1939 Beam Ray Trial Transcript

 

Pages 41-50

 

  Comperet: “There were a number of talks about the terms of the license that was to be given to the corporation?”

  Hoyland: “Yes.”

  Comperet: “Was it not stated that the license should be an exclusive one?”

  Hoyland: “No sir.”

  Comperet: “That was not discussed at any of these conferences?”

  Hoyland: “That was never discussed at any time.”

  Comperet: “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?”

  Hoyland: “There never was.”

  Comperet: “Was that discussed when Henderson and Mrs. Willman took part?”

  Hoyland: “No.”

  Comperet: “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?”

  Hoyland: “It seams that I realized it.”

  Comperet: “Was anything said among the owners to the effect that the company should be given not and exclusive but that it should be merely one of many companies given a license?”

  Hoyland: “Mr. Hutchinson and I discussed this, yes.”

  Comperet: “Who else?”

  Hoyland: “Just the two of us.”

  Judge Kelly: ‘Did you intend that the corporation should advertise the machine widely and did you understand that if other corporations were formed to manufacture these machines they would get the advantage of the advertising of this corporation?”

  Hoyland: “I don’t think we ever thought of that.”

  Comperet: “Weren’t you leaving it largely up to Mr. Hutchinson to take care of the details of licensing?”

  Hoyland: “Yes, he was the manager for the owners.”

  Comperet: “Then it was your intention that other companies would be licensed to compete with the Beam Ray company in the manufacturing of this machine?”

  Hoyland: “That is correct.”

  Comperet: “Did you inform Dr. Rife that you meant to license others?”

  Hoyland: “I don’t know.”

  Comperet: “You did however, tell Mr. Hutchinson that that was your intention?”

  Hoyland: “He brought it up the first time himself. We spoke of it often.”

  Comperet: “Were these discussions prior to the final signing of the contract with the Beam Ray corporation?”

  Hoyland: “Yes.”

  Comperet: “Did you inform any other officers of the corporation that you intended to license others to compete with the Beam Ray?”

  Hoyland: “I don’t remember.”

  Comperet: “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 understand that the British was to receive an exclusive license?”

  Hoyland: “Yes.”

  Comperet: “Yet you also understand that Beam Ray could not give this license to the British because they didn’t have an exclusive license themselves?”

  Hoyland: “They were acting for the owners and given a share in what we got out of the British.”

  Comperet: “Will you read the question again please.”

  Judge Kelly: “Did you understand that the corporation was acting as an agent?”

  Hoyland: “Yes.”

  Judge Kelly: “Did Dr. Rife authorize the corporation to act as his agent?”

  Hoyland: “He authorized Hutchinson to act for him.”

  Judge Kelly: “Did you understand when the British signed that contract that they thought they were getting an exclusive license?”

  Hoyland: “Yes, getting it through the owners.”

  Comperet: “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.”

  Hoyland: “No, it doesn’t specify it.”

  Comperet: “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 corp?”

  Hoyland: “Yes.”

  Comperet: “You understood that you needed that written authorization from the corporation in order to change the contract?”

  Hoyland: “We took it out but we never used it.”

  Comperet: “If Dr. Gonin had wanted to see that written authorization you would have to have shown it to him?”

  Hoyland: “Yes.”

  Comperet: “You have that paper from the corporation on you possession now?”

  Hoyland: “If I had it, it would be in those letters I gave you today.”

  Comperet said it was not among those papers.

  Comperet: “You understood anyway that you were acting under that authorization?”

  (missing words)

  Comperet: “I show you here a copy of the resolution of the board of directors dated November 11, 1938. This was the authorization for Hutchinson and Hoyland to represent the corporation in New York?”

  Hoyland identified the document.

  Judge Kelly: “Who were the owners at the time this was signed?”

  Hoyland: “The same three. Rife, Hutchinson, and myself.”

  Judge Kelly: “Did you understand that you were acting as an agent for the corporation and on behalf of yourself?"

  Hoyland: “Yes sir.”

  Judge Kelly: “Was there ever any authorization of any agent by Dr. Rife?”

  Hoyland: “I talked the matter over with Dr. Rife the day before we left for New York and he said anything you and Hutchinson decide will be agreeable to me.”

  Judge Kelly: “However there was no written authorization from Rife?”

