Three original Rife Machines have been found. Find out how they really worked by reading:
The Rife Machine Report
|Some of the Beam Ray Corporation members|
Hoyland versus Beam Ray Corporation
Page 2 of 3
Transcribed from the original 1939 Beam Ray Trial
This is the complete transcribed manuscript of the 1939 Beam Ray Trial where Philip Hoyland tried, by court action, to gain complete control of Dr. Royal Raymond Rife’s machine and frequencies. Until now only parts of it have been available to read unless you were willing to read it from Bertrand Comparets (Dr. Rife’s attorney) original transcript on this site. Now it will be easier for anyone to read in this new transcribed format.
1001. Comparet: how many then?
1002. Hoyland: I don't think more than two were made.
1003. Comparet: she typed these?
1004. Hoyland: I couldn't say whether she did or she didn’t.
1005. Comparet: are you sure there were only two primary drafts before it was signed?
1006. Hoyland: I can't remember any more.
1007. Comparet: the final one was written in the office of Steiner and after you read this weren't certain changes made and weren't these changes rewritten by Mrs. Willman?
1008. Hoyland: I don't remember.
1009. Comparet: Comparet showed Hoyland a document referred to, but Hoyland did not remember it. There were a number of talks about the terms of the license that was to be given to the Corporation?
1010. Hoyland: yes.
1011. Comparet: was it not stated that the license should be an exclusive one?
1012. Hoyland: no Sir.
1013. Comparet: that was not discussed at any of these conferences?
1014. Hoyland: that was never discussed at any time.
1015. Comparet: you mean that at none of those discussions among you, Rife and Hutchinson, was there never any talk of Beam Ray Corporation receiving an exclusive license?
1016. Hoyland: there never was.
1017. Comparet: was that discussed when Henderson and Mrs. Willman took part?
1018. Hoyland: no.
1019. Comparet: at the time of the discussions of the terms you knew that Hutchinson was a member of the board of directors of the company and you knew that he had a double position in the talks as one of the three owners and also one of the directors of the company?
1020. Hoyland: it seems that I realized it.
1021. Comparet: was anything said among the owners to the effect that the company should be given not an exclusive but that it should be merely one of the many companies given a license?
1022. Hoyland: Mr. Hutchinson and I discussed this, yes.
1023. Comparet: who else?
1024. Hoyland: just the two of us.
1025. Judge Kelley: did you intend that the Corporation should advertise the machine widely and did you understand that if other corporations were formed to manufacture those machines they would get the advantage of the advertising of this Corporation?
1026. Hoyland: I don't think we ever thought of that.
1027. Comparet: weren't you leaving it largely up to Mr. Hutchinson to take care of the details of licensing?
1028. Hoyland: yes, he was the manager for the owners.
1029. Comparet: then it was your intention that other companies would be licensed to compete with the Beam Ray company in the manufacturing of this machine?
1030. Hoyland: that is correct.
1031. Comparet: did you inform Dr. Rife that you meant to license others?
1032. Hoyland: I don't know.
1033. Comparet: you did however, tell Mr. Hutchinson that that was your intention?
1034. Hoyland: he brought it up the first time himself. We spoke of it often.
1035. Comparet: were these discussions prior to the final signing of the contract with Beam Ray Corporation?
1036. Hoyland: yes.
1037. Comparet: did you inform any other officers of the Corporation that you intended to license others to compete with the Beam Ray Corporation?
1038. Hoyland: I don't remember.
1039. Comparet: did you say that you understood fully that the only one signing the agreement with the British granting them a license was the company and you also understood that the British were to receive an exclusive license?
1040. Hoyland: yes.
1041. Comparet: yet you also understand that Beam Ray could not give this license to the British because they didn’t have an exclusive license themselves?
1042. Hoyland: they were acting for the owners and given a share in what we got out of the British.
1043. Comparet: will you read the question again please.
1044. Judge Kelley: did you understand that the Corporation was acting as an agent?
1045. Hoyland: yes.
1046. Judge Kelley: did Dr. Rife authorize the Corporation to act as his agent?
1047. Hoyland: he authorized Hutchinson to act for him.
1048. Judge Kelley: did you understand when the British signed that contract that they thought they were getting an exclusive license?
1049. Hoyland: yes, getting it through the owners.
1050. Comparet: when you read the agreement between Beam Ray and the British you say that it doesn't say a word about the Corporation making an agreement acting for the owners?
1051. Hoyland: no it doesn't specify it.
1052. Comparet: in November when you signed a letter changing earlier agreements you and Mr. Hutchinson signed as authorized representatives of Beam Ray Corporation, you were acting under authority you got from the Corporation?
1053. Hoyland: yes.
1054. Comparet: you understood that you needed that written authorization from the Corporation in order to change the contract?
1055. Hoyland: we took it but we never used it.
1056. Comparet: if Gonin had wanted to see that written authorization you would have shown it to him?
1057. Hoyland: yes.
1058. Comparet: you have that paper from the Corporation in your possession now?
1059. Hoyland: if I had it, it would be in those letters I gave you today.
1060. Comparet: said it was not among those papers. You understood anyway, that you were acting under that authorization?
1061. Hoyland: yes.
1062. Comparet: I show you here a copy of a resolution of the board of directors dated November 11th , 1938. This was the authorization for Hutchinson and Hoyland to represent the company in New York.
1063. Hoyland: Hoyland identified the document.
1064. Judge Kelley: who were the owners at the time this was signed?
1065. Hoyland: the same three, Rife, Hutchinson and myself.
1066. Judge Kelley: did you understand that you were acting as an agent for the Corporation and on behalf of yourself?
1067. Hoyland: yes Sir.
1068. Judge Kelley: was there ever any authorization of any agent by Dr. Rife?
1069. Hoyland: I talked the matter over with Dr. Rife the day before we left for New York and he said anything you and Mr. Hutchinson decide will be agreeable to me.
1070. Judge Kelley: however, there was no written authorization from Rife?
1071. Hoyland: no.
1072. Sapiro: I think there is one, it hasn't been introduced yet.
1073. Judge Kelley: insisted that he wanted to see any written authorization from Dr. Rife.
1074. Comparet: showed a paper signed by Rife giving Hutchinson full authority to act in the owners’ behalf.
1075. Judge Kelley: declared that this paper did not go so far as to authorize the dealings with the British group.
1076. Comparet: put a question to Mr. Hoyland. You became associated with Beam Ray while it was still United Polytechnique Institute around the first part of May 1938?
1077. Hoyland: yes, April or the first part of May.
1078. Comparet: you went at frequent intervals to the company's offices?
1079. Hoyland: yes, I went every day.
1080. Comparet: you attended directors meetings before you became a member of the board?
1081. Hoyland: yes.
1082. Comparet: they were held around once or twice a month and you attended practically all the meetings until you went to New York?
1083. Hoyland: yes.
1084. Comparet: you continued to attend these meetings until sometime in January of this year?
1085. Hoyland: I was at one meeting in December to discuss expense accounts for the New York trip.
1086. Comparet: you were also at one directors meeting in January?
1087. Hoyland: no Sir.
1088. Comparet: not any directors meetings in January?
1089. Hoyland: no.
1090. Comparet: you read the minute book of the Corporation?
1091. Hoyland: not until I became a director.
1092. Comparet: are you sure of this?
1093. Hoyland: yes, I was never allowed to get at it.
1094. Comparet: and you desired to see it?
1095. Hoyland: it was always carefully kept out of my way. After I was a director I only read the minutes of the meetings as they took place.
1096. Comparet: you read and signed them in a good many instances?
1097. Hoyland: I think I signed one.
1098. Comparet: did you read the minutes of the meetings held prior to your becoming a member of the board?
1099. Hoyland: no Sir.
1100. Comparet: you were present at the directors meeting at which you were elected?
1101. Hoyland: after I had been elected, yes.
1102. Comparet: after this you made a motion to create a position of sales manager?
1103. Hoyland: I know that the position was created, but I am not sure that I made the motion.
1104. Comparet: showed him the minutes of that meeting calling his attention to the fact that Cullen called the meeting to order and referenced two items including Hoyland making the motion to create the position of sales manager?
1105. Hoyland: yes, somebody had to make the motion so I made it.
1106. Comparet: when was the first time that you ever saw the minutes of any meeting of the board of directors prior to the meeting at which you were elected?
1107. Hoyland: in January of this year.
1108. Comparet: not before?
1109. Hoyland: no Sir.
1110. Comparet: when you saw the minutes of the meetings which you had attended as a director were they in the minute book?
1111. Hoyland: I am not sure, I think sure.
1112. Comparet: why didn’t you look back at some of the minutes of the former meetings?
1113. Hoyland: they were just handed to me to sign and I signed them.
1114. Comparet: you were in the office of the company many times; didn't you ask to see these minutes?
1115. Hoyland: no.
1116. Comparet: You had no curiosity as to what was in them?
1117. Hoyland: no.
1118. Comparet: you state in your complaint that the rights of the Corporation under its contract with the owners have been challenged. By that you mean the company’s claim that it has an exclusive license to manufacture these machines?
1119. Hoyland: yes.
1120. Comparet: this refers also to the company having conferred an exclusive license to the British doesn't it?
1121. Hoyland: that's right.
1122. Comparet: you are aware that you are the only one of the three owners who has challenged the company?
1123. Sapiro: objected but Judge Kelley overruled him.
1124. Hoyland: this was talked over with Dr. Rife in his laboratory the end of December. He was in accord with what I was doing at that time, as regards to this particular item.
1125. Comparet: said, that is all at this time.
Sapiro took the witness.
1126. Sapiro: do you recall how long a time you and any others worked in making these four machines for the British?
1127. Hoyland: we started on the 14th of June and they were shipped in August, we worked about six weeks.
1128. Sapiro: were the clinical machines the same as were made for Dr. Hamer?
1129. Hoyland: yes.
1130. Sapiro: was that the same as the machine used on Mrs. Henderson?
1131. Hoyland: no, but the same type.
1132. Sapiro: was it the same as the machine the British saw when they were here?
1133. Hoyland: yes.
1134. Sapiro: you said that an expert could wire the machines in one day, what did you mean by that?
1135. Hoyland: that referred to if we were doing mass production.
1136. Sapiro: Sapiro then questioned Hoyland about the actual making of the machines and tried to show that Hoyland made the price of production up and that Hutchinson agreed with this figure. Sapiro showed Hoyland a paper dated July 22nd , 1938, and asked him if he had seen the paper before. It was a copy of a letter to Dr. Gonin, signed by Hutchinson. Hoyland recognized it. Was Hutchinson then manager for the company?
1137. Hoyland: yes.
1138. Judge Kelley: read the letter over Comparet’s objection and admitted it as evidence.
1139. Sapiro: the figure you gave the British for the cost of the four machines was a fair figure based on actual costs of producing these machines?
1140. Hoyland: yes.
1141. Sapiro: then read the minutes of a meeting of the board resolving that Hoyland should draw up a letter in reply to a letter from the British. Did you write such a letter?
