Colonial Imports, Inc. v. Carlton Northwest, Inc.

In this case we are asked to decide who should bear the loss when an independent automobile broker declares bankruptcy after receiving payment from one party for vehicles to be delivered, but without having given payment in full to the other party holding the vehicles. At trial, petitioner, Colonial Imports, Inc. (the first party) succeeded in recovering against the respondent, Carlton Northwest, Inc. (the second party) under theories of negligent misrepresentation and equitable estoppel. The Court of Appeals reversed the trial court on both theories and vacated the judgment. We agree with…