Sinnar v. Le Roy

Supreme Court of Washington · 1954 · Contracts

270 P.2d 800 (Wash. 1954)

Updated July 26, 2026

ContractsIllegalityPublic policyillegal contractunpleaded illegalityin pari delictobeer licensestate liquor control board

Facts

Plaintiff operated a grocery store in Seattle and had previously been denied a beer license by the Washington state liquor control board. Defendant, a friend and customer, told plaintiff he thought he could get the license through a third party and said it would cost $450. Plaintiff gave defendant $450 in cash on the understanding that defendant would get the license or return the money, and defendant testified he gave the money to an unidentified Mr. Lewis. Plaintiff never received the beer license, and the evidence showed both parties knew a third party would be involved.

Issue

Whether plaintiff may recover money paid under an agreement that defendant would obtain a beer license or return the money when the evidence shows the transaction involved serious illegality tied to a state licensing matter, even though illegality was not pleaded as a defense.

Rule

If serious illegality appears from the evidence, especially in a matter within the realm of public policy, a court may and should consider it even if illegality was not pleaded. A court will not knowingly aid the furtherance of an illegal transaction, and where the parties are in pari delicto it will leave them where it finds them.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Portland, Omar Vega applied for a state-issued cannabis retail permit and was denied. His acquaintance, Nina Park, told him that for $8,000 she could use her "contacts" to get the permit approved through a third person, or else return the money. Omar paid her in cash, no permit was issued, and he sued to recover the money.

If the evidence shows both parties understood Nina would use a third party to secure a permit from the state, what is the strongest argument against Omar's recovery?

Explanation. The majority rule is that a court will not knowingly aid the furtherance of an illegal transaction involving serious illegality and public policy. A deal to obtain a state-issued license or permit through unofficial third-party influence contains the germ of possible corruption and contemplates means other than legal. Even when the plaintiff seeks return of money paid, the court leaves parties in pari delicto where it finds them.