Karpinski v. Collins

Brief Fact Summary.

Collins appealed a trial court judgment that determined that Karpinski was not in pari delicto with Collins in an illegal contract.

Synopsis of Rule of Law.

A party can recover on a contract using the illegality defense if the parties are not in paridelecto.

Facts.

Collins offered to purchase milk from Karpinski at Grade A contract price if Karpinkiagreed to a secret rebate of 4.5 cents per gallon, in violation of the Milk Stabilization Act. Karpinski accepted the offer and when Karpinski was unable to continue paying the rebate, Collins terminated the contract. The trial court granted judgment in favor of Karpinski.

Issue.

Whether a party can recover on a contract using the illegality defense if the parties are not in pari delicto?

Held.

Yes. The judgment of the trial court is affirmed. It is evident that Karpinski was coerced into entering into the illicit contract with Collins because an ordinary dairy farmer cannot survive on Grade B contracts.

Discussion.

In pari delicto requires two parties to be equally at fault when entering into an illegal contract, barring recovery for both parties. If one party was compelled to enter into an illegal contract, that party is not in pari delicto with the defendant and can recover for the amount paid under the contract.