1142. Hoyland: yes.
1143. Sapiro: I show you a copy of the letter. Is this the letter and was the original signed by you?
1144. Hoyland: yes.
1145. Sapiro: then read from the letter to the effect that code frequencies had been sent to the British. Did you present copies of this letter to members of the board?
1146. Hoyland: yes.
1147. Sapiro: did they all approve of it?
1148. Hoyland: they all agreed that it was a good letter.
1149. Sapiro: did anyone complain about the contents of other letters?
1150. Hoyland: no.
1151. Sapiro: did you have a lot of correspondence with the British?
1152. Hoyland: I sent quite a lot of letters to them.
1153. Sapiro: Sapiro called upon Hoyland to identify copies of letters sent by Hoyland to the British. Hoyland did so and these were then admitted as evidence. One of these letters referred to an enclosure showing Parsons how to operate the Rife Ray machine, another letter referred to the fact that all the friction had been smoothed out in the company and they were doing a fine business, that Lyle had taken over Hutchinson's place after his resignation and that everything was going along beautifully.
1154. Judge Kelley: remarked, "they were a little bit overly optimistic weren't they." Another letter referred to a list of schematics and changes in the personnel of the company.
Court adjourned until Wednesday 10 A.M.
Wednesday, June 28th , 1939.
Hoyland on the stand.
1155. Sapiro: Sapiro introduced more letters written by Hoyland to the British. These had to do with equipment and technical matters. One dated August 18th , contained a list of parts shipped, and August 27th , letter from Hoyland to Blewett that referred to changes in the frequencies eliminating number five plug. Letter of September 9th , referred to seventh day Adventists. Letter September 23rd , general remarks about business. Letter September 24th , to Parsons, explanation of frequencies. Letter August 29th , to Hutchinson, Hoyland, and Beth Willman, signed by Dr. Couche.
1156. Comparet: objected on grounds that Dr. Couche’s letter was hearsay, and Judge Kelley sustained the objection.
1157. Sapiro: tried to introduce a letter to Dr. Couche from Hutchinson.
1158. Comparet: objected again on the same grounds and was sustained by Judge Kelley, who declared that he did not consider Dr. Couche a part of the litigation.
1159. Sapiro: A letter from Blewett was admitted in which he said that he was delighted to hear that Hoyland was holding a controlling interest, as he was worried when he got letters from people he didn't know. Did you know Mr. Blewett when he was here with the British group?
1160. Hoyland: yes.
1161. Sapiro: was anyone besides you writing to Dr. Blewett?
1162. Hoyland: yes, Hutchinson, Mrs. Wilman and Dr. Rife.
1163. Sapiro: how did you know this?
1164. Hoyland: they told me.
1165. Sapiro: Dr. Rife was not a party to the action so we must eliminate him. Did the others tell you that they were writing to Mr. Blewett?
1166. Hoyland: yes, they did.
1167. Sapiro: the original of the document of assignment of interest to Hutchinson dated April 30th , 1938; you said that it was in your handwriting, was that copied by you from something and if so from what?
1168. Hoyland: from a typewritten sheet that had been prepared by Mr. Hutchinson.
1169. Sapiro: did you make any changes in the document when you copied it?
1170. Hoyland: yes, I changed one line.
1171. Sapiro: what was that line?
1172. Comparet: objected and was sustained but Judge Kelley allowed Hoyland to point out the line, but said, that he could not read it aloud.
1173. Sapiro: said, that he was trying to show that Hutchinson attempted to dominate the other two owners. (Hoyland and Rife). But Judge Kelley did not consider this line of evidence relevant and would not admit it.
1174. Sapiro: you met Dr. Gonin in New York about November 17th . Did you discuss with him at that time all the other matters that he had been inquiring about?
1175. Hoyland: I discussed all the questions that he brought up about technical things.
1176. Sapiro: was Mr. Hutchinson present at these meetings?
1177. Hoyland: yes.
1178. Sapiro: was Dr. Gonin satisfied with the information and did he say so in the presence of Mr. Hutchinson?
1179. Hoyland: yes.
1180. Sapiro: was the new contract that was sent over to the British a restatement of the old contract or did it differ in one particular from the others?
1181. Comparet: objected and was sustained.
1182. Sapiro: did you discuss this agreement with Mr. Edwards?
1183. Hoyland: yes.
1184. Sapiro: at that time did either of you speak of any objections to that agreement?
1185. Hoyland: yes, we decided to have one of the payments put off until they could get their machines in working order.
1186. Sapiro: were the British in default at that time, and if so how much?
1187. Hoyland: yes, they were, about $5000.
1188. Sapiro: then brought out that the British were in default of another payment later and that Edwards and Hoyland discussed the matter. Were any conclusions expressed by you or Edwards at that time as to what was to be done?
1189. Hoyland: yes, we both made suggestions.
1190. Sapiro: do you remember any made by Edwards?
1191. Hoyland: we decided to send the British a cable saying that a new contract should be drawn up and the payments that had already been made by them should be credited to them on the new contract.
1192. Sapiro: did Mr. Edwards prepare such a cablegram?
1193. Hoyland: yes he did.
1194. Sapiro: who sent it?
1195. Hoyland: he asked me to, and I did.
1196. Judge Kelley: did you ever get a financial report on the British group?
1197. Hoyland: no Sir.
1198. Judge Kelley: did you know of anything being done along that line by the officers or directors of the company?
1199. Hoyland: no Sir.
Morning recess was called.
Hoyland on the stand.
1200. Sapiro: you testified today that Hutchinson had said that you and Rife would get about 30% of the stock of Beam Ray Corporation?
1201. Hoyland: yes Sir.
1202. Comparet: was this an inducement to you to sign up with Beam Ray Corporation?
1203. Hoyland: yes.
1204. Comparet: on references to licenses to other corporations did Mr. Hutchinson mention where these would be given?
1205. Hoyland: he said there would be one on the East coast, one in the middle West, and so on.
1206. Sapiro: did he say nothing about Beam Ray in connection with these other licenses?
1207. Hoyland: no.
Comparet questions Hoyland.
1208. Comparet: at your talk in New York with Gonin you say that Gonin raised certain technical questions that he wanted answered relating to the design of the machines and frequencies?
1209. Hoyland: not in respect to the frequencies as frequencies but in reference to the calibrations on his dials.
1210. Comparet: and you say that he was fully satisfied with your answers before he left?
1211. Hoyland: yes.
1212. Comparet: did he say that Blewett and Parsons were also satisfied?
1213. Hoyland: he didn't mention them.
1214. Comparet: and this all took place in the presence of Mr. Hutchinson?
1215. Hoyland: yes Sir.
1216. Comparet: at that conference didn't Gonin complain that they still had not been able to get from you the correct statement of the frequencies and that the royalty was far too high compared to the true cost of the machine?
1217. Hoyland: no, we came to an agreement on the royalty.
1218. Comparet: didn't he state that you had misrepresented the price of the price of the machines to him based on what the parts actually cost?
1219. Hoyland: no, he said that the machines could be built in England for $125.
1220. Comparet: I show you a letter from Mr. Blewett to yourself, you also produced in court plaintiffs exhibits number, 24 to 32 inclusive, many of which were letters signed Beam Ray by various persons, how did it happen that the company correspondence was in your possession?
1221. Hoyland: what letters are those, may I see them?
1222. Comparet: Comparet secured the letters. I show you Exhibit 25 signed for Beam Ray, also Exhibit 30 and 31 signed yours very truly Beam Ray Incorporated, 33, 34, 37,. How does it happen that all these company letters have been kept in your possession?
1223. Hoyland: these are letters that I sent to Dr. Parsons.
1224. Comparet: you stated that some of them were not signed by you.
1225. Hoyland: some are signed by Mr. Lyle, he gave them to me.
1226. Comparet: didn’t you think that the company should have these letters?
1227. Hoyland: the company had the copies of some of them.
1228. Comparet: you said that the reason why you didn't send the numerical frequencies to the British was that the understanding was that they were not to get them.
1229. Hoyland: that's right.
1230. Comparet: here is a letter signed by you saying, "We have the exact frequencies and you can get them on the dial quite easily, if you can't do this let me know and I will send them to you." Here is another letter dated November 10th , signed by Mr. Blewett and delivered personally by Dr. Gonin in New York, you saw that letter during the conference in New York?
1231. Hoyland: yes, I remember now having read that in New York.
1232. Comparet: I call your attention to the following in this letter "I told you in my last letter how disappointed we all were at the delays in receiving the machines and when they came they needed a complete overhaul, many joints were not soldered, then we could not check them properly. The two laboratory machines do not agree, one must be wrong. Which is wrong? In spite of my many letters etc., you people have refused to send the frequencies. We cannot use the machines. You promised us the frequencies in June but we are still waiting in August." What reply did you make to this, Mr. Hoyland?
1233. Hoyland: I don't remember.
1234. Comparet: as a matter of fact didn't you keep very silent about it?
1235. Judge Kelley: what was your position with reference with these demands; did you feel that they were entitled to them through the contract?
1236. Hoyland: I gave them what they had a right to have. I sent them the code long before this letter was received.
1237. Comparet: in this letter here, Mr. Blewett complains that they had been assured that $600 was the net cost for the clinical machines and that he had found that they were made almost entirely in standard parts and that these parts could be bought for much less in the United States. Wasn't Mr.Gonin still complaining that the correct cost figures had never been given him?
1238. Hoyland: I don't know.
1239. Comparet: Comparet then read from the letter in which Blewett said that "even in England they could buy the parts and assemble them for only a small part of what Beam Ray charged them and that they were terribly misinformed." Wasn't it discussed at the conference with Gonin in New York?
1240. Hoyland: no, he merely said that they could manufacture them for that price.
1241. Comparet: Comparet reading again from the letter, "why in spite of repeated requests have we not had the figures on the cost of machines?"
1242. Hoyland: they were sent to them.
1243. Comparet: wasn't that discussed in your New York conference?
1244. Hoyland: I don't think it was.
1245. Comparet: Comparet then read further, quoting the English to the effect that inspite of having spent thousands of dollars they still didn't get the frequencies and the machines still did not operate properly.
1246. Hoyland: Hoyland dodged the issue by going into a rambling monologue in which he said that they had discussed royalties and had lowered the figures to about $10 a machine as the British guaranteed to do the mass production of them.
Noon recess called.
Afternoon session June 28th .
Dr. Rife called to the stand.
Comparet interrogating. Witness identified as one of the owners of the Rife Ray invention and one of the shareholders in Beam Ray Corporation.
1247. Comparet: has the plaintiff ever informed you that the machines that he designed and built for Beam Ray were not operating on the same frequencies as your own?
1248. Rife: they were supposed to be operating on the same with harmonics.
1249. Comparet: did he ever tell you that there was a fundamental difference?
1250. Rife: he said on one or two occasions that there was a difference in harmonics.
Bertrand Comparet wrote some handwritten notes on the front and back of this page. The following three statements are what he wrote. (1251, 1252 and 1253)
1251. Shouldn't it be brought out that Hoyland concealed the fact that he had made a fundamental difference.
1252. It should be brought out that Hoyland did not tell the Dr. that Hoyland made a fundamental change in building his machine and that he did not tell the Dr. of that fundamental change. Frequencies had been altered. Harmonics can be changed even if the frequencies are exact and right. Harmonics are almost impossible to control.
