The Court of Appeals held that the promissory note was void and unenforceable. Frye was a "supervisor" and Taylor was his "distributor" within the Koscot marketing program. Koscot had been found by previous courts to constitute an illegal lottery due to its structure as a pyramid scheme. Frye wanted to move up to the level of distributor, a move that required him to pay $2500 to Koscot and to procure a substitute supervisor. Taylor accepted a promissory note for the amount, and Frye advanced after finding a substitute supervisor. Frye sued to nullify the note on the grounds that Koscot was an illegal lottery and to enforce the note would be counter to public policy. The Appeals Court agreed, ruling that a promissory note used to further participation in an illegal scheme is void against public policy.

The full case and summary are also available at: http://www.mlmlegal.com/legal-cases/Frye_v_Taylor.php