proceedings commenced by the plaintiff or his testator. The law did not require notice of the scire facias sued out, to revive the judgment of 1860, to be given to the trustees of the mort gage, and if the lien of that judgment had expired, the revived judgment fastened a new lien upon the property. That lien was a security for the debt which, by the Resolution of 1843, was made paramount to the mortgage, and against which, while it remains unpaid, the mortgage cannot be set up.

creates no lien upon personalty. But the Resolution recognizes the right of a contractor to follow both into the hands of a claimant or owner holding under such an assignment, transfer or mortgage, without regard to the question whether the property is real or personal. It, therefore, recognizes the existence of a lien in favor of those protected by it, independent of the lien of any judgment they may recover. This must be so, for if it is essential to a right to proceed by scire facias against the property This, however, relates to the ordinary judg in the hands of a grantee of the indebted comment lien, but it is not essential to the plaint-pany that the judgment of the creditor shall be iff's case, as exhibited by the evidence he of a lien upon that property, what is to be said of fered, that the judgment which he now seeks the case where the indebted company has conto enforce is a lien upon the property claimed veyed before the recovery of any judgment? and held by the trustees of the mortgage and In such a case the judgment can be no lien. by the Wheeling, Pittsburgh and Baltimore Yet it will not be claimed the property could Railroad Company. It would be were it not not be followed by scire facias against the for the Legislative Resolution of 1843, and for grantee. And if it could it must be, not bethe enactment of April 4, 1862, Pamph. L., cause of the lien of the judgment, but because 1862, p. 235. But the first of these, as we have of the lien of the debt, a lien which, as there is seen, made the debt due to the contractor, itself no statutory limitation to it, remains so long as a lien without a judgment, and prescribed no the debt remains unsatisfied. limits to its duration. The second (the Act of April 4. 1862, sec. 1) manifestly recognized the existence of such a lien, and pointed out a mode for making it available to the creditor. We quote the Act entire:

"Section 1. Whereas, it frequently happens that incorporated companies, by assignment, conveyance, mortgage or other transfer, devest themselves of their real and personal estate, in contravention of the provisions of the Resolution of January 21, 1843; therefore, Be it enacted, That, whenever any incorporated company, subject to the provisions of the above Resolution, shall devest themselves of their real or personal estate, contrary to the provisions of said resolution, it shall and may be lawful for any con. tractor, laborer or workman employed in the construction or repair of said company, having obtained judgment against the said company, to issue a scire facias upon said judgment, with notice to any person, or to any incorporated company, claiming to hold or own said real or personal estate, to be served in the same man ner as a summons, upon the defendant, if it can be found in the county, and upon the person or persons, or incorporated company, claiming to hold or own such real estate; and if the defendant cannot be found, then upon the return of one nihil and service as aforesaid, on the person or persons, or company claiming to hold or own as aforesaid, the case to proceed as in other cases of scire facias on judgment against terre-tenants."

This Act makes special provision for such cases as the present. Under it, all that is neces sary to enable a contractor, laborer or work man to proceed by scire facias against a person or company claiming to hold or own the real or personal estate of the debtor to such contractor, laborer or workman, by virtue of a mortgage made in contravention of the Resolution of 1843, is that he has obtained a judgment against the indebted company which gave the mortgage. It is not required that his judgment shall be a lien on the property. And plainly it was not intended that such a lien must exist. The Resolution of 1843 prohibited transfers, assignments and mortgages of personalty as well as of realty, and a judgment

Such being. in our opinion, the true meaning of the Joint Resolution of 1843, and of the Act of the Legislature of 1862, the evidence offered by the plaintiff and rejected by the court should have been received. It tended to prove inter alia, that the plaintiff's claim was within the protection of the Joint Resolution; that the mortgage under which the defendants hold was invalid as against him; that his case was embraced in the remedial Act of 1862, and that the defendants had bought under a decree of foreclosure of the mortgage, which expressly directed that the property should, notwithstanding the sale, remain subject to the claim of the plaintiff.