1253. Dr. Rife discerned that there was a fundamental difference made in Hoyland's machine when he tested one out recently at his lab on Point Loma.
1254. Comparet: at the time the deal was pending for an agreement by which the owners were to license Beam Ray to manufacture and lease Rife Ray machines, did you take part in some of these talks as to what the terms of the agreement were to be?
1255. Rife: very little, I signed contracts that I presumed to be correct; it was my idea to leave the business part of it to the others as I had confidence in them.
1256. Comparet: who took part in these discussions?
1257. Rife: Mr. Hoyland, Mr. Hutchinson, I think Mr. Henderson and possibly one of two others whom I do not recall.
1258. Comparet: was anything said about other companies being granted licenses later?
1259. Rife: I do not recall anything.
1260. Comparet: what was your understanding of the license given to Beam Ray, were many other companies to be licensed or was Beam Ray to get an exclusive?
1261. Rife: I don't recall that any other company was to have it except the British.
1262. Judge Kelley: did you understand that Beam Ray was to get an exclusive license?
1263. Rife: that was my understanding.
1264. Comparet: you understood that Beam Ray was going to give a sublicense to the British having already a license from the owners?
1265. Rife: yes.
1266. Comparet: was it your understanding that the license given to Beam Ray by the owners was a worldwide exclusive license?
1267. Rife: I cannot recall that there was any actual statement made to that effect but I understood it to be so.
1268. Comparet: was that understanding based on conversations had with others concerning the granting of the license?
1269. Rife: yes it was.
Sapiro then took the witness.
1270. Sapiro: do you recall when you first started negotiations with anybody representing Beam Ray?
1271. Rife: I think about April or May of last year.
1272. Sapiro: did you ever give an option to Mr. Cullen?
1273. Rife: I did not.
1274. Sapiro: I show you a signed copy of an agreement made in New York on November 17th when Hutchinson and Hoyland went east to deal with the British. You will see that it is signed by Hutchinson for Hoyland and Rife, was this document ever presented to you for your approval since November 17th ?
1275. Rife: after reading it through carefully, it seems as though I have seen it before, the only time that I can recall that I might have seen it is when they came back from New York after the dealings with Dr. Gonin.
1276. Comparet: do you recall giving written approval to that document?
1277. Rife: I do not.
1278. Sapiro: you say that the devices that were being built in the early part of 1938, the one that went to Dr. Couche and two that were in the laboratory were built on new harmonics?
1279. Rife: they were built on a different principle, we have a given wave length and it can be produced in different ways, but it should be the same no matter how it is produced.
1280. Sapiro: you knew that these three machines were being built with that machine?
1281. Rife: yes.
1282. Judge Kelley: what is your profession?
1283. Rife: I am a scientist engaged in research work, pathological and bacteriological science. Dr. Rife then gave a history of his studies and work.
1284. Judge Kelley: have you had any business experience at all?
1285. Rife: no.
1286. Judge Kelley: you don't like business at all?
1287. Rife: no.
1288. Judge Kelley: what is the difference between frequency and harmonics?
1289. Rife: frequency is an actual wavelength (said something about harmonics that I, Marian, didn't get).
1290. Judge Kelley: when you constructed this Beam Ray machine you had a dial representing the frequencies or harmonics?
1291. Rife: we had many dials on the original machine.
1292. Judge Kelley: is that the machine Mr. Hoyland got the frequencies from?
1293. Rife: yes, he took them off that old machine. (Notes because Marian could not follow in all detail).
1294. Judge Kelley: Some questioning by Judge Kelley concerned with the scientific side of the case.
1295. Rife: Dr. Rife explained how the machine changed in design from the original to the most recent type.
1296. Judge Kelley: wanted to know whether Hoyland had told Dr. Rife about the changes he was making and Rife said that he did.
1297. Judge Kelley: then asked about the frequencies and Dr. Rife explained.
1298. Judge Kelley: did you examine the machines built by Hoyland for the British?
1299. Rife: no.
1300. Judge Kelley: you didn't know if they differed from the earlier machine?
1301. Rife: I did not.
1302. Judge Kelley: when you perfected this instrument you thought about an organization to manufacture and distribute these machines?
1303. Rife: I want to get them out to the public, as many as I could.
1304. Judge Kelley: how did you happen to get in touch with Mr. Hutchinson?
1305. Rife: Mr. Cullen had him over at the laboratory just as a social call.
1306. Judge Kelley: Mr. Hutchinson was introduced to you by Mr. Cullen then?
1307. Rife: yes.
1308. Judge Kelley: is Mr. Cullen a business man?
1309. Rife: he is an engineer.
1310. Judge Kelley: when did you first meet Hoyland?
1311. Rife: Dr. Milbank Johnson brought him to the laboratory as an electrical engineer.
1312. Judge Kelley: did you discuss the production of this instrument with Hutchinson and Hoyland, together I mean?
1313. Rife: to some extent.
1314. Judge Kelley: you had confidence in them?
1315. Rife: yes.
1316. Judge Kelley: you assigned certain of your interests to others?
1317. Rife: to Hoyland and Hutchinson for the purpose of carrying on the work.
1318. Judge Kelley: did they outline their plans for distributing the instrument?
1319. Rife: yes to some extent.
1320. Judge Kelley: what was their plan?
1321. Rife: to start on a small scale and increase production, and that the British would take it over for England; that is the British Empire.
1322. Judge Kelley: when you assigned your interests to these gentlemen were there any others concerned with the machine?
1323. Rife: no.
1324. Judge Kelley: you associated yourself with them to save yourself the fatigue of the business end of the work?
1325. Rife: yes.
1326. Judge Kelley: did you ever receive any information from anybody as to the British instruments being effective in any manner?
1327. Rife: I had one letter from Mr. Blewett, saying the instruments were not working and that he did not know if it was because they had been damaged in transit.
1328. Judge Kelley: when you got this letter did you discuss this matter with anyone?
1329. Rife: yes, with Mr. Hoyland, and he said that he had checked the machine carefully.
1330. Judge Kelley: did he tell you of any changes made in the machines before he shipped them?
1331. Rife: he did not.
1332. Judge Kelley: would these machines be easily injured in shipment?
1333. Rife: they might be.
1334. Judge Kelley: did you supervise the packing or shipping of these instruments?
1335. Rife: no.
1336. Judge Kelley: who did?
1337. Rife: I think Mr. Hoyland did.
1338. Judge Kelley: who advised about making an organization?
1339. Rife: I think that was when Hutchinson and Henderson came into the discussions.
1340. Judge Kelley: what was said about exclusive rights to the machine?
1341. Rife: as I understand it the three owners, Hutchinson, Hoyland and myself gave to this organization the rights to manufacture these machines and I thought it was an exclusive right.
1342. Judge Kelley: was anything ever said about the owners reserving any rights to be given to any other Corporation?
1343. Rife: I don't think so.
1344. Judge Kelley: what about foreign countries?
1345. Rife: I don't know what arrangements were to be made in that respect.
1346. Judge Kelley: did you understand that this license was to be given by Beam Ray or by the owners?
1347. Rife: by Beam Ray.
1348. Judge Kelley: you understood that Beam Ray had exclusive rights to give a license and that the owners had reserved nothing except royalties?
1349. Rife: yes.
1350. Judge Kelley: I suppose you avoided business discussions as much as possible?
1351. Rife: yes I did.
1352. Judge Kelley: a very fortunate man.
Sapiro takes the witness.
1353. Sapiro: Sapiro quoted from a document to the effect that the owners of the Rife Ray machine must approve the price of the machines and the distributions of the profits, is that correct Mr. Rife?
1354. Rife: yes that's right.
1355. Sapiro: Mr. Hoyland had been working for you for some time before you met Mr. Hutchinson?
1356. Rife: yes.
1357. Sapiro: did Henderson and Hutchinson discuss with you the forming of a new Corporation?
1358. Rife: I understood that there was already a Corporation that could be shifted over into the Beam Ray Corporation in order to save expenses.
1359. Sapiro: did they say they would give you some stock in this Corporation if you made an agreement with them?
1360. Rife: I am not sure that they did.
1361. Sapiro: did you receive a certificate saying you were the owner of some stock?
1362. Rife: I received a small paper from Mr. Fickerson.
1363. Sapiro: was this in return for giving up certain rights to the Beam Ray machine?
1364. Rife: I don't think so.
1365. Sapiro: why do you think you received it?
1366. Rife: it was supposed to be given to me.
1367. Sapiro: given for what?
1368. Rife: that I don't remember, it was merely that I was to receive certain stock, I don't think I have looked at it since.
1369. Sapiro: did you expect to receive it?
1370. Rife: it didn't enter my mind; I never gave it any thought.
Judge Kelley interrupting.
1371. Judge Kelley: I don't believe there was any thought in the Dr.'s mind as to money or stock I don't think he cared what he got, or whether he got anything, he seemed to have been interested only in the production of his machine and of getting them out where they could do some good.
1372. Sapiro: was there any arrangement under which someone was to send you some shares of stock receipt for some?
1373. Rife: no arrangement, only what might have been said.
1374. Sapiro: by whom?
1375. Rife: by the group, possibly Mr. Hutchinson.
1376. Sapiro: do you recall what was said, anything at all?
1377. Rife: I do not.
1378. Sapiro: I show you a copy of an application for transfer of shares subject to escrow, do you recall signing that Dr. Rife?
1379. Rife: well I signed several where I had a line up similar to that.
1380. Sapiro: do you recall this particular one?
1381. Rife: (after reading it through very deliberately) the only thing that is at all familiar is this (pointing to signatures on the document).
1382. Sapiro: do you recall anyone bringing such a document to you to sign?
1383. Rife: this I recall was signed in Mr. Hutchinson's office, I was called in to sign it and I did.
Dr. Rife was excused from the stand.
Edwards was called to the stand.
Wednesday, June 28 afternoon session.
1384. Comparet: Did Mr. Hoyland tell you at any time in the fall of last year that the machines he was manufacturing for Beam Ray Corporation operated on a principle fundamentally different from Dr. Rife's machine?
1385. Edwards: no, Mr. Hoyland told me at one time that Dr. Rife thought that he had the frequencies but he didn't have them.
1386. Comparet: do you recall last December when the Corporation received from the solicitors for the British group a draft for a contract licensing the British to manufacture machines?
1387. Edwards: yes.
1388. Comparet: at that time you were Secretary of the Corporation and you and Mr. Winters had been made the executive committee for the company?
1389. Edwards: yes.
1390. Comparet: did you discuss with Mr. Hoyland that question of whether the contract should be signed and sent back to the British?
1391. Edwards: yes, when I received it I called Hutchinson and Hoyland and told them that it had arrived. They both had access to this paper I gave a copy to Mr. Hutchinson.
1392. Comparet: did the executive committee have in their possession a description of the principles of the Rife Ray machine, or did they know the frequencies at which the machine would be set?