  Hoyland: “No.”

  Sapiro: “I think there is one, it hasn’t been introduced yet.”

  Judge Kelly insisted that he wanted to see any written authorization from Dr. Rife. Comperet showed a paper signed by Rife giving Hutchinson full authority to act in the owner’s behalf. Judge Kelly declared that this paper did not go so far as to authorize the dealings with the British group. Comperet puts a question.

  Comperet: “Mr. Hoyland, you became associated with Beam Ray while it was still U.P.I., around the first part of May 1938?”

  Hoyland: “Yes, April or the first part of May.”

  Comperet: “You went at frequent intervals to the company’s offices?”

  Hoyland: “Yes, I went every day.”

  Comperet: “You attended directors meetings before you became a member of the board?”

  Hoyland: “Yes.”

  Comperet: “They were held around once or twice a month and you attended practically all the meetings until you went to New York?”

  Hoyland: “Yes.”

  Comperet: “You continued to attend these meetings until sometime in January of this year?”

  Hoyland: “I was at one meeting in December to discuss expense accounts for the New York trip.”

  Comperet: “You were also at one directors meeting in January?”

  Hoyland: “No.”

  Comperet: “You read the minute book of the corporation?”

  Hoyland: “Not until I became a director.”

  Comperet: “Are you sure of this.”

  Hoyland: “Yes, I was never allowed to get at it.”

  Comperet: “And you desired to see it?”

  Hoyland: “It was a very carefully kept out of my way. After I was a director I only read the minutes of the meetings as they took place.”

  Comperet: “You read and signed them in a good many instances?”

  Hoyland: “I think I signed one.”

  Comperet: “Did you read the minutes of meetings held prior to your becoming a member of the board?”

  Hoyland: “No sir.”

  Comperet: You were present at the directors meeting at which you were elected?”

  Hoyland: “After I had been elected, yes.”

  Comperet: “After this you made a motion to create a position of sales manager?”

  Hoyland: “I know that the position was created, but I am not sure I made the motion.”

  Comperet showed him the minutes of that meeting calling his attention to the fact that Cullen called the meeting to order and reference to items including Hoyland making the motion to create the position of sales manager.

  Hoyland: “Yes, somebody had to make the motion so I made it.”

  Comperet: “When was the first time that you ever saw the minutes to any meeting of the board of directors prior to the meeting at which you were elected?”

  Hoyland: “In January of this year.”

  Comperet: “”Not before?”

  Hoyland: “No sir.”

  Comperet: “When you saw the minutes of the meetings which you had attended as a director, were they in the minute book?”

  Hoyland: “I am not sure. I think so.”

  Comperet: “Why didn’t you look back at some of the minutes of the former meetings?”

  Hoyland: “They were just handed to me to sign and I signed them.”

  Comperet: “You were in the office of the company many times, didn’t you ask to see these minutes?”

  Hoyland: “No.”

  Comperet: “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?”

  Hoyland: “Yes.”

  Comperet: “This refers also to the company having conferred an exclusive license to the British, doesn’t it?”

  Hoyland: “That’s right.”

  (missing words)

  Sapiro objected but Judge Kelly overruled him.

  Hoyland: “This was talked over with Dr. Rife in his lab at the end of December. He was in accord with that I was doing at that time, as regards this particular item.”

  Comperet said that is all at this time. Sapiro took the witness.

  Sapiro: “Do you remember how long a time you and any others worked in making these four machines for the British?”

  Hoyland: “We started on the fourth of June and they were shipped in August, we worked about six weeks.”

  Sapiro: “Were the clinical machines the same as were made for Dr. Hamer?”

  Hoyland: “Yes.”

  Sapiro: “Was that the same as the machine used on Mrs. Henderson?”

  Hoyland: “No, but the same type.”

  Sapiro: “Was it the same as the machine the British saw when they were here?”

  Hoyland: “Yes.”

 Sapiro: “You said that an expert could wire the machines in one day, what did you mean by that?”

  Hoyland: “That referred to if we were doing mass production.”

  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 22, 1938, and he 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.

  Sapiro: “Was Hutchinson then manager for the company?”

  Hoyland: “Yes.”

  Judge Kelly read the letter over Comperet’s objection and admitted as evidence.