It has been contended, however, in support of the ruling of the court below, that the sale which was made of the property in March, 1871, under a decree of the Supreme Court of Pennsylvania in the suit to foreclose the mortgage, devested the plaintiff's lien, and that thereafter his only remedy was a resort to the proceeds of that sale. This might be so if the only lien he had was that of his judgment. But, as we have endeavored to show, he had lien independent of his judgment and prior to the mortgage. The decree of the Supreme Court ordered the property to be sold subject to that. The plaintiff petitioned to be allowed to intervene "pro interesse suo" in the suit for foreclosure, or, if that was not allowed, that he might be paid out of the proceeds of sale; but his petition was refused, and the court ordered that the purchaser at the sale should hold the whole of the estate and property, real, personal and mixed, of the Hempfield Railroad Company, "subject to any lawful claims or rights which may exist prior or paramount to said mortgage." The plaintiff's lien, therefore, was undisturbed by the sale and, hence, he had no right to look to the proceeds of the sale for payment. This disposes of the case.

It is hardly necessary to add that the Act of the Legislature of April 12, 1851, empowering the Hempfield Railroad Company to borrow money and pledge its property and income to secure the payment thereof, cannot be regarded as exempting that Company from the operation of the Resolution of 1843.

The judgment of the Circuit Court is reversed, | holders of the Corporation in compensation for and a venire de novo is awarded.

Cited 85 Pa. St., 35, 191.

L. H. CARY, COLLECTOR OF INTERNAL
REVENUE, Piff. in Err.,

v.

the guarantee which their guarantee capital affords to the depositors, but out of said portion enough shall be set aside from time to time to form a reserve fund which, although belonging to the stockholders, shall not be withdrawn or paid to them until the dissolution of the Corporation; but it may be converted into guarantee capital and the formation of a new reserve fund provided for.

*

*

*

June 30, 1870, the Board of Directors of

THE SAN FRANCISCO SAVINGS UNION. the defendant in error met and ascertained

(See S. C., 22 Wall., 38-41.)

Dividend taxable.

the net earnings for the preceding six months, and after deducting one tenth for the stockholders, declared a dividend of twelve per cent. per annum on the capital stock, reserve Where the depositors in a savings bank contract- fund and term, deposits, and ten per cent. per ed not for a rate of interest upon their deposits, annum on ordinary deposits. These dividends but for a share of the profits of the business in which their money was to be employed, although were paid without deducting the five per cent. the profits of the company were derived from in- or any tax. June 10, 1871, the Assessor of Interest, yet the portion divided to each was a divi-ternal Revenue assessed this Corporation five dend and liable to a tax, under the Act of 1864, as amended in 1866.

[No. 171.]

per cent. upon the sum of $149,649, which assessment was listed and certified to the plaintiff

Argued Feb. 3, 1875. Decided Feb. 22, 1875. in error as Collector on Internal Revenue. De

Ν

IN ERROR to the Circuit Court of the United
States for the District of California.
This was an action brought by the defendant
in error, in the District Court of the State of
California, for the City and County of San
Francisco, to recover back certain sums which
had been collected by the defendant, Cary, as
Internal Revenue Collector, under section 120
of the Act of June 30, 1864, 13 Stat. at L., 283,
as amended July 13, 1866, 14 Stat. at L., 138.
The case was removed to the court below, where
judgment was rendered in favor of the plaint-
iff.

mand was made and refused; whereupon the

Collector seized certain property of the Corporation and threatened to sell same; whereupon the tax was paid. In due time after the assessment aforesaid, the Corporation appealed to the Commissioner of Internal Revenue, who decided that the tax was legally assessed, and this suit was brought within six months thereafter.

Mr. C. H. Hill, Asst. Atty-Gen., for plaintiff in error. Messrs. H. J. Tilden and C. E. Whitehead, for defendant in error.

