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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 this note?”
Hutchinson:
“As I remember it, it was a renewal of the previous note from
Mr. Cullen, he asked for an endorsement of the note.”
Sapiro:
“Who put up the money to pay him?”
Hutchinson:
“It was the $500.00 charged on the books of the corporation as
part of the repayment of $1,500.00.”
Sapiro:
“Wasn’t it set up as an account of the Aero school?”
Hutchinson:
“Yes, I had advanced money for the school.”
Sapiro:
“When did you organize U.A.S.?”
Hutchinson:
“February of 1938.”
Sapiro:
“For what purpose/”
Hutchinson:
“The promotion of a correspondence school in aviation, and the
protection of myself against other contracts.”
Sapiro:
“Did it teach the same courses as the U.P.I. was supposed to
teach?”
Hutchinson:
“It was supposed to, it hasn’t started yet.”
Sapiro:
“Did you receive money from Henderson in connection with the
Nevada corporation?”
Hutchinson:
“Yes.”
Sapiro:
“Is Van Wort’s name on that list?”
Hutchinson:
“It is.”
Sapiro:
“Did he put money up for the expenses of the corporations?”
Hutchinson:
“He paid attorney’s fees and expenses to trips to Reno,
about $1014.00, I am doing this from memory.”
Sapiro:
“Did he ever get it back?”
Hutchinson:
“He hasn’t yet.”
Sapiro:
“How many shares of Aero stock did you get for this money?”
Hutchinson:
“I am not sure.”
Sapiro:
“Of the stockholders mentioned in this list the following were
likewise connected to the Nevada corporation. Winter, Henderson,
Van Wort, Cullen, and yourself, from the time that corporation
was set up to the time Beam Ray took over the corporation was
anything done to get these courses going?”
Hutchinson:
“I couldn’t say.”
Sapiro:
“Could there have been activities of the corporation that you
would not have known about?”
Hutchinson:
“There most certainly could.”
Sapiro:
“How could have this been?”
(This testimony was too fast to get) Hutchinson just alibied
that he didn’t know what was being done by the others.
Sapiro:
“At that time that (Winter, or Williams) made these loans or
gifts, did he indicate any reason for this generosity?”
Hutchinson: “No, I asked him for money.”
Sapiro:
“Was it due to his interests in the youth of the country?”
Hutchinson:
“Yes.”
Sapiro:
“What was that interest?”
Hutchinson:
“All I can state is hearsay.”
Sapiro:
”Did he say that these gifts were to enable you to give Aero
courses to the youth of San Diego, etc?”
Hutchinson:
“Yes.”
Sapiro:
“How many students did you have at the time?”
Hutchinson:
“At that time we didn’t have any.”
Sapiro:
“I will show you the books, will you look in them and see if
you can find out how much the corporation received for
tuition?”
Judge
Kelly: “I want this ledger that Mr. Hutchinson says is
his personal property to be left in the hands f the court, but
not entered as evidence.”
Hutchinson:
“I don’t find any record of any payment of tuition (after
looking through books). These books start with the organization
of the Rife Ray machine.”
Sapiro:
“The book I hold in my hand starts much sooner. Will you look
at page 11 of exhibit 38 for identification. Can you tell in
what time and in what amount Mr. Bertol made you a loan?”
Hutchinson:
“July 26, 1937 for $300.00.”
Sapiro:
“Was he on the list of persons who were to receive stock in
Beam Ray corporation?”
Hutchinson:
“Yes.”
Judge
Kelly: “(After looking at the book in question),
Calling your attention to page 1, Mr. Hutch, these entries are
not in your handwriting, is that right?”
Hutchinson:
“That’s right.”
Judge
Kelly: “Do you know who wrote the items on page
one?”
Hutchinson:
“No, I can’t say.”
Judge
Kelly: “Were there any items made under your
supervision?”
Hutchinson:
“It looks to me as if it’s been copies from something else,
it looks like copies of my personal ledger.”
Judge
Kelly: “Do you know how this book got into the
possession of Mr. Edwards?”
Hutchinson:
“No.”
Judge
Kelly: “Have you ever seen this book before?”
Hutchinson:
“No.”
Judge
Kelly: “Is that a true copy of your accounts?”
Hutchinson:
“I would say it reflects the accounts that I owe.”
Judge
Kelly: “You received how much money from Winters?”
Hutchinson:
“$5,500.00.”