1393. Edwards: no.
1394. Comparet: you had no way of finding out through Mr. Hoyland?
1395. Edwards: yes I asked Mr. Hoyland if we shouldn't sign this and send it back, but Mr. Hoyland would not approve of it because the British wanted to have the frequencies. At this time the British owed $5000.
1396. Comparet: did you try to get Mr. Hoyland to give the frequencies to the British?
1397. Edwards: yes, I did, but he said that they already had them, and he wasn't going to give them to them again. I said if they have them what harm is there in giving them to them again.
1398. Judge Kelley: Did you know for a certainty that the British had the frequencies?
1399. Edwards: only that Mr. Hoyland told me so.
1400. Comparet: did you know that there had been considerable correspondence from the British concerning their wish to have the frequencies and that Mr. Hoyland had these letters in his possession?
1401. Edwards: yes.
1402. Comparet: following that discussion with Hoyland was there a cable sent to the British in regards to the proposed contract which you have there in your hand?
1403. Edwards: yes.
1404. Comparet: who drafted that cable?
1405. Edwards: Mr. Sapiro.
1406. Comparet: have you a copy of it?
1407. Edwards: yes, I think I have a proposed draft (he produced it).
1408. Comparet: you yourself didn't choose the working of this?
1409. Edwards: it was drafted following the meeting of the board of directors which Mr. Sapiro attended. There was a resolution to the effect that it should be sent in that form.
1410. Comparet: consulted the minutes and found a record of the resolution in minutes of January 10, 1939. Comparet showed cablegram from Gonin to Beam Ray to the effect that Hoyland's cable had been received but that the British would recognize the Corporation only in their dealings. He quoted from another cable January 15, 1939. "You have broken original agreement, refuse to sign the revised agreement and have ignored Gonin’s cable." It went on to say that the machines would be returned and that the British would expect to have their money refunded. Comparet showed a cable sent in answer to this one which Edwards said he got from Hoyland, to the effect that it was the British who had broken the agreement etc.
1411. Comparet: from whom did you get this information?
1412. Edwards: from Mr. Sapiro.
1413. Comparet: did you know at that time that the British had never been sent the actual numerical frequencies?
1414. Edwards: no, Mr. Hoyland had told me in many different conversations that they did have them.
1415. Comparet: did the directors ever ask Mr. Hoyland by the Corporation with a list of frequencies?
1416. Edwards: yes.
1417. Comparet: what reply did he make?
1418. Edwards: we asked him several times and he refused. I even asked Mr. Hutchinson if he would give them to us, and put them in trust, and I asked Mr. Hoyland what he would do in the event of his death.
1419. Judge Kelley: did you or the directors try to get the frequencies from Dr. Rife?
1420. Edwards: I didn't know that we could, but since then I have gotten them from Dr. Rife. When I asked Mr. Hutchinson to resign he said that he would resign if Mr. Hoyland would give the Corporation the correct frequencies. Hoyland gave me a sealed letter supposedly containing the frequencies. As soon as I got this Hutchinson, Mrs. William and Mr. Cullen resigned.
1421. Judge Kelley: what finally happened to that sealed envelope?
1422. Edwards: Mr. Hoyland came over to my house with Mr. Kahn and asked me for the two envelopes, I gave them both to Mr. Hoyland and I have never seen them since. One was to his lawyer and was to be delivered in the case of his death. I never saw the contents of either envelope.
1423. Judge Kelley: after Hoyland was dismissed as technical advisor was the company able to carry on?
1424. Edwards: no.
1425. Judge Kelley: who had been working under Hoyland?
1426. Edwards: Mr. Carson, I asked Mr. Carson to work for us, but he said he could not betray Mr. Hoyland confidence, I told him that he could get the frequencies from Dr. Rife, he said he wanted to think it over, and later he called me up and said that he could not go along with us.
1427. Judge Kelley: as these machines were built were they tested by an oscillograph to see if they were correctly adjusted?
1428. Edwards: yes.
1429. Judge Kelley: who had paid for the parts that went into the oscillograph?
1430. Edwards: I understand that Mr. Hoyland supplied the parts and the company paid for the labor.
1431. Judge Kelley: what happened to it after Hoyland left?
1432. Edwards: it went with Hoyland.
1433. Judge Kelley: and the company could not check up on the machines without it?
1434. Edwards: no.
1435. Judge Kelley: how long was it before the company could get a new one and train a man to operate it?
1436. Edwards: about two months.
1437. Judge Kelley: and during that time nothing could be done with about the machines?
1438. Edwards: that's right.
1439. Judge Kelley: is this machine patented?
1440. Edwards: no.
1441. Sapiro: your honor the machines cannot be patented as the theory has been known too long.
1442. Judge Kelley: can the frequencies be patented?
1443. Edwards: no.
1444. Judge Kelley: then anyone could manufacture the machine and make it work?
1445. Edwards: yes if they knew the frequencies.
Edwards resumed the stand.
1446. Sapiro: I show you plaintiffs Exhibit 25. Have you ever seen it before?
1447. Edwards: no:
1448. Sapiro: were you present at a meeting of the board of directors October 3?
1449. Edwards: yes.
1450. Sapiro: you remember a resolution which required Mr. Hoyland to write this letter?
1451. Edwards: yes.
1452. Sapiro: isn't that the letter which was submitted to the directors in accordance with resolution?
1453. Edwards: I don't remember reading that letter.
1454. Sapiro: did you ever inquire as to whether or not that letter had been written and sent?
1455. Edwards: I don't remember.
1456. Sapiro: were the minutes of that meeting read at the next meeting?
1457. Edwards: yes.
1458. Sapiro: did you ask you this letter had been written?
1459. Edwards: I presumed that Mr. Hoyland would write it. I honestly do not remember reading the letter.
1460. Sapiro: will you read it and see if it refreshes your memory?
1461. Edwards: after reading the letter, I still do not remember reading it.
1462. Sapiro: and you mean that you never inquired about the letter?
1463. Edwards: I don't think I did, at that time Mr. Hoyland and myself were on very friendly terms, and I had no reason to question him about.
1464. Sapiro: you say you have not seen that letter?
1465. Edwards: I don't remember seen it.
1466. Sapiro: will you look in your records and see if there is not a copy of that same letter with certain initials on it, including your own?
1467. Edwards: shall I look now?
1468. Sapiro: no later. Didn't you turn over to Mr. Hoyland the letter and the cable from the British and ask him to take the matter up?
1469. Edwards: yes.
1470. Sapiro: and didn't you and Mr. Hoyland and I go over the matter in your court room, and weren't we all in accord that the British were trying to stall for time?
1471. Edwards: yes.
1472. Sapiro: did you also turn over to Mr. Hoyland the wires that you received in December?
1473. Edwards: most of them were telephone down to me, and then Mr. Hoyland picked them up at the telegraph office.
1474. Sapiro: did you make copies?
1475. Edwards: yes, I saw that Mr. Hutchinson got one and I gave one to you.
1476. Sapiro: didn't we have a free and full discussion of matters regarding the Corporation and the British at our meeting, and didn't you ask me to draw up a cablegram to the British?
1477. Edwards: yes we agreed on that.
1478. Sapiro: wasn't there accord on the board [board of directors] to the effect that what we put in the cablegram was correct and should be sent to the British?
1479. Edwards: after Mr. Sapiro came down and talked to us about this we felt that we had complied. We had not had any legal advice until then.
1480. Sapiro: didn't every one of us feel that the Corporation had complied?
1481. Edwards: yes, at that time we did.
1482. Sapiro: didn't everyone there say that the Corporation had complied up to date?
1483. Edwards: I don't recall anyone making objection.
1484. Sapiro: do you remember my asking if anyone present knew of any breach of contract and that no one said anything?
1485. Edwards: yes, but there was a man or of the frequencies.
1486. Sapiro: didn't occur in my presence did it?
1487. Edwards: I don't know.
1488. Sapiro: you knew that you could get the frequencies from Dr. Rife did you?
1489. Edwards: well, I assumed that Dr. Rife had them, but I never asked them for them.
1490. Sapiro: you knew that he had worked them out for his machine?
1491. Edwards: I assumed that he had, and found out since that he did.
1492. Sapiro: you say that you had two envelopes from Mr. Hoyland, one for the lawyer and one with the frequencies.
1493. Edwards: yes.
1494. Sapiro: was there a lawyer's name on one?
1495. Edwards: yes, Mr. Clen (?).
1496. Sapiro: you wouldn't want to indicate that it was my name?
1497. Edwards: no.
1498. Sapiro: how did you find out that the oscillograph was owned half by Hoyland and half by the Corporation?
1499. Edwards: there was a note about it.
1500. Sapiro: did you ever ask Mr. Hoyland about the oscillograph?
1501. Edwards: no, I don't think I did.
1502. Sapiro: at the meeting of January 10, of this year was there a plan presented for trying to get everybody together?
1503. Edwards: yes.
1504. Sapiro: did all of them favor the plan?
1505. Edwards: we expressed ourselves in favor of presenting the plan.
1506. Sapiro: what is the location of the Corporation offices?
1507. Edwards: between Washington and University on fifth Street.
1508. Sapiro: is that both the factory and the headquarters?
1509. Edwards: yes.
1510. Sapiro: has there been any change in the officers?
1511. Edwards: no.
Comparet took the witness.
1512. Comparet: going back to the meeting of January 10, from what did you get the idea that the company had complied with the wishes of the British, was it from what Mr. Sapiro told you?
1513. Edwards: yes.
1514. Comparet: who presented the plan to avoid litigation?
1515. Edwards: Mr. Sapiro.
1516. Comparet: of what did the plan consist, was it a plan whereby Mr. Hutchinson was told that he would have to give up his interest in the company?
1517. Edwards: yes, I believe that he was left out in that plan.
1518. Comparet: was it further suggested that if he did not agree that a number of lawsuits would be started against him?
1519. Edwards: yes, Mr. Sapiro suggested that.
1520. Comparet: and what was said about that?
1521. Edwards: the plan was that I should file a suit and the Ernstein should file one, and Mr. Reynolds should have an investigation of the Corporation set up and Mr. Hoyland was going to file a law suit himself.
1522. Comparet: and what else?
1523. Edwards: I think that was all.
1524. Comparet: and by means of all these law suits you were going to avoid litigation?
1525. Edwards: I guess so.
1526. Comparet: wasn't Mr. Hutchinson expected to give up his interest in the Rife Ray machine?
1527. Edwards: yes, that has been the whole trouble.
1528. Judge Kelley: Mr. Comparet have the British received the frequencies or have they not?
1529. Comparet: they have not.
1530. Judge Kelley: how do you expect that?
1531. Comparet: Mr. Hoyland admits that in one letter he said that he gave them to them but that he never actually did.
1532. Judge Kelley: have you gotten the correspondence files of the British group?
1533. Comparet: I have not been able to get them.
1534. Judge Kelley: I would like to know what there is in the Corporation that is worth fighting over, since the machines could not be patented?
1535. Comparet: well the frequencies are still secret.
1536. Sapiro: then said that the machines coming from Dr. Rife would have a very great value because of the doctor’s reputation and his long record of work.