Mr. Chief Justice Waite delivered the opin

There is only one question presented in this case which needs our attention, and that is, whether the payments to depositors upon which part of the taxes in controversy were assessed and collected, were made as interest or as dividends of profits. All the other questions have been settled by the Barnes cases, 17 Wall., 294 [84 U. S., XXI., 544]; Stockdale cases, decided at the last Term [ante, 348], and Oulton v. Savings Institution, 17 Wall., 109 (84 U. S., XXI., 618).

The Act of Congress provided for a tax on dividends payable to depositors in savings institutions, but at the same time declared that the annual and semi-annual interest allowed and paid to depositors in such institutions, should not be considered as dividends. A distinction is thus expressly recognized between interest and dividends.

The San Francisco Savings Union was a Corporation organized under the Statute of Cali-ion of the court: fornia, approved Apr. 11, 1862 (Cal. Stat, 1862, p. 199), and subsequent Acts amendatory thereof. This Corporation received deposits, loaned them out and repaid them with the dividends arising from interest on loans. Two classes of deposits were received-ordinary deposits and term deposits; the latter being received on an agreement not to withdraw them except on a much longer notice than was required of the ordinary depositor. The dividends were paid according to the following article contained in the agreement on which the deposits were received: "At the expiration of every six months ending June 30 and Dec. 31, of each year, the Board of Directors shall ascertain the net profits of the Corporation, and not less than nine tenths of the same will be appropriated for a dividend to be declared and payable upon the guarantee capital, capital stock, the reserve fund and all deposits, at such monthly or yearly rate as the total amount of net profits may permit. The amount of dividend apportioned upon each account shall be in proportion to the time during which the several amounts represented by such account shall have formed part of the funds of the Corporation, except that deposits will not begin to draw dividend until one month after they are made, and the rate of dividend upon ordinary deposits shall be increased by twenty per cent., to form the rate upon funds remaining permanently in the hands of the Corpora tion, including term deposits. The remaining portion of net profits shall belong to the stock

The circuit court found that the payments to the depositors in this case were for dividends. If this was correct, the judgment must be reversed under the rulings in the cases just cited. The question, then, is, whether this finding was correct.

We think it was. This institution had a capital stock. Its business was to receive deposits, and in the contract under which they were received, provision was made for the accumulation of a reserve fund out of the profits earned, which was to be the property of the Company. The capital stock, reserve fund and deposits were also made, by the same contract, a com

[No. 170.]

Error to the Circuit Court for the District of California.

Mr. Chief Justice Waite delivered the opinion of the court:

The judgment of the circuit court is reversed upon the authority of Barnes v. R. R. Co., 17 Wall., 294 [84 U. S., XXI., 544], and Stockdale v. Atlantic Insurance Co., decided at the last Term [ante, 348], and the cause remanded, with instructions to enter judgment in favor of the defendant.

mon fund to be loaned out by the Company as GEORGE OULTON, Collector, etc., Plff. in opportunity offered. The stock and reserve Err., v. THE CALIFORNIA INSURANCE COMfund formed a guaranty capital for the secu-PANY. rity of the return of the deposit to the creditor. At the expiration of every six months the directors were required to ascertain the amount of the profits, and after deducting certain salary and expenses and setting out a certain pro portion, not exceeding one tenth, to the stockholders as a compensation for furnishing the capital, apportion the remainder for a dividend upon the capital stock, reserve fund and deposits, at such yearly rate as the total amount of net profits would permit. The dividend apportioned to each account was to be in proportion to the time the several amounts represented in the account formed part of the funds of the Corporation, and the rate of dividends on ordinary de posits was to be increased by twenty per cent. to form the rate upon the funds remaining permanently in the hands of the Corporation, including what were denominated "term deposits." The directors were also required to determine and make known from time to time a rate of interest to be paid to depositors who might wish to take such rate in lieu of dividends on drawing

out the balance of their accounts between one dividend day and another. Thus these depositors contracted, not for a rate of interest to be paid upon their deposits, but for a share of the profits of the business in which their money was, by agreement, to be employed. It is true that the profits of the Company were principally to be derived from interest upon loans made, but they were none the less on that account profits. The interest received for the loan of each deposit was not kept by itself, and paid to the depositors after deducting a charge to cover expenses, but all was placed in a common fund, and when the net result of the business was ascertained, that was divided among the several contributors according to the value of their contributions. Such a division clearly produces a dividend according to the common understanding of that term. The parties themselves so understood it, for they gave it that name in the contracts, executed when the depositors made their deposits. They stipulated for the payment of dividends and not interest.

