Bovard v. American Horse Enterprises, Inc.

James Ralph (defendant) agreed to buy American Horse Enterprises, Inc. (Enterprises) (defendant company) from Robert Bovard (plaintiff), signing promissory notes to finance the purchase. When Ralph failed to pay, Bovard sued to collect. At trial, evidence showed Enterprises manufactured both jewelry and drug paraphernalia used for smoking marijuana. The trial court considered separately whether the sale contract was illegal and void, and found that although manufacturing drug paraphernalia wasn't itself illegal when the contract was signed, a state statute criminalizing possession, use, or transfer of marijuana implied a public policy against manufacturing paraphernalia for that purpose — so the contract's consideration violated that policy and the contract was void. Bovard appealed.