Judge
Kelly: “Did you know Mr. Winter before the first of
these loans was made?”
Hutchinson:
“Yes.”
Judge
Kelly: “How long had you known him prior to that
time?”
Hutchinson:
“I don’t recall.”
Judge
Kelly: “Had you been in any business with him?”
Hutchinson:
“No.”
Judge
Kelly: “It was more social matter, was it casual or
close?”
Hutchinson:
It was not social, but it was close.”
Judge
Kelly: “In what way were you associated, through clubs
or anything like that?”
Hutchinson:
“I knew him in a business way.”
Judge
Kelly: “Did you know his name well enough to call him
by his first name?”
Hutchinson:
“Yes.”
Judge Kelly: “Did you give him any security for
these loans, or did he ask for any?”
Hutchinson:
“No.”
Judge
Kelly: “Did you sign anything, any promissory
notes?”
(missing
words)
Judge
Kelly: “How much were you worth when you borrowed this
money, what were your assets, give yourself all the best of
it?”
Hutchinson:
“The liquid assets were nothing, the ownership in rights would
run into money, many thousands of dollars, I owned an interest
in an item known as ‘Nofog’, it was used by Amelia Earhart
in San Francisco, for the purpose of fighting fog, I also had
the assurance of an interest in Beam Ray.”
Judge
Kelly: “In writing?”
Hutchinson:
“No.”
Judge
Kelly: “What else did you own?”
Hutchinson:
“I had an ownership in a device for lowering Aeroplanes by
parachute, I own stock in that.”
Judge
Kelly: “How much stock did you own in that?”
Hutchinson:
“I think about 7 or 8 thousand dollars worth.”
Judge
Kelly: “Did this stock have any market value?”
Hutchinson:
“No.”
Judge
Kelly: “Did you tell Winters what your assets were?”
Hutchinson:
“He knew.”
Judge
Kelly: “Do you mean to say your went to this man and
borrowed $5,500.00 without a scratch of the pen, or any
agreement between you?”
Hutchinson:
“Yes, he gave me the money in cash.”
Judge
Kelly: “Did you tell him when you could pay it
back?”
Hutchinson:
“No.”
Judge
Kelly: “What did you want the money for?”
Hutchinson:
“To get back east and get additional rights in the Aero
corporation.”
Judge
Kelly: “Did you have him to understand that he would
have an interest in what you acquired?”
Hutchinson:
“I don’t believe I did.”
Judge
Kelly: “Are you sure about that?”
Hutchinson:
“I can’t say, it’s so long ago.”
Judge
Kelly: “When you say to it that Mr. Winters got shares
of stock in the Beam Ray corporation you had in mind that you
owed his money didn’t you?”
Hutchinson:
“No.”
Judge
Kelly: “Were you attempting to pay your debts in any
instance, when you made these transfers of stock to Beam Ray?”
Hutchinson:
“No, I still owe the money.”
Judge
Kelly: “And these people gave it to you, without any
security?”
Hutchinson:
“That’s right.”
Judge
Kelly: “And some people say money is tight.”
Sapiro:
“Just what did you mean when you said that you considered this
money you go from Edwards as a gift?”
Hutchinson:
“Because that was our understanding.”
Sapiro:
“Aren’t these pages that I show you written in your own
handwriting?”
Hutchinson:
“They are.”
Sapiro:
“Then of course, you have seen that book before, although you
just testified that you hadn’t?”
Hutchinson:
“I hadn’t gone that far in it.”
Sapiro:
“You received some money from Reynolds on May 7th,
1938, didn’t you?”
Hutchinson:
“Yes, I think it was about that date.”
Sapiro:
“You accepted this check?”
Hutchinson:
“I did, under protest.”
Sapiro:
“When did you deposit that check?”
Hutchinson:
“I think about the next day.”
Sapiro:
“May I show you the deposit slips and let you refresh your
memory, they show the depositing of the $500.00 represented by
the Reynolds check?”
Comperet objected and was sustained, and Sapiro went about it
another way.
Sapiro:
“What date did you receive $500.00 represented by the Reynolds
check?”
Hutchinson:
“About one week after that.”
Sapiro:
“Will you look at the book and show when that amount of money
was credited to the corporation?”
Hutchinson:
“That book doesn’t mean anything to me.”
Sapiro:
“I’m showing you the account of Edwards in the book of the
Beam Ray corporation.
Hutchinson:
“If my memory is correct, the two deposit slips you showed me
are the transfers from Edwards account.”
