Karpinski v. Collins

John Karpinski (plaintiff) was a small dairyman in the Santa Clara Valley. In April 1962, Karpinski received a call from Gene Collins (defendant), the president of the Santa Clara Creamery (Creamery) (defendant). Collins offered to purchase milk from Karpinski at a Grade A contract rate if Karpinski agreed to pay a secret rebate of 4.5 cents per gallon. Such rebates were prohibited by the Milk Stabilization Act. At the time, Karpinski had only been able to secure dairy contracts at the Grade B rate, which was 60 percent of the Grade A rate. The Grade B rate was considered insufficient to support a dairyman’s business. Karpinski accepted the offer, because he had no other Grade A options. On April 1, 1962, Karpinski entered a contract to sell the Creamery 51,600 pounds of Grade A milk per month at the Grade A rate. During the life of the contract, Collins billed Karpinski a monthly feeding charge that was equal to 4.5 cents per gallon of milk received. Karpinski paid the feeding charge but never received any feeding services. Karpinski later loaned Collins $6,500.00 in exchange for reducing the rebate to 3 cents per gallon. By October 1963, Karpinski was unable to continue paying the rebate. Collins terminated the contract. Karpinski sued Collins, Ruth Collins (defendant), and the Creamery to recover the $6,500.00 loan and $4,177.72 in rebates. The trial court ruled in Karpinski’s favor and granted him the requested total of $10,677.72. The defendants appealed on the grounds that the trial court erred in finding that Karpinski was not in pari delicto with the defendants.