1537. Judge Kelley: assuming that this machine is a great boon to humanity what actually has the Corporation got? I am not talking about the instrument. I want to know what good will exist. It doesn't look to me as if there is any. You say that the British could build the machines and that you couldn't stop them.
1538. Sapiro: that's right, we couldn't stop them.
1539. Comparet: I think they could be stopped.
1540. Judge Kelley: I am wondering why we should have such a tremendous lawsuit here, there seems to be no basis for it, well go on, finish it, you started it.
1541. Comparet: I show you Mr. Edwards, a document headed, proposal to C.R Hutchinson January 11th, 1939. That he surrender all his interest in the Corporation and in the machine. Is that the plan that was presented at that time?
1542. Edwards: yes.
1543. Comparet: who drew up that plan?
1544. Edwards: I think this was drawn up by Mr. Sapiro, in Mr. Gordon Gray's office.
1545. Comparet: I note that the first thing stipulated is that he surrender to the Corporation all his rights in the machine as the owner or otherwise, also that he surrender all rights in the stock in Beam Ray no matter in whose name the stock may stand. Did Mr. Hutchinson agree to be so frozen out of the company?
1546. Edwards: no.
1547. Comparet: so then the plan didn't prevent litigation?
1548. Edwards: no.
1549. Comparet: when this plan was discussed did they specify and expect that this would intimidate?
1550. Edwards: yes.
1551. Comparet: what was said and by whom?
1552. Edwards: as I remember it Mr. Sapiro said that if Mr. Hutchinson got all of these lawsuits slapped on him at about the same time that he would just want to run.
1553. Comparet: now going back to your assumption that Dr. Rife knew the frequencies, had Mr. Hoyland ever told you that Dr. Rife knew them?
1554. Edwards: no, he told me that Dr. Rife only thought he had them.
1555. Comparet: what did you think that meant?
1556. Edwards: well, Mr. Hoyland told me about that time, that Dr. Rife measured the frequencies only by the length of the wire and that he did not take other factors into consideration.
1557. Comparet: were the letters from the British mailed to the shop?
1558. Edwards: yes, after Mr. Hoyland left we had a post office box.
1559. Comparet: why.
1560. Edwards: so that the board of directors could get all of the mail.
1561. Comparet: before this had you found it hard to get the mail?
1562. Edwards: yes, it was taken up to the shop and we wouldn't know what was going on.
Sapiro then took the witness.
1563. Sapiro: I show you plaintiffs Exhibit 11 and I ask you if there was anything said about litigation that was not sent to all the members later?
1564. Edwards: I think there were some things said.
1565. Sapiro: were you certain in saying that I suggested that by bringing all these suits I expected litigation?
1566. Comparet: Comparet objected and Judge Kelley sustained him.
1567. Sapiro: did you say that I said so?
1568. Edwards: I didn't say that, I was referring to the proposal to Hutchinson.
1569. Sapiro: did you and the board think that this was the right thing to do?
1570. Edwards: at that time I did.
1571. Sapiro: was it not planned at that meeting that Mr. Gray should see Mr. Hutchinson and offer him a cash settlement in return for his rights?
1572. Edwards: yes there was supposed to be a consideration.
1573. Sapiro: was Mr. Williams present at that meeting.
1574. Edwards: yes.
1575. Sapiro: do you recall that he was very favorable to Mr. Hutchinson?
1576. Edwards: yes.
1577. Sapiro: do you remember any statement to the effect of what would happen if the suits were started against Hutchinson?
1578. Edwards: no.
1579. Sapiro: was there anything that I suggested with which you were in disagreement?
1580. Edwards: no, at that time we were perfectly in accord all the way down the line.
1581. Sapiro: you state that you based your opinion of the British question on what I said.
1582. Edwards: yes, as soon as I knew the British had the frequencies I felt that the company had complied with the terms of the contract.
1583. Sapiro: in answer to the suit filed against the Corporation by the British has your board of directors taken any action to authorize counsel what to do?
1584. Edwards: no.
1585. Sapiro: did they authorize counsel to file action against Hoyland as a cross complaint against the suit brought by the British?
1586. Comparet: Comparet objected; there was much bickering and Judge Kelley adjourned until Thursday.
Thursday, June 29th.
Hutchinson on the stand.
1587. Comparet: what is your occupation?
1588. Hutchinson: for the past six or eight months I have been making an investigation into the conditions of the Beam Ray Corporation.
1589. Comparet: were you one of the original incorporators of the company which is now known as Beam Ray?
1590. Hutchinson: I was.
1591. Comparet: trace the changes in the name of the Corporation. Then Hutchinson commenced involved explanation which Comparet interrupted. Can you just trace the development of the company into Beam Ray in your own words?
1592. Hutchinson: about October of 1935 Mr. Cullen came to me with a contract for the organization of a correspondence school of Aeronautics, and asked me to either join him or advise him how he could put over and operate this school. At that time I was associated with Roscoe Turner in connection with an aero device. I was also associated with Amelia Earhart. I discussed this with them after many meetings. Mr.? stated that he was willing to go along as our legal advisor if I would accept the active management. We closed a contract for five Western states for sales rights. We formed a California Corporation through Fickerson of Los Angeles. He was our attorney and handled the legal details. The organization consisted of Olmstead, Cullen and myself. That Corporation was known as Aero Reserve School Western division. The necessary permits were taken out and I made a trip east and contacted the then Virginia Corporation Aero Reserve School officers. I secured for Cullen, an additional contract showing and advising the Virginia Corporation officials that it was to the best interest of all that the sales organization from the West coast, if divided up, would be better if the additional six Western states were included. They gave such a contract. Before I go any further your honor, and in order to establish a vital point I am waiving my constitutional rights and offer my evidence without reservation. In order that I may set right for your honor's benefit things that have been brought out in this court I would like to have exhibit "Z" of the defendants and the minute books of the Corporation to refer to certain items that will verify statements that I will make.
1593. Comparet: I show you exhibit "Z" which is an application for a permit to transfer stock and I show the minute book of the Corporation.
1594. Hutchinson: under exhibit "Z" acting under authority of the meeting of August 21st, 1936 in application for the permit on page 4, paragraph 9, reads as follows. He quotes to the effect that C. R. Hutchinson paid all fees etc. referring to the meeting of the board of Aero Corporation November 2nd, 1936, paragraph 5, "the secretary presented the itemized count of Fickerson and Richardson, attorneys for the company covering legal costs of the organization and franchise taxes for 1935 and 1936 as follows, an account with Fickerson and Richardson to services $150, to costs secretary of state filing articles $29.18, State Treasurer franchise tax $25, minutes book $5, sale $5.50, County clerk $1 commission Corporation application $15. State Treasurer Franchise tax 1936 $27.45, title $258.13, credits November 26th, by check $120, August 19th, $110.65, September 4th by check $27.45, total credits $250. On motion duly made and seconded this account was approved and the secretary was instructed to set this amount to the credit of C. R. Hutchinson on the books of the Corporation to be paid when funds are available. In my statements to follow I will refer to these as they refer particularly to the set up of the Corporation securities charter.
1595. Judge Kelley: Dr. Rife was not interested in any of this Aero Corporation. He designed a machine and he assigned certain interests in it to certain people. How was this divided?
1596. Hutchinson: one third to me, one third to Hoyland, one third to Dr. Rife.
1597. Judge Kelley: and the forming of the Corporation followed?
1598. Hutchinson: yes.
1599. Sapiro: the Corporation was in existence and the name was changed?
1600. Judge Kelley: when you incorporated you first had a permit from the Corporation Commission to issue three shares of stock, one each to Cullen, Olmstead and Hutchinson?
1601. Hutchinson: yes.
1602. Judge Kelley: then you procured a permit for the issuance of 4496 shares of stock which brought it to 5000 shares altogether and these were issued to whom and in what proportion?
1603. Hutchinson: I prefer to consult the minute book to be accurate.
1604. Sapiro: Sapiro read the division of stock and Hutchinson confirmed it by the minutes.
1605. Judge Kelley: let me see the defense exhibit "Z".
1606. Comparet: were you three, Olmstead, Cullen and yourself holders of all stock in the Corporation?
1607. Hutchinson: we were.
1608. Comparet: there were no other stockholders?
1609. Hutchinson: no.
1610. Judge Kelley: was there ever any modification to this permit or is this the last permit issued exactly as it now stands?
1611. Hutchinson: yes.
1612. Judge Kelley: where is it?
1613. Comparet: do you refer to the permit to transfer shares to various other persons from you three original stockholders?
1614. Judge Kelley: yes.
1615. Comparet: I show you an application to transfer shares subject to escrow.
1616. Judge Kelley: I am not concerned about the application, what I want to know is what the Corporation commission did. To Sapiro; do you admit that the application was granted?
1617. Sapiro: oh, yes.
1618. Judge Kelley: have you a copy or the original permit that was issued in response to this application?
1619. Comparet: Comparet produced one. It was a modification of the document asked for.
1620. Judge Kelley: now I think we have a record of the permits of the Corporation commission.
1621. Comparet: I show you defendant's exhibit being an order of commission for transfer of shares.
1622. Hutchinson: in the original application there is a request included in it for the transfer from me to R. C. Bertol, of 100 shares. He was president of the organization before the transfer could be filed. He died and the Corporation Commissioner on presentation of that statement to him by our attorney, allowed it to stay in my name for the affairs of the estate. That was not transferred to them but belong to the estate of Dr. Bertol.
1623. Judge Kelley: what did you understand that you own when Dr. Rife conveyed it to you?
1624. Hutchinson: we had the rights to a machine reported to be used for the benefit of sick people. It was not patented. It was worked out by Dr. Rife in his laboratory, over a long period of years. He had been able to find the frequencies which he states will give relief in various diseases.
1625. Judge Kelley: the important part of this research was the discovery of these frequencies?
1626. Hutchinson: he has microscopes which have gone far beyond any others.
1627. Judge Kelley: did you have an interest in the microscopes?
1628. Hutchinson: no.
1629. Judge Kelley: was Dr. Rife working for you?
1630. Hutchinson: no.
1631. Judge Kelley: what did you have?
1632. Hutchinson: the possession of the frequencies through Dr. Rife and Hoyland.
1633. Judge Kelley: did they give them to you?
1634. Hutchinson: they promised to give them to the company.
1635. Judge Kelley: I am talking about you. What did you think you were buying?
1636. Hutchinson: nothing.
1637. Judge Kelley: but you thought you had something valuable?
1638. Hutchinson: yes.
1639. Judge Kelley: it wasn’t exclusive or protected in any way?
1640. Hutchinson: no.
1641. Judge Kelley: but whatever it was you had, you transferred it to the Corporation?
1642. Hutchinson: yes.
1643. Judge Kelley: but you don't know what it is?
1644. Hutchinson: no, I wish I did.
1645. Comparet: an application was made for a permit to transfer shares to various persons named in the application. Edwards, Hoyland etc. and you got the order authorizing it. Were these transfers made?
1646. Hutchinson: they were.
1647. Comparet: they charge that the contract was transferred from Beam Ray to this Nevada Corporation and you received consideration, did this happen?
