1939 Beam Ray Trial Transcript


Pages 101-107


Fickerson:” Three, the director meeting was held first, then the stockholders meeting was held, and then a second directors meeting.”

  Comperet: “What was done at the first directors meeting?”

  Fickerson:” Two contracts which had been executed by A.R.S. and Cullen were presented together with an offer from Cullen to transfer or assign these two contracts to the corporation in exchange for all unissued shares of stock, 4997 shares. The offer was made, read,  and accepted by a resolution which was accepted. Olmstead and Hutchinson were to get this stock along with Cullen.”

  Comperet: “Did that acceptance of contracts and resolutions to ask permission to issue stock take place prior to the shareholders meeting?”

  Fickerson: “It was the first thing that was done when the officers of the corporation arrived at my office.”

  Comperet: “Now I show you an application for a supplemental permit, who prepared it?”

  Fickerson: “I had it prepared before the directors and stockholders arrived at my office.”

  Comperet: “When did they sign that application?”

  Fickerson: “Within an hour of the time they arrived at my office.”

  Comperet: “Was it prior to the share holders meeting at which an increase of the board of directors was made?”

  Fickerson: “It was.”

  Comperet: “I call your attention to the application and ask you to look it over, is there anything in there which further clears this in your memory?”

  Sapiro objected and was denied.

  Comperet: “Look at the paragraph beginning on page one, with names and addresses of officers Cullen, Olmstead and Hutchinson, then the paragraph includes, ‘The board of directors is to be increased from three to nine members but before this is done their names will be submitted, etc.’.”

  Sapiro objected and was sustained.

  Comperet: “Where did you get the information you put in there?”

(missing words)

  Comperet: “Did you send in to the corporation commissioner the original of the application for a supplemental permit?”

  Fickerson: “I did.”

  Comperet: “I show you here a carbon copy of a letter, you signed it?”

  Fickerson: “I did.”

  Comperet: “The names of six new members of the board are given in this letter with their addresses, after that, what next took place?”

  Fickerson: “The stockholders meeting took place.”

  Comperet: “And after that what?”

  Fickerson: “A directors meeting was held.”

  Comperet: “What was done then?”

  Fickerson: “Three persons were voted to replace, (didn’t get what was muttered).”

  Judge Kelly: “Are you reading from the minutes?”

  Fickerson: “Yes, but I recollect it perfectly.”

  Judge Kelly: “But what go by the minutes?”

  Comperet: “We are trying to show that the minutes are not correct.”

  Judge Kelly: “You prepared the minutes before the meeting?”

  Fickerson: “Yes, your Honor, I only expected one meeting.”

  Comperet: “I call your attention to the following page, you will note the difference in the typewriting on the two pages?”

  Fickerson: “These minutes on page 223 were not written in my office or on my typewriter. They were written later, not on that day.”

  Comperet: “Going back to the minutes of the stockholders meeting, on the last page, notice the last sentence on that page, ‘No further business coming before the meeting, it was adjourned’.”

  Fickerson: “That sentence was not typed in my office.”

  Sapiro: “I move for the exclusion of the testimony in the difference of typewriters. You say that Mr. Hutchinson spoke to you and told you what to prepare for these minutes, so that you know would be an increase in the board of directors and that at the same time you knew that there would be a (missing words) to take the stock for the three?”

  Fickerson: “Yes, I knew that.”

  Sapiro: “You prepared the minutes for a meeting of directors at 11 and for a meeting of stockholders at 10?”

  Fickerson: “The information that I had had was that a meeting was to be held for the purpose of having stock gotten from Cullen, and for increasing the number of directors from three to nine not the names of the new directors were not given to me.”

  Sapiro:” I asked you if you had prepared these with stockholders at 10 and directors at 11.”

  Fickerson: “No.”

  Sapiro: “That’s the way it is in the book.”

  Fickerson: “If I ever knew anything about corporation, I wouldn’t do it, my dictation to my stenographer was that the directors meeting should be held at ten and that the stockholders at 11. I didn’t know any new members were to be added to the board of directors, except as for Mrs. Willman. I advised them to put a new caption here showing that there were two separate meetings and that the time should be corrected. I never noticed that there was this mistake until I read the complaint. Mr. Comperet asked me to explain it but I could not do so, except that there had been a mistake made by the stenographer.”

  Sapiro: “You said that that application was signed after the first directors meeting?”

