Cleveland Shopping News Co. v. Routzahn

• Court: U.S. Court of Appeals — Sixth Circuit
• Writing for the Court: MOORMAN, HICKS, and ALLEN, Circuit
• Citation: Cleveland Shopping News Co. v. Routzahn, 89 F.2d 902 (6th Cir. 1937)
• Decision Date: 10 May 1937
• Docket Number: No. 7128.,7128.
• Parties: CLEVELAND SHOPPING NEWS CO. v. ROUTZAHN, Collector of Internal Revenue.

89 F.2d 902 (1937)

CLEVELAND SHOPPING NEWS CO. v. ROUTZAHN, Collector of Internal Revenue.

No. 7128.

Circuit Court of Appeals, Sixth Circuit.

May 10, 1937.

Irwin N. Loeser, of Cleveland, Ohio (Mooney, Hahn, Loeser & Keough, of Cleveland, Ohio, on the brief), for appellant.

W. F. Wattles, of Washington, D. C. (Frank J. Wideman, Sewall Key, Norman D. Keller, and Lester L. Gibson, all of Washington, D. C., and Emerich B. Freed and E. L. Foote, both of Cleveland, Ohio, on the brief), for appellee.

Before MOORMAN, HICKS, and ALLEN, Circuit Judges.

MOORMAN, Circuit Judge.

Appellant is a corporation organized under the laws of Ohio and is engaged in the business of printing. It publishes the Cleveland Shopping News for the purpose of advertising the merchandise of the downtown merchants in the city of Cleveland. These merchants upon becoming advertisers in the News purchase stock in the appellant under a contract by which it agrees to do their advertising at cost plus 7 per cent., the 7 per cent. to be deposited with it in an account known as the "Stock Purchase and Guaranty Account." The contracts provide that the appellant may use the funds accumulated in this account to purchase the stock of such merchants as have ceased to advertise with it, and also may charge against them any losses and extraordinary expenses incurred by it in publishing and distributing the Shopping News. They further provide that after such use of the account the balance remaining therein, including the stock acquired therefor, shall be allocated by the appellant to all the advertisers entitled to use space in the Shopping News in proportion to the amounts they have paid into the fund. Considerable sums had accumulated in the account on April 17, 1929, and April 30, 1930, respectively, and were thereafter distributed to the stockholder-advertisers according to the terms of their contracts. In its...