1648. Hutchinson: no.
1649. Comparet: how did the Corporation and the Rife Ray invention get together?
1650. Hutchinson: about April 1st, 1938, Mr. Cullen came to me and told me about the extensive work being done by Dr. Rife with the machine and wanted us to take it over and put it on the market. I declined. He made an appointment with Dr. Rife, took me to the laboratory and we discussed it with Rife. Cullen suggested to him that this machine be put on the market and that I organize a group to put it over. Dr. Rife, at that time, said that if Cullen would benefit by it as a friend of 25 years standing he would be glad to do it. About a week later Mr. Henderson brought Hoyland to the office. Henderson said that the machine was very valuable to humanity. He insisted as one of our Aero School group that it be taken on as part of our activities. I refused. Henderson told of the benefit received from the machine by his wife and I agreed to go to the laboratory again with them, and with the balance of our associates, and give them the benefit of such experience as I had previously had in order that they might put it over. A few days later Henderson and Hoyland advised me that there would be a meeting at Rife's laboratory that evening to discuss this plan, or any plan that I might propose or suggest to them. Present at that meeting were Dr. Rife, Hoyland, Dr. Couche, Mr. Winter, Mr. Cullen and possibly one or two others and myself. After much talk about the machine itself I was asked how it would be put on the market and also if I would be interested in the organization of a group to do it. I positively stated at that meeting that I was not interested in this promotion.
1651. Comparet: I think we are taking too much time for these details. After some of these meetings did you finally agreed to work with them?
1652. Hutchinson: at that meeting I outlined the ideas of the Corporation which we now have and I suggested that they get an Angel to provide finance for their organization.
1653. Judge Kelley: I see. So they went out and started looking for Angels?
1654. Comparet: your honor no doubt understands the theoretical term Angel?
1655. Judge Kelley: oh, yes, I know all about Angels, spiritually and otherwise.
Court is now recessed.
June 29ty, 1939 court resumed.
1656. Judge Kelley: gentlemen, is it your understanding that anyone with a knowledge of science could take this finished product, this instrument that Dr. Rife designed and by examination and tests without any information supplied could ascertain these frequencies. Do you know whether this could be done? Mr. Sapiro, you're pretty wise?
1657. Sapiro: I seem to detect a bar in that remark, my interest in this is naturally for Mr. Hoyland. He says that anyone who reads the numbers on the dial and then sees the band and the code letters can tell these specific frequencies.
1658. Judge Kelley: but suppose someone should break a band, would there be any way that a scientist could figure out these frequencies?
1659. Sapiro: I don't understand?
1660. Judge Kelley: could anyone without the dial and the code discover the frequencies of the machine?
1661. Sapiro: they could discover what the frequencies of the machine were. The whole secret of the machines was the frequencies.
1662. Judge Kelley: was the great secret the frequencies that would heal a certain disease?
1663. Comparet: yes.
1664. Hoyland: each disease has its own particular frequency.
1665. Judge Kelley: then what was it that these people wanted to guard so fiercely?
1666. Sapiro: Sapiro then explained rather vaguely about the bands of frequencies.
1667. Judge Kelley: could anyone do it?
1668. Sapiro: no, a person who has not the key to these dials and bands could not make the machine work properly.
1669. Judge Kelley: but anyone could duplicate the machine itself?
1670. Comparet: yes.
1671. Judge Kelley: the Corporation had no exclusive right to make these machines?
1672. Sapiro: no.
1673. Judge Kelley: the only secret then was regarding the frequencies since anyone could have copied the machine.
1674. Comparet: anyone copying it would have to experiment until they found the right frequencies.
1675. Judge Kelley: apparently several people have and know these frequencies, Hoyland, Rife, and Carson and how many of the British have it?
1676. Sapiro: at least three, Parsons, Gonin and Blewett.
1677. Judge Kelley: it doesn't look to me as if we are fighting over very much here, but go ahead get on with it.
1678. Comparet: there is nothing over except that the plaintiff asked the receivership to do this, to cancel the old contract with the owners and to negotiate for some new contract with the British.
1679. Judge Kelley: you understand that the receiver would have the right to demand and receive the code for the frequencies?
1680. Comparet: would the receiver have a greater right than the company?
1681. Sapiro: yes, they certainly would.
1682. Judge Kelley: then the receiver would have the secret. Well go on, if you want to litigate it proceed, but I have been sitting here trying to find out what this is all about, apparently the only secret is what the frequencies are. I want to know if any test can be given the machine that will reveal the secret. It seems to me you might as well try to sell the moonlight two lovers, or an earthquake to destroy your enemies. I must find out the importance of the product to the stockholders. I can understand that a trade name has value but it does not seem to have gone that far.
1683. Sapiro: Dr. Rife's name is valuable.
1684. Judge Kelley: well, all you would have to do is dig up another fellow named Rife.
1685. Sapiro: I think that could be stopped.
1686. Hutchinson: I think I can clarify this question.
1687. Comparet wrote on this page of the trial transcript this statement: "Roy, note your position. Also note what Judge Kelley is trying to find out.”
1688. Judge Kelley: I'm not at all sure that you can, but go ahead; you have my permission to try.
1689. Hutchinson: there are about 40 frequencies discovered by Dr. Rife that have not yet been released to the public, and have not been included in the machine. Even if there are other machines the company would still have a tremendous advantage in that they have research to prove that Dr. Rife is still bringing out new frequencies.
1690. Comparet wrote on this page of the trial transcript the following: "Judge Kelley wants to know what value the company has or what tangible value the machine has that the company can get its teeth into. So far it has nothing."
1691. Judge Kelley: do you think the company has a claim on all further discoveries of Dr. Rife along this line?
1692. Hutchinson: I think our contract with Dr. Rife said so.
1693. Judge Kelley: let me see that contract (after reading it) I don't see that you have any claim on the ingenious Dr. Rife's future experiments and discoveries.
1694. Comparet: at that conference at the laboratory you said that you gave those present there some explanation of a plan to market the machine?
1695. Hutchinson: yes, I suggested that Dr. Rife and those he desired to give an interest to have an agreement among themselves and secure a group interested in putting this instrument on the market, and that they form a California Corporation similar to the Corporation that we had used, that is, that United Polytechnique Institute. And that they figure out the proportional parts that each of the group would be entitled to and make an application to the Corporation commission, as we had done and operate under that plan. And that they secure in their group or through it someone that would secure the money to make it possible to build the necessary machines to operate a small business. I offered to give them the benefit of our organizing experience in getting it in motion and any advice that I could give.
1696. Judge Kelley: did you understand that Dr. Rife bound himself to keep the frequencies secret from anyone?
1697. Hutchinson: I understood him well enough to know that when he said he would put his information in the hands of the right people he would do so.
1698. Judge Kelley: you knew that he was interested primarily in humanity and the benefit his machines could give to the sick and that if he felt that humanity needed it he would give the information to anyone who would help him in his good work?
1699. Hutchinson: I guess so.
1700. Comparet: was the decision finally reached to take over the United Polytechnique Institute Corporation to be used as a Corporation to release the machines?
1701. Hutchinson: later, when Mr. Gordon Gray, representative of Mr. Rife, this was decided upon.
1702. Comparet: what was the final agreement in this regard?
1703. Hutchinson: when Rife, Hoyland, Henderson and one or two others came into the office and they asked me to organize they stated that speed was necessary, because the English group were expected soon. Within a few weeks. And that quick action was wanted, and that none of them had had any experience in organization or any business ability. They asked what was the quickest way we could get the machines on the market and be prepared to deal with the British and get the million dollars that the British were supposed to pay.
1704. Comparet wrote on this page of the trial transcript this statement regarding what Hutchinson had said: "this is terrible, but it's the way Hutchinson said it, only worse."
1705. Judge Kelley: where did you hear about the million dollars?
1706. Hutchinson: from Hoyland and Dr. Couche.
1707. Judge Kelley: did you see any correspondence to this effect?
1708. Hutchinson: no, but I saw a letter saying they had 10,000 pounds to be put into the machine. Dr. Couche had sold them on the value of the machine.
1709. Comparet: well, how did you come to use the United Polytechnique Institute Corporation?
1710. Hutchinson: I suggested that as the contract that we had was for 11 Western states for the school, and as I doubted if we could deliver the course and I had formed a Nevada Corporation based upon this new contract and which contract and Corporation expected to offer to me a contract similar to the contract held from the Aero Reserve School, that for the sake of speed in the organization of their group we drop all ideas of carrying on the school and form amongst ourselves a group to operate the organization and own and control the same. That was to put this machine on the market and deal with the British and that we applied to the Corporation Commission to transfer stock owned at that time by Cullen, Olmstead and myself to these parties. And that this stock be transferred and impounded and at that time without consideration and that we use the present Corporation for the new organization and that we set up a fund to be paid to the group who had paid the expenses of the organization of United Polytechnique Institute not exceeding $1500 to reimburse such sums or pay such accounts as might be designated at that time. The majority of our United Polytechnique Institute directors were either present or were approached and approved. Olmstead had advised Cullen and myself that he was, because of his contracts, going to be forced to withdraw from an active part in the work and that he would give and assign when approved by the Corporation Commission any interest that he might have in our organization. It was agreed upon at that time, that due to the speed necessary this would be the move, and Cullen and myself, approved by Olmstead, stated that we would make such an application for transfer of this stock to any of the parties designated, in amounts to which they would agree and that when that was done we would freely give our stock if and when approved. All agreed that was the thing to do and we proceeded to prepare for our million dollars.
1711. Comparet: what was done about determining the relative interests of the parties as it got under way on this new business?
1712. Hutchinson: no agreement had been made at that time with any group other than the division of the interest which Dr. Rife gave to Hoyland and myself. I suggested that Dr. Rife have 30% of whatever the Corporation would be and his statement and that of Hoyland to me at that time was that because of the fact that Dr. Couche had made the contract with the British he was entitled to divide with them. The statement was made that Hoyland, Couche and Rife would receive $5000 of the $50,000 and that the others would receive proportionally smaller amounts. Hoyland objected to Couche receiving $5000 and suggested that it should be $6000 to Rife, $6000 to Hoyland and $3000 to Couche. The other divisions were made accordingly. It finally ended up that Mr. Hoyland asked for and received $7500 or 15% of the entire stock.
Bertrand Comparet wrote on this page of the trial transcript the following: "note how Hoyland dug in."
1713. Sapiro: has this witness been talking about money or stock?
1714. Judge Kelley: I don't know, perhaps I am not supposed to know.
1715. Sapiro: are they talking about two different things, that is the witness and the counsel?
1716. Hutchinson: they were to get these sums in stock not money. At the time, the permit was applied for the application was made out, there was considerable dissension in the organization and Mr. Cullen and Mr. Lyle, dealing with Hoyland, Henderson and their associates set up and presented amounts in which they wanted this stock delivered. That list was made out as shown and presented to their attorney, Mr. Glenn who approved it. It was forwarded to Fickerson and the application was filed.
Recess called until 2 P.M.
Hutchinson on the stand.
