Direct Sales Co. v. United States - 319 U.S. 703, 63 S. Ct. 1265 (1943)

Rule:

It can make no difference the agreement was a tacit understanding, created by a long course of conduct and executed in the same way. Not the form or manner in which the understanding is made, but the fact of its existence and the further one of making it effective by overt conduct are the crucial matters. The proof, by the very nature of the crime, must be circumstantial and therefore inferential to an extent varying with the conditions under which the crime may be committed.

Facts:

Petitioner, a registered drug manufacturer and wholesaler, conducted a nationwide mail-order business from Buffalo, New York. The evidence related chiefly to its transactions with one Dr. John V. Tate and his dealings with others. Dr. John dispensed illegally vast quantities of morphine sulphate purchased by mail from petitioner. The indictment charged petitioner, Dr. Tate, and three others, Black, Johnson and Foster, to and through whom Tate illegally distributed the drugs, with conspiring to violate § 1 and 2 of the Harrison Narcotic Act over a period extending from 1933 to 1940. Foster was granted a severance, Black and Johnson pleaded guilty, and petitioner and Dr. Tate were convicted. Petitioner sought certiorari to review the decision of the circuit court, which affirmed its conviction for conspiracy to violate the Harrison Narcotic Act. Petitioner argued that the evidence was insufficient to support its conviction.

Issue:

Was the evidence sufficient to support petitioner’s conviction under § 1 and 2 of the Harrison Narcotic Act?

Answer:

Yes.

Conclusion:

The court affirmed the corporation's conviction because the evidence of the corporation's mass advertising, bargain-counter discounts, and large quantities supplied to the physician were sufficient to show that it conspired with the physician to illegally distribute morphine sulphate. According to the court, it can make no difference that the agreement was a tacit understanding, created by a long course of conduct and executed in the same way. Not the form or manner in which the understanding was made, but the fact of its existence and further making it effective by overt conduct were the crucial matters.