delivered the opinion of the court, March 17, 1884.

■ Conceding the correctness of the construction placed upon the words “ gross income ” by the master and the court below, we are of opinion that they erred in their application of them to the facts of this case.

The master found that the firm made no profits, and hence that there was no fund out of which the appellant’s salary of $500 per year could be paid.- To reach this result he has stated a debit and credit account with the “Susquehanna Mills,” from which: it appears the appellant is a debtor to the concern in the sum of $500.78. Ho fault is found with the items of this account.' They are not shown to be incorrect, nor is error assigned thereto except in the matter of interest. It is the result that is complained of.

As a mere cash account it is doubtless correct. It shows the expenditures and receipts. But when we examine it to ascertain what, if any, profits were made by the firm, we cannot adopt the master’s conclusions. The item of $1,385.15, “amount paid for building expenses” must be thrown out in estimating profits, for the plain reason that it was expended for betterments. It was evidently for the permanent improvement of the real estate. . The master does not give the items of this expenditure, but enough appears to show its general character. In one place he refers to it as “ the amount, expended for building.” In another place he says : “ The mill was.not in a condition for successfully parrying .on the busi*417ness, and considerable money was expended in improving it.” Again the improvements were for “repairing, improving and increasing the capacity and power of the mill.” This is something outside of the ordinary repairs to a property of this description. The improvements were evidently of a permanent character, for the purpose of increasing the capacity of the mill. They added to the permanent value of the real estate, and must therefore be regarded as capital. The outlay was not a part of the annual current expense of carrying on the business. It was perhaps a necessary expenditure, but it was no more a part of. the expenses of the business than the purchase of the mill property itself.

We are of opinion that the appellant is entitled to his salary at the rate agreed upon up to April 1, 1877. This will leave no balance in the hands of the appellant to charge interest upon. We need not therefore discuss the fifth assignment. The costs wc will leave as the court below has placed them ; the costs of this appeal, however, must be paid by the appellees. ' It will be the duty of the court below to enter a decree in accordance with this opinion, or if necessary, to send the case back to the master for that purpose.

The decree is reversed at the costs of the appellees, and the record remitted to the court below with instructions to enter a decree in accordance with the foregoing.