1717. Comparet: who is Larry Belger mentioned during this trial, is he a stockholder in Beam Ray Corporation?
1718. Hutchinson: I know him and he is not.
1719. Comparet: did you contemplate giving him some stock?
1720. Hutchinson: I did.
1721. Comparet: what were the dealings?
1722. Hutchinson: Belger wanted to hold some stock and I told him that I would give him 20 shares of my stock if I could get permission so to do.
1723. Comparet: did he pay any money to you or the Corporation for the stock?
1724. Hutchinson: no Sir.
1725. Comparet: did he ever get this stock?
1726. Hutchinson: no.
1727. Comparet: why not?
1728. Hutchinson: As Mr. Van Wort agreed to buy that from me if I would agree, subject to the agreement of the Corporation commission.
1729. Comparet: did Mr. Van Wort ever tell you that he had obtained from Belger whatever rights Belger might have to the stock?
1730. Hutchinson: he did.
1731. Comparet: I show you here a letter addressed to yourself, signed Larry E. Belger. Did he send or deliver that letter to you telling you that the stock should be given to Van Wort instead of to himself?
1732. Hutchinson: yes, he did.
1733. Comparet: Exhibit 00, an order from Corporation Commissioner consenting to the transfer of stock in escrow from C. R. Hutchinson to certain persons, including 20 shares to Van Wort; were these the 20 shares that were to have gone to Belger?
1734. Hutchinson: they are.
1735. Comparet: I call your attention to the fact that this letter, exhibit PP, says, "I want you to acknowledge receipt of diamond ring etc., together with any and all claims Mr. Van Wort might have against me. Did either the ring or the money come to you?
1736. Hutchinson: no Sir.
1737. Comparet: calling your attention once more to the statement made in the application to the Corporation Commission that you had agreed to furnish the Corporation a loan with money on which to get started on production. You did furnish some money did you not?
1738. Hutchinson: I did.
1739. Comparet: when the Corporation changed its business to the manufacture of Rife Ray machines was it your plan then to furnish the company, as a loan, money with which to get under way?
1740. Hutchinson: not personally.
1741. Comparet: how?
1742. Hutchinson: will you explain what you mean by how?
1743. Comparet: with regard to the money that was paid by Ernstein, Reynolds and Edwards. What was to be done with it?
1744. Hutchinson: that money was to be put in as a loan, strictly to be used for the building of machines and to be repaid before any salaries or dividends were paid.
1745. Comparet: did you so state to these parties prior to that time they gave you the money?
1746. Hutchinson: I did.
1747. Comparet: a total of $3500 was paid by these three, what was done with the money?
1748. Hutchinson: $3000 of it was turned into the company. $500 I kept for my own use with the approval of the company.
1749. Comparet: why did you keep this money?
1750. Hutchinson: because I could not handle this deal with the British or the business for America unless I was financed. It was charged to expenses.
1751. Comparet: were these expenses in connection with the British.
1752. Hutchinson: part of them.
1753. Comparet: that's the same $500 for which you gave the Corporation a promissory note and your assignment of your royalties?
1754. Hutchinson: it is.
1755. Comparet: I call your attention to the plaintiff’s exhibits three and four. Pages of the minute book of the Corporation dealing with stockholders and board of director meeting June 7th, 1937, held in Los Angeles. At the time of these meetings were you a stockholder and a member of the board of directors?
1756. Hutchinson: I was.
1757. Comparet: will you examine these minutes, particularly those of the meeting of the board of directors Exhibit 4, now in connection with these have you discovered that there is an inaccuracy, in your statements and will you explain it?
1758. Hutchinson: the minutes reflect what was done at the two meetings; they are combined under one meeting as shown by the minutes.
1759. Comparet: were you present at all three meetings?
1760. Hutchinson: I was. The first was a meeting of the board of directors an offer of Mr. Cullen was made. The offer was accepted and a resolution adopted to make an application for a permit to transfer the 4799 shares of stock for Mr. Cullen. Such a motion was seconded and passed.
1761. Comparet: what was done after that?
1762. Hutchinson: the meeting was adjourned and the stockholders meeting followed.
1763. Comparet: what did you do at the second meeting of the board of directors?
1764. Hutchinson: we elected additional members to the board of directors.
1765. Comparet: besides yourself and Olmstead who was present at these three meetings?
1766. Hutchinson: Cullen, Fickerson and Mrs. Willman.
1767. Comparet: who prepared the application for the permit?
1768. Hutchinson: Mr. Fickerson.
1769. Comparet: among the shares that were transferred in escrow after the company became Beam Ray, were some shares to Mr. Blewett. Did he pay for these shares?
1770. Hutchinson: no he did not.
1771. Comparet: did he pay the Corporation or Olmstead or Cullen anything for them?
1772. Hutchinson: he did not.
1773. Comparet: if the transfer of 100 shares to Dr. Bertol had been made how many shares would you have had left of the Corporation stock?
1774. Hutchinson: one.
1775. Comparet: this order authorizing transfer of shares in escrow says that you can transfer to Mr. Winter 4799. Did he buy these from you?
1776. Hutchinson: no.
1777. Comparet: did Edith Henderson buy her shares?
1778. Hutchinson: she did not.
1779. Comparet: did Beth Willman buy hers?
1780. Hutchinson: she did not.
1781. Judge Kelley: where are all these shares?
1782. Hutchinson: Mr. Fickerson has records of the fact that these people own stock, but the people mentioned do not have the stock.
1783. Judge Kelley: have any of these shares ever passed out of escrow?
1784. Hutchinson: no.
1785. Comparet: did Dr. Bertol pay anything for these shares?
1786. Hutchinson: he did not.
1787. Comparet: did Dr. Rife, or Hoyland, or Edwards, or Reynolds buy any?
1788. Hutchinson: no.
1789. Comparet: or did Ernstein or Miss. Ernstein buy any?
1790. Hutchinson: they did not.
1791. Judge Kelley: what did these various people do to deserve the gift of these shares of stock; they all testify that they did nothing?
1792. Hutchinson: Mr. Winters allowed us to use his name for credit. He was reported as treasurer.
1793. Judge Kelley: you gave him a block of stock for that small favor?
1794. Hutchinson: it was other things that he could do.
1795. Judge Kelley: what did Mr. Henderson do?
1796. Hutchinson: nothing.
1797. Judge Kelley: what did Mr. Henderson do?
1798. Hutchinson: he was out boosting the company.
1799. Judge Kelley: Miss Ernstein put up money didn’t she?
1800. Hutchinson: yes.
1801. Judge Kelley: and others also put up money?
1802. Hutchinson: yes.
1803. Judge Kelley: did you consider it fair to issue stock to some people who did not put in any money?
1804. Hutchinson: at that time we did not think about it.
1805. Judge Kelley: did you have a lawyer then?
1806. Hutchinson: Mr. Fickerson handled it, and Mr. Glenn represented the other people.
1807. Judge Kelley: did you personally ever have any experience with the Corporation Securities Act?
1808. Hutchinson: some.
1809. Comparet: the application to transfer etc. was drawn up in August 1938. Was that the matter that was brought to Mr. Fickerson?
1810. Hutchinson: yes
1811. Comparet: the money paid by Reynolds and the Ernsteins was paid the previous May?
1812. Hutchinson: yes.
1813. Comparet: referring to the transfer to Hutchinson from Rife and Hoyland of one third interest in the Rife Ray machine saying "we appoint you to act as our manager and to act in our behalf in all matters." Did you ever receive a document supposed to cancel this authority?
1814. Hutchinson: yes.
1815. Comparet: I show you a letter dated November 4th, 1938, attached to which is an envelope addressed to yourself, bearing the return address of Hoyland, being post marked January 10th, 1939. Have you seen these before?
1816. Hutchinson: I have.
1817. Comparet: did you receive that letter?
1818. Hutchinson: yes, I received it on that date or the following day.
1819. Comparet: this letter which purports to cancel your authority to act as manager is dated November 4th. Did you see that before you received it in January of this year?
1820. Hutchinson: (didn't get answer).
1821. Comparet: about when did you and Hoyland leave for New York to meet Dr. Gonin?
1822. Hutchinson: November 11th, 1938.
1823. Comparet: that would be a week after this letter had been written.
1824. Hutchinson: yes.
1825. Comparet: did Hoyland tell you that he and Dr. Rife had taken steps to cancel your authority to act as their manager?
1826. Hutchinson: he did not.
1827. Comparet: consider defendant's exhibit X, one of the modifications of the contract with the English. This letter referred to Hutchinson's authority to act for Rife and Hoyland saying that he, Hutchinson, approved of the amendments. That is signed by Hutchinson and Hoyland. Did you show that letter to Hoyland before you signed it and did you discuss the contents with him?
1828. Hutchinson: I did.
1829. Comparet: did it have to do with the reduction of the royalties?
1830. Hutchinson: yes.
1831. Comparet: did you go over that letter with Hoyland and did he read it and did he make any objection to the terms?
1832. Hutchinson: yes.
1833. Comparet: did he say that you had no authority any longer to act as a business manager or did he tell Gonin such a thing?
1834. Hutchinson: no he did not.
1835. Comparet: after Hoyland joined the company as technical director did you ever ask him to give the company the design of the machines or the frequencies?
1836. Hutchinson: yes, many times, but he always refused.
1837. Comparet: at the time of the deal between the owners and the company regarding the license to Beam Ray Corporation did you take part in these negotiations?
1838. Hutchinson: I did.
1839. Comparet: was anything said as to whether the license was to be exclusive?
1840. Hutchinson: they said that the group were to organize and put over the sale of the machines and that we would have the right to sell where ever we saw fit.
1841. Comparet: Mr. Hoyland said that it was expressly discussed that there would be other companies licensed in the United States and Canada, did this take place in your presence?
1842. Hutchinson: no.
1843. Comparet: did Dr. Rife or Mr. Hoyland say that he proposed to permit other companies to compete with Beam Ray and the manufacturing of these machines?
1844. Hutchinson: no.
1845. Comparet: was it your intention that the license was to be an exclusive one and that the owners were not to give licenses to other companies to compete with Beam Ray?
1846. Hutchinson: yes.
1847. Comparet: was that the understanding of the other owners?
1848. Hutchinson: I thought it was.
1849. Comparet: did you know that the language used in the agreement between the owners and Corporation was not sufficient in itself to confer an exclusive license?
1850. Sapiro: Sapiro objected and was sustained.
1851. Comparet: at the time you signed this was it your understanding that you were conferring an exclusive license to Beam Ray at that time?
1852. Hutchinson: it was.
1853. Comparet: that was your intention?
1854. Hutchinson: absolutely.
1855. Comparet: did Hoyland at any time during the negotiations state to you that he did not intend to make this an exclusive license?
1856. Hutchinson: he did not.
1857. Comparet: did you take part in the deal with the British regarding their license?
1858. Hutchinson: I did.
1859. Comparet: did Hoyland sit in on these conferences?
1860. Hutchinson: he did.
1861. Comparet: was anything said as to whether the license that the British were to receive should be an exclusive one within the territory it covered?
1862. Hutchinson: yes, it was agreed that they should get an exclusive one.
1863. Comparet: was this agreed in Mr. Hoyland's presence?
1864. Hutchinson: it was.
1865. Comparet: did Hoyland object to this in any way?
1866. Hutchinson: he did not.
1867. Comparet: I call the courts attention to the agreement between Beam Ray Incorporated and three Englishmen. This instrument fails to say that the license is exclusive.