Sapiro:
“Look in the bank book for a record of that deposit.”
Hutchinson:
“It wasn’t deposited, I used it.”
Sapiro then showed him a book in which Hutch’s name had been
written over Edwards.
Hutchinson:
“I don’t set up these books, I am not sure that they are
accurate.”
Sapiro:
“When you took Reynolds’ check, did he get any receipt for
it?”
Hutchinson:
“No.”
Sapiro:
“Did Edwards get a receipt?”
Hutchinson:
“No, not that I recall. (ditto Ernstein).”
Sapiro:
“Did you put into this book the item of $500.00 which was the
money from Reynolds?”
(missing
words)
board of directors on May 11, 1938. Will you look at the minutes
of that meeting and tell me if there is anything stated in there
about your receiving these monies?”
Comperet objected and was sustained. Sapiro continues showing
the minutes book.
Sapiro:
“Did you report the taking of these checks to the directors at
the meeting?”
Hutchinson:
“I did not.”
Sapiro:
“There was another meeting of the directors on May 25, did you
report it at that time?”
Hutchinson:
“(After studying minutes). It isn’t in there if I did.”
Sapiro named dates of later meetings of June and July.
Sapiro:
“Did you report it then?”
Hutchinson:
“No.”
Sapiro:
“When did you finally report it?”
Hutchinson: “I think it was the first meeting after
the return from the east, sometime in August.”
Sapiro:
“You were present at a meeting on July 12, it is so recorded
in the minutes, would you believe the minutes?”
Hutchinson:
“Certainly I was there.”
Sapiro then showed that Hutchinson was present at all meetings
and signed the minutes.
Sapiro:
“At the August 12th meeting you received authority
to issue some notes for these amounts?”
Hutchinson:
“That’s right.”
Sapiro:
“Did you present these notes to the various people
yourself?”
Hutchinson:
“No.”
Sapiro:
“Did you at any time ask for a return of the receipt from
Edwards in place of the note?”
Hutchinson:
“The paper returned from Edwards was not a receipt.”
Sapiro:
“What was it?”
Hutchinson: “A letter addressed to Edwards stating that I was
the owner of so many shares of stock impounded by Fickerson, and
that this stock could not be transferred or sold without the
permission of the corporation commissioner.”
Judge
Kelly: “Was anything said about money that you got
from him?”
Hutchinson:
“No.”
Judge
Kelly: “Did you purposely leave it out of the
letter?”
Hutchinson:
“No sir.”
Court adjourned for the day.
Friday June 10. Morning session. Comperet informed the court
that he was anxious to finish the suit this day as Judge Kelly
would be absent for the month of July. Also that if the fight
went on there would be nothing left to fight over. He said that
the innocent stockholders had to suffer through the actions of
Hoyland and Hutch. He said further that if Hutchinson was guilty
of any criminal action as regards stock manipulation that was a
matter for the district attorney. Judge Kelly declared that he
wanted to know just which of the stockholders were innocent.
Sapiro said that he thought he was entitled to complete the
case. Judge Kelly said that it certainly would be completed and
that Sapiro would be given every opportunity to cross-examine
the witness fully. Hutchinson then took the stand. Sapiro
started the cross-examination.
Sapiro:
“You have just stated that while you have not given a receipt
to Reynolds and other people you had given a letter?”
Hutchinson:
“That’s right.”
Sapiro:
“Was the same letter given to all of them?”
Hutchinson:
“Yes.”
Sapiro:
“Will you please repeat the contents of that letter?”
Hutchinson:
“As near as I can remember, it stated that it was impounded
with a representative of the corporation commissioner a certain
number of shares of stock in my name and that these would be
given as a gift, if and when the permission of the corporation
commissioner was secured.”
Sapiro:
“Have you go these letters?”
Hutchinson:
“No.”
Sapiro:
“Do these letters make any mention of the fact that you
received money from these people?”
Hutchinson:
“Not that I remember.”
Sapiro:
“Did it mention the number of shares?”
Hutchinson:
“Yes.”
Sapiro:
“Was the number computed at the value of the stock?”
Hutchinson:
“Yes.”
Sapiro:
“Who signed these notes?”
Hutchinson:
“I did.”
Sapiro:
“Then you did not have any signed by the corporation from the
date when they gave you the money in May until August/”
Hutchinson:
“Nothing that I recall.”