The judgment of the Circuit Court is reversed and the cause remanded, with instructions to enter a new judgment in favor of the defendant.

GEORGE OULTON, Collector, etc., Piff.in Err., v. THE SAVINGS AND LOAN SOCIETY.

L. H. CARY, Collector, etc., Piff. in Err., v. SAME;

and

SAME, Plf. in Err., v. THE GERMAN SAVINGS AND LOAN SOCIETY.

[Nos. 169, 172, 173.]

RICHARD H. AND JACOB H. PLEAS-
ANTS, Piffs. in Krr.,

v.

HAMILTON G. FANT.

(See S. C., 22 Wall., 116–123.)

Declarations of partner, when not admissible to prove partnership—presumption of partnership -question for jury-when court may instruct jury what verdict to find.

*1. Where the question before the jury is whether the defendant was a partner with K., so as to make him liable for the debts of the firm, K.'s declarations to third persons are not admissible in favor of plaintiffs, until they have established a prima facie case of partnership by other evidence.

2. The admission of defendant and the deposition of K. to the effect that defendant had procured for K. a loan of money to be used in a purchase of cotton and that K. had voluntarily promised to give defendant a part of the profits, if any were made, for his assistance in procuring the loan, when no raise such a presumption of partnership. sum or proportion of profits was named, does not

3. Nor is such evidence sufficient to require the court to submit the question of partnership to a jury, and its instruction to find for defendant was right. 4. Such instruction is right where the court would decide for defendant on a demurrer to all the evidence, and the true rule in the case is, that if to the judicial mind the evidence tested by the law of the issue and the rules of evidence is not sufficient to justify a jury fairly and reasonably in finding a verdict for plaintiff, the court should so tell the jury.

5. If the court can see that if a verdict for plaintiffs should be rendered, it ought to be set aside as being unwarranted by the testimony, instructions to find for defendant should be given in advance of the verdict.

[No. 178.]

Argued Feb. 4, 5, 1875. Decided Feb. 22, 1875.

Ν

IN ERROR to the Circuit Court of the United

States for the District of Maryland.
The case is stated by the court.

Messrs. I. N. Steele and S. T. Wallis, for plaintiffs in error:

While the rule of evidence does not allow one Error to the Circuit Court for the District of partner to bind or speak for the other, until California.

proof has been given of his authority, it, nevertheless, requires nothing more than proof tend ing to establish the authority; proof legally sufficient to go to the jury on the point.

*Head notes by Mr. Justice MILLER.

NOTE.-Evidence; declarations and admissions to prove partnership; general reputation; common ru mor. See note to Teller v. Patten, 61 U. S., XV., 831.

When a verdict may be directed by the court. See note to Grand Chute v. Winegar, 82 U. S., XXL, 174.

The case rests after all on the question whether in Fant's declaration to the plaintiffs and Keene's deposition there was evidence of a partnership on which a verdict for plaintiff could have been sustained.

and the simple question in dispute was, wheth- | here offered to Keene's statements to plaintiffs er the defendant was a partner in the firm of was improperly excluded. L. F. Keene & Co., so as to charge him with a debt conceded to be due by that firm to plaintiffs. The case was tried before a jury, and many exceptions taken to the ruling of the court in admitting and excluding evidence which was not important. When the testimony was through, both plaintiffs and defendants prayed instructions of the court, which were all refused, and the court said to the jury: There is no evidence in this cause from which the jury can find that defendant had such an inter est in the purchase and sale of the cotton by Keene & Co. as will make him, the defendant, a partner as to third persons; and the jury will, therefore, find their verdict for defendant." The bills of exception disclose the testimony on which this instruction was founded, and we are called upon to say whether the verdict founded on that instruction should be set aside and the judgment reversed.