  Fickerson: “Yes.”

  Sapiro: “Weren’t you called in to pull them out of this hole because they are in a position that makes it look as if you made a mistake?”

  Comperet objected and was sustained.

  Sapiro: “Is the issue of stock invalid if this transaction was carried through as it is set forth in the minutes?”

  Comperet objected and was sustained.

  Judge Kelly: “What is motivating your testimony Mr. Fickerson?”

  Fickerson: “To show clearly how this mistake was made.”

  Sapiro: “Where were the minutes of the meeting of the stockholders signed?”

  Fickerson: “I don’t know, not in my office.”

  Sapiro: “If they were not signed in your office then Mr. Olmstead testified wrongly.”

  Comperet objected and was sustained. Fickerson excused. Afternoon recess called.

  After the recess.

  Comperet: “The defendants will rest, as I do not see any point in prolonging this, we could keep going for another week.”

  Sapiro: “I would like to put Mr. Van Wort on the stand.”

  Judge Kelly: “Go ahead.”

  Mr. Van Wort takes the stand.

  Sapiro: “Please don’t think I am yelling at the witness. He is quite deaf. Give your name and address. Did you know Hutchinson before August 1937?”

  Van Wort: “No sir.”

  Sapiro: “I show you a receipt, will you state to the court when you got it from Mr. Hutchinson?”

  (missing words)

  Van Wort: “No.”

  Sapiro: “At the time you got this receipt, had you turned over $200.00 to Hutchinson?”

  Van Wort: “I had.”

  Comperet takes witness.

  Comperet: “The $200.00 that you gave and for which you got a receipt, is that in cash?”

  Van Wort: “Yes.”

  Comperet: “Then this check is for a different item?”

  Van Wort: “Yes.”

  Comperet: “You didn’t ask for a receipt for a check?”

  Van Wort: “No, the check itself was a receipt.”

  Van Wort excused.

  Judge Kelly: “Do you think you can finish the argument before five?”

  Sapiro: “I don’t think so, it will be an argument of fact as well as law. I couldn’t finish my argument before five.”

  Judge Kelly: “This department will be dark for a month and I will be busy for a month. It will be impossible to hear you further until the month of August,  so that we will have to continue this meeting until the 7th of August.”

  Comperet then asked to have it put off until the 14th of August and this was agreed upon.

  Judge Kelly: “I want to hear counsel marshal the evidence and I want to know the effect upon a court of equity upon a corporation acting through its agents and these agents acting in a manner that is equitable. And I want to hear what your views are as to the importance of the assets of the corporation. I want to know what you think this corporation owns. It doesn’t seem to me at the moment that it owns anything. It does seem to have a claim on Dr. Rife. Who owns the forty or more frequencies that Dr. Rife has? What has the corporation other than the license to manufacture these machines? And what is the value of that license, if any? Frankly, the court believes that Mr. Hoyland could have given the British group more of what they asked for and that he showed too great a reluctance to give them this information. On the other hand the court’s inclined to believe that when money was raised by Hutchinson and that when he issued these letters to the people who put the money up, he was issuing securities and selling interests in certain stock in escrow and collecting money for them. What effect did that have on the issues here if he was violating the Corporate Securities Act? The important objective of the act is to protect any money in the possession of the victims, not so much with the issuance of the stock. It seems to the court that the representative of a corporation acting through its general managers has come into a court of equity without clean hands and the Plaintiff has done the same, what should the court do? But primarily the question of the innocent people who put their money up and who stand to lose it comes first. I want these people protected in any event, people have come here before the court, who were without guilt, and who parted with their money, thinking they were to have an interest in an instrument of great value. I don’t know whether it has value or not. It appears to be something that cannot be patented. The assignment was made to the corporation but that means nothing, because the instrument is not subject to patent. Perhaps it was a valuable assignment, in spite of that, I want your views on it. I am not personally impressed by Mr. Hutchinson or Mr. Hoyland, but am impressed with the victims who put up their money and got nothing for it. I will be inclined to protect them in any way that I can. Now, if you can convince me that I am wrong in anything that I have said, my opinions are subject to change.”

  Comperet: “I think we understand the issues.”

  (missing words)

  Hutchinson: “No, he was transferring subject to the conditions under which it had been given to him, any rights that he may have had.”

  Sapiro: “I show you this letter. Is that your signature?’

  Hutchinson: “Yes.”

