Before McLAUGHLIN and GANEY, Circuit Judges, and COHEN, District Judge.
Rossville Salvage Corporation brought an action in the United States District Court for the Eastern District of Pennsylvania against S.E.Graham Company for breach of a sales contract. Diversity of citizenship of the parties and the requisite amount in controversy are the basis of the district court's jurisdiction. See 28 U.S.C.A. § 1332. The jury found in favor of defendant. Plaintiff has appealed from the court's denial of its motion for a new trial.
On August 7, 1958, defendant's tanker S. E. Graham caught fire after a collision. Defendant, deeming it economically unfeasible to repair and restore her to service, decided to put the vessel up for sale. The vessel was anchored in Narragansett Bay, near Newport, Rhode Island. Since the vessel might still contain gasoline vapor, defendant considered her a hazard to navigation. It hired a workboat with a small crew at $15 per hour to give an around-the-clock warning to other vessels to keep clear of the disabled tanker. It elected to invite bids for the purchase of the vessel. As advertised in newspapers, the invitation was as follows:
Tender invited purchase M.V. "S. E. GRAHAM" #244168 afloat at Buoy #6 Newport, R.I. for inspection at bidder's risk Monday, August 25th, 1958 between Zero 900-1700. Recently damaged. Gasoline cargo discharged; not gas free - sale as is/where is. Address bids:
with certified check for 10% of bid. Owners reserve rejection of bids. Bids open noon August 27, 1958 with notification of award within 24 hours. Within 24 hours of notification successful bidder required to forward certified check for the balance of payment and take title and possession of vessel.*fn1
One John J. Witte, president of plaintiff, read the advertisement and went to Newport to inspect the tanker. He saw the condition of the vessel and was aware that a small craft was stationed nearby keeping watch over the vessel. The plaintiff submitted a bid, as did three others, for the purchase of the tanker.
The submitted bids were opened in New York City on August 27, 1958. Plaintiff's bid of $19,500, accompanied by a check for $2,000, was the highest. On the same day, defendant's attorney, Benjamin F. Stahl, Jr., telephoned Witte to inform him that his company was the successful bidder and that settlement would take place at 1:00 p.m. in Camden, New Jersey, on August 28, in accordance with the terms of the invitation for bids. He reiterated the necessity of plaintiff's taking possession as well as title to the vessel at the time of settlement. A confirming telegram and letter were sent to plaintiff at its Staten Island office address. The telegram states:
We confirm sale of S.E.Graham to you for the sum of $19,500 Settlement to be held Thursday, August 28th 1 PM at * * * 518 ...