Direct Sales Co. v. United States, 4956.

• Decision Date: 12 November 1942
• Docket Number: No. 4956.,4956.
• Citation: 131 F.2d 835
• Parties: DIRECT SALES CO., Inc., v. UNITED STATES.
• Court: U.S. Court of Appeals — Fourth Circuit

131 F.2d 835 (1942)

DIRECT SALES CO., Inc., v. UNITED STATES.

No. 4956.

Circuit Court of Appeals, Fourth Circuit.

November 12, 1942.

William B. Mahoney, of Buffalo, N. Y., for appellant.

Oscar H. Doyle, U. S. Atty., of Anderson, S. C. (Edward P. Riley, Assistant U. S. Atty., of Greenville, S. C., on the brief), for appellee.

Before PARKER, DOBIE and NORTHCOTT, Circuit Judges.

NORTHCOTT, Circuit Judge.

Appellant, Direct Sales Company, Inc., with four others, was indicted in the District Court of the United States for the Western District of South Carolina charged with the crime of conspiring to violate the Harrison Narcotic Act, 26 U.S.C.A. Int. Rev.Code §§ 2550 et seq., 3220 et seq. (Section 37, Criminal Code, 18 U.S.C.A. § 88). A plea in abatement and demurrer were interposed by the appellant and after argument the plea in abatement was denied and the demurrer overruled. 40 F.Supp. 917.

Two of those indicted pleaded guilty and a severance was granted as to another of the defendants. In November 1941 a trial was had at Greenwood, South Carolina, before a jury as to the appellant and the other defendant.

At the conclusion of the Government's evidence a motion was made on behalf of the appellant for a directed verdict and decision on the motion was reserved by the trial judge. This motion was renewed at the close of the entire case and was denied with exception to the appellant.

The jury returned a verdict of guilty as to the appellant and one Dr. John V. Tate. Motions to set aside the verdict and in arrest of judgment were made on behalf of the appellant. These motions were denied by the judge below who rendered an able and exhaustive opinion. 44 F.Supp. 623. Judgment was pronounced fining the appellant the sum of $1,000. From this action this appeal was brought.

Direct Sales Company is a corporation, having its principal place of business at Buffalo, New York, and is a manufacturer of and a wholesale dealer in drugs, including narcotics, and at the times mentioned in the indictment was registered as such under the provisions of the Harrison Narcotic Act. Dr. John Victor Tate is a physician residing at Calhoun Falls, South Carolina, and was, at the times mentioned in the indictment, registered under provisions of the Act in his proper class. The defendant Johnson was a resident of Augusta, Georgia, and defendants Foster and Black were residents of Spartanburg, South Carolina. Neither of them had been registered or had paid the special tax in any class under the provisions of the Act.

The Direct Sales Company, as its name implies, sells directly to the customer. It has no travelling representatives. It solicited the business of Dr. Tate by means of catalogs and circulars sent to him every ten days. The catalog used by this defendant is an ordinary pamphlet printed in black type on white paper, and a great number of preparations are listed in it. Narcotics, however, are not listed in the catalog itself. This defendant's uniform practice, during the period alleged in the indictment, was to insert into the catalogs a sheet of paper approximately four inches wide by five and one-half inches long, sometimes colored pink and sometimes blue, on which was listed morphine sulphate. It offered tablets of morphine sulphate for sale in lots of five hundred, one thousand and five thousand one-quarter and one-half grain tablets. The prices were from thirty to forty per cent less than could be obtained elsewhere.

The evidence disclosed that from the month of December 1937 to the month of January 1940 the appellant shipped to Dr. Tate the enormous quantity of 79,000 one-half grain morphine sulphate tablets. As many as 6,000 one-half grain...