1868. Judge Kelley: does it say anywhere in the contract that the license is not exclusive?
1869. Hutchinson: no.
1870. Judge Kelley: who drew up the contract?
1871. Comparet: it was drawn up in the office of Steiner but everybody and his dog had a hand in it. That was the trouble.
1872. Judge Kelley: I was wondering with whom that first license first originated. Didn't the license to the Corporation precede the deal with the British group?
1873. Comparet: a paper dated the first day of June 1938 sets out the division of the interest in the machine, Rife 33%, Hoyland 36 and 2/3%, Hutchinson 33 and 1/3%. That is not signed however, by the Corporation, it does not use the word license, it says that the company agrees not to sell the machine but to lease it and that any improvements will belong to the owners.
1874. Sapiro: I think the law is fixed on matters of patents, that they are not exclusive unless so stated, or unless it so states it is not.
1875. Judge Kelley: we will have to consider the circumstances; I think that they imply an exclusive right in this agreement between the owners.
1876. Comparet: the term license is not used in that paper, but the agreement between the Beam Ray Corporation and the owners and between Beam Ray and the British use the word license.
1877. Judge Kelley: you say both of these documents were finally drafted in the officers of Sloan and Steiner. Have you checked with these attorneys as to any conversation concerning this?
1878. Comparet: I checked with Mrs. Willman, who told me that she typed a number of drafts and that after that they took it to the office of the attorneys and even after that they had to make changes on the last three pages. It was a matter of unskilled labor, I would say. I will call your attention to defendants exhibit “E”. A contract between Beam Ray and the British, it says, "Whereas the Beam Ray Corporation holds an exclusive license etc."
After this discussion with Judge Kelley Comparet goes on questioning Hutchinson.
1879. Comparet: did Mr. Hoyland object to that language and did he read it?
1880. Hutchinson: He read it and did not object.
1881. Comparet: when you and Hoyland went to New York and dealt with Gonin did Hoyland then say that Beam Ray Corporation had no authority to grant an exclusive license to the British?
1882. Hutchinson: he did not.
1883. Comparet: did he say that Beam Ray did not have an exclusive license?
1884. Hutchinson: no.
1885. Comparet: at that conference with Gonin did Gonin then deliver a letter and two memorandums from him complaining that the British had not received what they bargained for?
1886. Hutchinson: yes, he did.
1887. Comparet: you and Mr. Hoyland took part in these conferences with Gonin?
1888. Hutchinson: we did.
1889. Comparet: I call your attention to cablegrams signed by Dr. Gonin and addressed to yourself, dated October 31st, 1938, "Distressed no reply to our cables, can you send representative etc.," And another saying, "All convinced you do not get our cables and letters etc." Did Gonin refer to these matters that he mentioned there?
1890. Hutchinson: yes he did.
1891. Comparet: did Mr. Hoyland give him any explanation as to why the company had not gotten these cables. Did he say I have that correspondence?
1892. Sapiro: Sapiro objected and was sustained.
1893. Comparet: rephrased the question.
1894. Hutchinson: no he did not.
1895. Comparet: I call your attention to a letter addressed to yourself from Blewett. Did Dr. Gonin deliver that letter to you in New York?
1896. Hutchinson: he did.
1897. Comparet: I call your attention to Hoyland's testimony; he stated he had seen the letter at that time. This letter complains about the condition of the machines. Did Hoyland give any explanation in reply to these complaints when he read the letters?
1898. Hutchinson: only about the frequencies, he told them that they had them in code.
1899. Comparet: did he say to whom he had given them in code?
1900. Hutchinson: I can't say.
1901. Comparet: did Hoyland say anything as to giving them any further information about the frequencies?
1902. Hutchinson: he stated that he had given them the frequencies in code and that by using the instructions they had they should be able to figure it out, but Dr. Gonin asked for the frequencies in figures, and Hoyland said again no, I gave them to you in code.
1903. Judge Kelley: did Gonin deny that he got them in code?
1904. Hutchinson: no, he denied that he could read the code.
1905. Comparet: during the time of the trip in November had it been brought to your attention that the British were complaining?
1906. Hutchinson: yes, many times.
1907. Comparet: did you take this up with Hoyland?
1908. Hutchinson: yes, and he always replied, "I gave it to them in code."
1909. Comparet: did you ask him to send them the frequencies?
1910. Hutchinson: yes, many times.
1911. Comparet: what did Hoyland reply?
1912. Hutchinson: "I gave it to them in code."
Sapiro took the witness.
1913. Sapiro: will you find the minutes of November 2nd, 1936 regarding the expenses of the Corporation. Will you show me the list? Hutchinson did so. You paid this money to Fickerson and Richardson yourself?
1914. Hutchinson: I did.
1915. Sapiro: this contains an item, minute book $5?
1916. Hutchinson: yes, I see it does.
1917. Judge Kelley: is that the minute book you bought?
1918. Hutchinson: it is.
1919. Sapiro: you signed this affidavit?
1920. Hutchinson: yes.
1921. Sapiro: did you file this knowing what the issues in this case were?
1922. Hutchinson: I thought I did.
1923. Sapiro: Sapiro showed him the item regarding the minute book of the Corporation and showed that the book was an old one used to save expenses. Now turn to the minutes of the meeting of June 1st, in the upper right hand corner is a number in your handwriting, what does that say?
1924. Hutchinson: number 22. That is a series of numbers that I put on the pages to see that there were no changes made in the minutes after I left the organization.
1925. Sapiro: what time does it say that the meeting took place?
1926. Hutchinson: June 1st at 10 o'clock.
1927. Sapiro: Sapiro then took him through several pages, getting Hutchinson to read the headings, bringing out that the minutes were not accurate, the minutes imply that there was only one meeting, but it was actually broken up into two meetings. Now Mr. Hutchinson when you said in your affidavit that you had carefully studied the minutes did you mean it?
1928. Hutchinson: I did.
1929. Sapiro: did you ever get paid $285?
1930. Hutchinson: yes, from a new group moving through the Corporation.
1931. Sapiro: how much did the organization collect in tuition?
1932. Hutchinson: I would say perhaps $225.
1933. Sapiro: is there a record of that?
1934. Hutchinson: I presume so, in the records of the Corporation.
1935. Sapiro: I would like to see that?
1936. Comparet: I don't see the materiality of this anyway?
1937. Sapiro: suppose I am just disproving the credibility of the witness.
Judge Kelley called recess, saying, let's see what the Secretary can do during recess.
After recess Sapiro questioning.
Hutchinson on the witness stand.
1938. Sapiro: I show you a book that has been delivered to us from Mr. Edwards. Is this the first book of accounts of the old Corporation?
1939. Hutchinson: no, it's my personal ledger.
1940. Sapiro: is it in your handwriting?
1941. Hutchinson: no.
1942. Sapiro: can you tell from that book what amounts you were paid as tuition fees into the organization?
1943. Hutchinson: this book has no connection with those accounts, it is my personal ledger taken from my personal files without my consent.
1944. Sapiro: don't blame me; it was given to me by Edwards.
1945. Comparet: tried to have this book kept out of evidence and Judge Kelley sustains his objection.
1946. Sapiro: did you receive $4300 in cash from Mr. Winters may 25th 1937?
1947. Hutchinson: if I may have my personal ledger so that I can check up, I will see.
1948. Comparet: Comparet wanted to have the ledger returned to Hutchinson but Judge Kelley ruled otherwise.
1949. Hutchinson: I received as a personal gift some money but I ordered it set up in my personal ledger; it was a loan from Winter, some $5300.
1950. Judge Kelley: were these shares of stock given to Mr. Winter in return for that money?
1951. Hutchinson: absolutely not.
1952. Judge Kelley: was that money used in the Corporation for anything?
1953. Hutchinson: no.
1954. Sapiro: will you look at the top of the next page. Does it show a loan to Mr. J. W. Finch? Did he give you that money for a personal consideration?
1955. Hutchinson: he didn't give me the money.
1956. Sapiro: to whom then?
1957. Hutchinson: to Mr. Cullen.
1958. Sapiro: was he promised 50 shares of stock for that money?
1959. Hutchinson: no.
1960. Sapiro: was the $500 returned to Finch six months ago?
1961. Hutchinson: it was, in June, by myself.
1962. Sapiro: why did you do this, what were the circumstances?
1963. Hutchinson: he presented a note signed by Mr. Cullen and endorsed by me. I have it with me.
1964. Sapiro: may I see it?
1965. Hutchinson: (giving it to him) you may.
1966. Sapiro: your item here states that the loan was made April 7th 1937, but the note is dated April 3rd 1938. Was there a personal thing which Finch had done which caused him to give him this note?
1967. Hutchinson: as I remember it, it was a renewal of the previous note from Mr. Cullen, he asked for an endorsement of the money.
1968. Sapiro: who put up the money to pay him?
1969. Hutchinson: it was the $500 charged on the books of the Corporation as part of the repayment of $1500.
1970. Sapiro: wasn't it set up as an account for the Aero School?
1971. Hutchinson: yes, I had advanced money for the school.
1972. Sapiro: when did you organize the United Aero School?
1973. Hutchinson: February of 1938.
1974. Sapiro: for what purpose?
1975. Hutchinson: the promotion of a correspondence school in aviation and the protection of myself against other contracts.
1976. Sapiro: did it teach the same courses as the United Polytechnique Institute was supposed to teach?
1977. Hutchinson: it was supposed to, it hasn't started yet.
1978. Sapiro: did you receive money from Henderson in connection with the Nevada Corporation?
1979. Hutchinson: yes.
1980. Sapiro: is Van Wort's name on that list?
1981. Hutchinson: it is.
1982. Sapiro: did he put money up for the expenses of the Corporations?
1983. Hutchinson: yes.
1984. Sapiro: isn't that what you said you did?
1985. Hutchinson: he paid attorney's fees and expenses to trips to Reno, about $1014. I am doing this from memory.
1986. Sapiro: did he ever get it back?
1987. Hutchinson: he hasn't yet.
1988. Sapiro: how many shares of United Aero stock did he get for this money?
1989. Hutchinson: I am not sure.
1990. Sapiro: of the stockholders mentioned in this list the following were likewise connected with the Nevada Corporation. Winter, Henderson, Van Wort, Cullen and yourself, from the time that the Corporation was set up to the time Beam Ray took over the Corporation was anything done to get these courses going?
1991. Hutchinson: I couldn't say.
1992. Sapiro: could there have been activities of the Corporation that you would not have known about?
1993. Hutchinson: there most certainly could.
1994. Sapiro: how could have this have been?
1995. Hutchinson: (this testimony was too fast to get) Hutchinson just alibied that he didn't know what was being done by the others.
1996. Sapiro: at that time that (Winter or Williams) made these loans or gifts, did he indicate any reason for his generosity?
1997. Hutchinson: no, I asked him for the money.
1998. Sapiro: was it due to his interest in the youth of the country?
1999. Hutchinson: yes.
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