  Sapiro: “In this letter there is a portion signed by Hutch. I now show you a check payable to you in the amount of $20.00 endorsed by you, signed by Van Wort. Have you seen that before?

  Hutchinson: “Yes.”

  Sapiro: “(to the court) We are showing the court that Hutchinson did get some money through these transactions. Now, Mr. Hutch, would you look at the application to transfer stock that mentions Mr. Van Wort. How many shares to be transferred by you?”

  Hutchinson: “20.”

  Sapiro: ”Did Mr. Van Wort lend you any money after that?”

  Hutchinson: “I don’t think so.”

  Sapiro: “I show you a receipt received Van Wort, $200.00 U.P.I., San Diego, California, January 28, 1937, signed by C.R. Hutchinson, is that your signature?”

  Hutchinson: “Yes.”

  Sapiro: “Isn’t that date wrong, shouldn’t it be 1938?”

  Hutchinson: “It has been changed.”

  Sapiro showed a check made out to Hutchinson for $200.00 signed by Van Wort and endorsed by Hutchinson.

  Sapiro: “Yesterday morning you said you made a mistake in your affidavit, when did you find this out?”

  Hutchinson: “When my attention was called to the minutes of the June 1st meeting.”

  Sapiro: “Who did this and when?”

  Hutchinson: “I am not sure, but I believe Mr. Comperet did after reading parts of the original complaint.”

  Sapiro: “When did this happen?”

  Hutchinson: “Sometime after I filed my affidavit.”

  Sapiro: “When?”

  Hutchinson: “Between the date of filing and the time Mr. Olmstead, Cullen, Fickerson, and myself went to Mr. Comperet’s office to see the minutes in trying to find out what had caused the error.”

  Sapiro: “Are you sure that it wasn’t after the testimony of Mr. Olmstead?”

  Hutchinson: “Positive.”

  Sapiro: “What was your mistake?”

  Hutchinson: “When I said that the minutes were absolutely correct, the first error was the mention of the first stockholders meeting on June 1st, together with the statement of the prepared minutes, of the August meeting in Fresno.”

  Sapiro: “Was one of the errors that all of the pages were wrong?”

  Hutchinson: “What do you mean?”

  Sapiro: “Never mind. You stated that Beth Willman was at the meeting of June 1st, was that an error?”

  Hutchinson: “She was present of course.”

  Sapiro: “Then Olmstead was wrong, he said that she wasn’t there. Look in the book please and see of there is any record of the presence of Mrs. Willman.”

  Hutchinson: “(After looking in the book). There is nothing in the minutes.”

  Sapiro:” You signed the minutes didn’t you?”

  Hutchinson: “Yes.”

  Sapiro: “And you never noticed these errors until it became an issue in the courtroom?”

  Hutchinson: “I never thought of it.”

  Sapiro: “You heard them read in Fresno, and heard that there were vital mistakes in them?”

  Hutchinson: “It was the content of the minutes themselves as near as I could remember them, I didn’t go back and figure out any of these meetings, or try to remember how they were held.”

  Sapiro: “Wouldn’t you have noticed the presence of Mrs. Willman at the second meeting if she had really been elected at the first?”

  Hutchinson: “Not necessarily.”

  Sapiro: “As secretary, you were responsible for the minutes?”

  Hutchinson: “Yes.”

  Sapiro: “Then shouldn’t you have done that, shouldn’t you have seen that they were right?”

  Hutchinson: “Not necessarily.”

  Sapiro: “Who read the minutes of the Fresno meeting?”

  Hutchinson: “Mr. Olmstead.”

  Sapiro: “Yet you signed the minutes, saying that Mrs. Willman had read the, didn’t you ever suggest that they correct these minutes?”

  Hutchinson: “I didn’t notice the difference.”

  Sapiro: “You knew that that meeting of June 1st, was a matter concerning this case when you made your affidavit?”

  Hutchinson: “Yes.”

  Sapiro: “You spoke of costs that had been advanced in the amount of $1500.00?”

  Hutchinson: “Estimated.”

  Sapiro: “There is an item in the minutes about $1500.00 owed to the U.A.S. Inc., was that for organization?”

  Hutchinson: “That was for an agreement of the group that were going to take it over to assume any obligation to that amount that might be presented…(transcript missing lines).”

  Sapiro: “You had already set up Aero school in Nevada?”



This is the End of what we have managed to salvage.


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