  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?”

  Hoyland: “Yes.”

  Sapiro then read the minutes of the meeting of the board resolving that Hoyland should draw up a letter in reply to a letter from the British.

  Sapiro: “Did you write such a letter?”

  Hoyland: “Yes.”

  Sapiro: “I show you a copy of the letter, is this the letter and was the original signed by you?”

  Hoyland: “Yes.”

Sapiro then read from the letter to the effect that coded frequencies had been sent to the British.

  Sapiro: “Did you present copies of this letter to the members of the board?”

  Hoyland: “Yes.”

  Sapiro: “Did they all approve of it?”

  Hoyland: “They all agreed that it was a good letter.”

  Sapiro: “Did anyone complain about the contents of the other letters?”

  Hoyland: “No.”

  Sapiro: “Did you have a lot of correspondence with the British?”

  Hoyland: “I sent quite a lot of letters to them.”

  Sapiro called upon Hoyland to identify copies of letters sent by Hoyland to the British. He did so and these were then admitted as evidence. One of these letters referred to an enclosure showing Parsons how to operate a Rife 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. Judge Kelly remarked, ‘They were a little bit optimistic weren’t they’. Another letter referred to a list of schematics and changes in the personal of the company.

  Court adjourned until Wednesday, 10 A.M.

  Wednesday June 28, 1939. Hoyland on the stand.

Sapiro introduced more letters written by Hoyland to the British. These had to do with equipment and technical matters. One dated August 6th contained a list of parts shipped. And August 27th, letter from Hoyland to Blewett that Referred to changes in frequencies eliminating number five plug. Letter of September 9th, referred to Seventh Day Adventists, letter September 23, general remarks about business. Letter 24, to Parsons, explanation of frequencies. Letter August 29th Hutchinson, Hoyland, and Beth Willman, signed by Dr. Couche. Comperet objected on grounds that the Couche letter was hearsay, and Judge Kelly sustained the objection. Sapiro tried to introduce a letter to Couche from Hutchinson. Comperet objected again on the same grounds and was sustained by Judge Kelly, who declared that he did not consider Dr. Couche a part of the litigation. 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.

  Sapiro: “Did you know Mr. Blewett when he was here with the British group?”

  Hoyland: “Yes.”

  Sapiro: “Was anyone besides you writing to Dr. Blewett?”

  Hoyland: “Yes, Hutchinson, Mrs. Willman Dr. Rife.”

  Sapiro: “How did you know this?”

(missing words)

  Hoyland: “Yes, they did.”

  Sapiro: “The original of the document of adjustment of interest to Hutchinson dated April 30, 1938, you said that it was in your hand writing, was that copied by you from something and if so from what?”

  Hoyland: “From a typewritten sheet that had been prepared by Mr. Hutchinson.”

  Sapiro: “Did you make any change in the document when you copied it?”

  Hoyland: “Yes, I changed one line.”

  Sapiro: “What was the line?”

  Comperet objected and was sustained but Judge Kelly allowed Hoyland to point out the line, that he was trying to show that Hutchinson attempted to dominate the other two owners, (Hoyland and Rife). But Judge Kelly did not consider this line of evidence and would not admit it.

  Sapiro: “You met Dr. Gonin in New York about November 17, did you discuss with him at that time all the other matters that he had been inquiring about?”

  Hoyland: “I discussed all the questions that he brought up about technical things.”

  Sapiro: Was Mr. Hutchinson present at these meetings?”

  Hoyland: “Yes.”

  Sapiro: “Was Dr. Gonin satisfied with the information and did he say so in the presence of Mr. Hutchinson?”

  Hoyland: “Yes.”

  Sapiro: “Was the new contract that they sent over to the British a restatement of the old contract or did it differ in one particular from the others?”

  Comperet objected and was sustained.

  Sapiro: “Did you discuss this agreement with Mr. Edwards?”

  Hoyland: “Yes.”

  Sapiro: “At that time did either of you speak of any objections to that agreement?”

  Hoyland: “Yes, we decided to have one of the payments put off until they could get their machines in working order.”

  Sapiro: “Were the British in default at that time, and if so how much?”

  Hoyland: “Yes, they were, about five thousand dollars.”

