BOVARD V. AMERICAN HORSE ENTERPRISES, INC.
201 Cal.App.3d 832 (1988)
NATURE OF THE CASE: Bovard (P) challenged an order that dismissed his supplemental complaint
against American (D) and Ralph (D), a corporation and individual buyer, in an action by P to
recover on promissory notes executed in connection with the purchase of D, the corporation.
Ralph (D) cross-appealed from the trial court's post judgment order striking his memorandum
of costs and taxing costs.
FACTS: P owned a corporation called American Horse Enterprises, Inc. It made jewelry and
drug paraphernalia, which consisted of 'roach clips' and 'bongs' used to smoke marijuana and
tobacco. P sold the business to Ralph (D) in exchange for D's promissory note. D agreed to
purchase American Horse Enterprises, Inc. from Bovard (P). D signed promissory notes. D
failed to pay them and P sued D and American Horse (D). Testimony at trial revealed that the
corporation was in the business of manufacturing jewelry and drug paraphernalia; primarily
bongs and roach clips used to smoke marijuana and tobacco. The trial court excused the jury
to determine if the contract for sale was illegal and thus void. At the time of the sales
contract, it was legal to manufacture such items but it was later criminalized. The trial
court held that a public policy against the manufacture of drug paraphernalia was implicit
in state statutes making the possession use and transfer of marijuana unlawful. The trial
court then held that the contract was illegal and void. The court found the parties were in
pari delicto and thus with respect to their contractual dispute should be left as the court
found them. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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