 419, 53 Am. Dec. 714.
An assignment of the profits of an estate amounts to an equitable lien, and would en title the assignee in equity to insist upon a mortgage. Thus, if a tenant for life of the real estate should, by covenant, agree to set apart and pay the whole or a portion of the annual profits of that estate to trustees for certain objects, it would create a lien in the nature of a trust on those profits against him and all persons claiming as vol unteers or with notice under him; 2 Cox, Ch. 253; 3 Bro. C. C. 531, 538.