Direct Sales Co. v. United States

The Facts

Defendant accused of violating the Harrison Narcotic Act.  Defendant, a drug manufacturer, does mail-order business from NY and deals with a particular doctor.    Defendant sold morphine to the doctor “so frequently and over so long  a period it must have known he could not dispense the amounts received in lawful practice and was therefore distributing the drug illegally.”  Over the last two years of the period in question, the doctor ordered nothing but morphine.  His sales volumes and quantity of orders were such that any corporation should and would have been made suspicious by the order of a small town doctor.  At one point, an agent warned the defendant corporation that the Dr. was selling illegally, and so the defendant reduced the strength and quantity of the sale, but continued to sell to him regardless.

Procedural HistorY

Convicted at trial.  Prosecution takes as a given that the there was insufficient evidence to show defendant conspired directly with the buyer.  Defense is attempting to show specific intent to agree is required for conviction.


“One does not become a party to a conspiracy by aiding and abetting it, through sales of supplies or otherwise, unless he knows of the conspiracy; and the inference of such knowledge cannot be drawn merely from knowledge the buyer will use the goods illegally.

The Issue

Whether the sale of legal goods with knowledge that the purchaser would resale the goods illegally constitutes conspiracy.

The Holding

Yes.  Defendant was in the business of selling legal goods; but these legal goods had an “inherent capacity for harm.”  The selling of morphine is similar to the sale of machine guns:  both goods are highly restricted because of their danger and both have primary markets in criminal activity – gangsters and morphine addicts.  “Additional facts, such as quantity sales, high-pressure sales methods, abnormal increases in the size of the buyer’s purchases, etc., which would be wholly innocuous or not more than ground for suspicion in relation to unrestricted goods, may furnish conclusive evidence, in respect to restricted articles, that the seller knows the buyer has an illegal object and enterprise.”  For conspiracy’s purpose, the knowledge of these facts naturally leads to intent.  Therefore, the more knowledge the prosecution can establish in a case like this, the more intent can be naturally inferred.    In other words, this case shows a difference between established products like sugar, and highly regulated goods like drugs.  The conspiracy, therefore, can be inferred from the nature of the good (highly regulated).  The jury can infer knowledge of illicit use through direct sales, which provides specific intent.  Knowledge together with facts showing promotion of the good can be sufficient to show specific intent for an agreement.  The government’s evidence can support this inference.

Because the prosecution has shown  evidence here of the defendant’s substantial knowledge – “working in prolonged cooperation with a physician’s unlawful purpose” – to supply him for the illicit purpose … “there is no legal obstacle to find that the supplier not only knows and acquiesces, but joins both mind and hand with him to make its accomplishment possible.”  It does not matter that the defendant and conspirator never met face to face.  The evidence here created by knowledge of sales volumes is enough to demonstrate intent and an overt agreement – though it is implied.

Leave a Reply