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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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