  Sapiro then brought out that the British were in default of another payment later and that Edwards and Hoyland discussed the matter.

  Sapiro: “Were any conclusions expressed by you or Edwards at that time as to what was to be done?”

  Hoyland: “Yes, we both made suggestions.”

  Sapiro: “Do you remember any made by Edwards?”

  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.”


  Sapiro: “Did Mr. Edwards prepare such a cablegram?”

  Hoyland: “Yes, he did.”

  Sapiro: “Who sent it?”

  Hoyland: “He asked me to and I did.”

  Judge Kelly: “Did you ever get a financial report on the British group?”

  Hoyland: “No sir.”


  Judge Kelly: “Did you know of anything being done along that line by the officers or directors of the company?”

  Hoyland: “No sir.”

  Morning recess was called.

 Sapiro: “You testified today that Hutchinson ha said that you and Rife would get about thirty percent of the stock of Beam Ray?”

  Hoyland: “Yes, sir.”

  Sapiro: “Was this an inducement to you to sign up with Beam Ray.”

  Hoyland: “Yes.”

  Sapiro: “On references to licenses to other corporations did Mr. Hutchinson mention where these would be given?”

  Hoyland: “He said there would be one on the east coast, one in the middle west, and so on.”

  Sapiro: “Did he say anything about Beam Ray in connection with these other licenses?”

  Hoyland: “No.”

  Comperet: “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 the frequencies?”

  Hoyland: “Not in respect to the frequencies as the frequencies but I references to the calibrations on his dials.”


  Comperet: “And you say that he was fully satisfied with your answers before he left?”

  Hoyland: “Yes.”


  Comperet: “Did he say that Blewett and Parsons were also satisfied?”

  Hoyland: “He didn’t mention them.”

  Comperet: “And this all took place in the presence of Mr. Hutchinson?”

  Hoyland: “Yes sir.”

  (missing words)

  Hoyland: “No, we came to an agreement on the royalty.”

  Comperet: “Didn’t he state that you had misrepresented the price of the machines to him based on what the parts actually cost?”

  Hoyland: “No, he said that the machines could be built in England for one hundred and twenty five dollars.”

  Comperet: “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?”

  Hoyland: “What letters are those, may I see them?”

  Comperet secures the letters.

  Comperet: “I show you exhibit 25 signed for Beam Ray, also exhibit 30 and 31 signed yours very truly Beam Ray Inc., 33, 34, 37. How does it happen that all these letters have been kept in your possession?”

  Hoyland: “These are letters that I sent to Dr. Parsons.”

  Comperet: “You stated that some of them were not signed by you.”

  Hoyland: “Some are signed by Mr. Lyle, he gave them to me.”


  Comperet: “Didn’t you think that the corporation should have these letters?”

  Hoyland: “The corporation had the copy of some of them.”


  Comperet: “You said that the reason you didn’t send the numerical frequencies was that the understanding was that they were not to get them?”

  Hoyland: “That’s right.”

  Comperet: “Here is a letter signed by you saying, ‘we have 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 10, signed Mr. Blewett and delivered personally by Dr. Gonin in New York, you say that during the conferences in New York…”

  Hoyland: “Yes, I remember now having read that in New York,”

  Comperet: “I call your attention to the following in this letter, ‘I told you in my last letter how disappointed we all were in 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 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?”

  Hoyland: “I don’t remember.”

  Comperet: “As a matter of fact, didn’t you keep very silent about it?”

  Judge Kelly: “What was your position with reference to these demands, did you feel that they were entitled to them through the contract?”

  Hoyland: “I have them what they had a right to have. I sent them the code long before this letter was received.”

  Comperet: “In this letter here Mr. Blewett complains that they had been assured that six hundred dollars was the net cost for the clinical machines and that he found 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 his?”

  Hoyland: “I don’t know.”

  Comperet 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 the Beam Ray charged them and that they were terribly misinformed.

  Comperet: “Wasn’t it discussed at the conference with Gonin in New York?”

  Hoyland: “No, he merely said that they could manufacture them for that price.”

  Comperet: “(reading from the letter again). Why, in spite of repeated requests, have we not had the figures on the cost of the machines?”

  Hoyland: “They were sent to them.”

  Comperet: “Was not that discussed in your New York conference?”

 

 

 

 


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