The direct testimony offered to prove the partnership, is confined to the statements of Fant in a conversation with one of the plaintiffs, and clerk in their office, and the deposition of Keene. The substance of the former is, that Fant denied that he was a partner, said he knew from some experience what was neces sary to make him a partner, and admitted that he had procured for Keene a loan of $10,000 in gold, from a bank of which he was presi dent, and that he was to receive part of the profits of Keene's venture in purchasing the cotion with that money, as compensation for procuring the loan. What portion of the profits he was to receive, was not stated.

Keene, in his deposition, denied that Fant was a partner in the transaction, but said that Fant had negotiated for him the loan from the bank and he had made Fant a promise, which was entirely voluntary, to give him a part of the profits he might realize, and that he had mentioned no particular part or portion of the profits to be so given.

After the admission of this testimony, plaint iffs, on the ground that they had sufficiently shown a relation between Fant and Keene to admit of Keene's declaration to third persons as to Fant's interest, offered to prove by one of the plaintiffs that Keene had told him Fant was a partner, and asked that plaintiffs would advance money enough on the cotton then in their possession as brokers to enable him to pay Fant his money and let him out of the firm. This offer was objected to, and the objection sus tained by the court.

A large amount of testimony, however, was admitted, the object of which was to show that Fant, as president of the bank, was in the habit of using the money of the bank in private speculation, without the knowledge of the directors; but this was very feeble and far from establishing that fact.

If the admission of Fant to plaintiffs, and the evidence of Keene, are insufficient to raise a prima facie presumption of partnership, then Keene's declarations on that subject were inad missible, and the court was right in its instruction to the jury. If it was sufficient for that pur pose, then it was erroneous, and the evidence

We have been favored by counsel with a reference, very learned and very exhaustive, to the authorities on the question of how far or when a participation in the profits subjects a party to the liability of a partner to third persons. And it must be confessed that some of the discriminations, where profits are used as compensation for definite services, are very nice.

We do not think that a close examination into these is necessary in this case. According to Keene's testimony there was clearly no contract binding him to divide the profits with Fant. He says the promise was entirely voluntary, and that no portion of the profits was mentioned. By "voluntary” he undoubtedly means that it was not a part of the agreement by which he obtained the money, but a gratuitous promise to reward his friendship if he succeeded in his venture.

Fant's statement to the plaintiff, as detailed by the latter, differs but very little from this. As a compensation for obtaining the loan, he says that Keene agreed to allow him a part of the profits, but how much or what proportion, or whether it was a definite sum to be paid out of the profits, or a proportionate part of the profits, is not shown.

If one of the most approved criteria of the existence of the partnership in such cases be applied to this, namely: the right to compel an account of profits in equity, the evidence totally fails. In a suit for that purpose, founded on this precise statement, no chancellor would hesitate to dismiss the bill.

But we are pressed with the proposition that it was for the jury to decide this question, because the testimony received and offered had some tendency to establish a participation in the profits, and the question of liability under such circumstances should have been submitted to them, with such declarations of what constitutes a partnership as would enable them to decide correctly.

No doubt there are decisions to be found which go a long way to hold that if there is the slightest tendency in any part of the evidence to support plaintiff's case, it must be submitted to the jury, and in the present case, if the court had so submitted it, with proper instructions, it would be difficult to say that it would have been an error of which the defendant could have complained here.

But, as was said by this court in the case of The Improvement Co. v. Munson, 14 Wall., 448 [81 U. S., XX., 872], recent decisions of high authority have established a more reasonable rule, that in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed.

The English cases there cited fully sustain