Judge
Kelly: “I understand that these shares were gifts, yet
it seems that with regard t the Ernsteins, the number of shares
were proportionate to the amount of money they put in, was that
accidental?”
Hutchinson:
“I would say that it was.”
Sapiro:
“Do you have in mind what Mr. Reynolds had on his check where
it was endorsed, and said for fifty shares of stock?”
Hutchinson:
“I do.”
Sapiro:
“Now regarding application number 6, do you recall what that
is?”
Hutchinson:
“500.”
Sapiro:
“And he paid you $5,500.00?”
Hutchinson:
“No, $6,250.00. He made me a loan.”
Sapiro:
“Well, it went to you personally?”
Hutchinson:
“I received it personally.”
Sapiro:
“Did you put any of it in the treasury of the corporation?”
Hutchinson:
“Only indirectly?”
Sapiro:
“have you put it in indirectly?”
Hutchinson:
“I was doing work for the organization, traveling around the
country trying to arrange for the courses.”
Sapiro:
“At the time Winters gave you the money, did the corporation
own any courses?”
Hutchinson:
“No.”
Sapiro:
“No contract was turned over to the corporation until the
first of June, 1937, is that correct?”
Hutchinson:
“I can’t say until I see the contract.”
Sapiro:
“Out of your own memory you can’t say that?”
Hutchinson:
“No.”
Sapiro:
“Just when did the directors authorize you to keep the $500.00
you held out?”
Hutchinson:
“Well it was sometimes prior to accepting the money, sometime
prior to May, as individuals.”
Sapiro:
‘I mean the directors of the board, and you know very well
what I mean.”
Hutchinson:
“Officially at the August meeting, I should say.”
Sapiro:
“You said that they said that was to enable you to entertain
the British.”
Hutchinson:
“Yes.”
Sapiro:
“But the British had already 1 left the country over two
months ago, when did you leave for your vacation?”
Hutchinson:
“Some time before the middle of May.”
Sapiro:
“But they left before you didn’t they?”
Hutchinson:
“Oh they went visiting around.”
Sapiro:
“You knew they were not here where you could entertain
them?”
Hutchinson:
“That’s right.”
Sapiro:
“When did you get your note?”
Hutchinson:
“I think that was the note that was approved by the board of
directors.”
Sapiro:
“Who drew up the application you have before you?”
Hutchinson:
“Mr. Fickerson.”
Sapiro:
“Under instructions from you?”
Hutchinson:
“No, at the request of Mr. Glenn.”
Sapiro:
“Did you give him the data?”
Hutchinson:
“Part of it.”
Sapiro:
“You mentioned Mr. Henderson, who to act as Vice President, so
you allotted some stock to his wife for that reason.”
Hutchinson:
“No, that was not the reason.”
Sapiro:
“You said that you could not get any lessons from the Virginia
Aero corporation and you had to drop it?”
Hutchinson:
“No, we got them from the other series.”
Sapiro:
“You say that you didn’t testify that you didn’t drop
these Virginia lessons?”
Hutchinson:
“I said that we dropped trying to get the course.”
Sapiro:
“You never got any Virginia fees for lessons did you?”
Hutchinson:
“We received some signed contracts and some deposits which
were either all returned or waived.”
Sapiro:
“You spoke of money advanced to you by Mr. Fickerson,
weren’t you to be paid from tuition fees when received?”
Hutchinson:
“I don’t remember that.”
Sapiro:
“According to the little book the Finch lean was made to
whom?”
Hutchinson:
Mr. Cullen.”
Sapiro:
“What was the item as I read it (marked here $437.27 cash
C.R.H., initials), a loan made by Finch $500.00, is that
correct?”
Hutchinson:
Yes, with this explanation, I had endorsed the note and assumed
the obligation.”
Sapiro:
“Why was the note made to Cullen and not to you?”
Hutchinson:
“Because I was in Kansas City waiting for Cullen to join me to
go back to Virginia to try and secure the additional territory
we wanted and some money was needed for personal expenses, money
that he had for the trip, he paid part of the bills.”
Sapiro:
“How much did you get of that money?”
Hutchinson:
“None.”
Sapiro:
“So that where it says that in the book, that’s not
correct?”
Hutchinson:
“I didn’t set up the item in the books, I did not receive
cash. I accepted in its place the responsibility of the
obligation.”
Sapiro:
“You testified regarding the transaction on the Belger stock.
In connection with that I show you a letter addressed to Mr. Van
Wort, and I ask you if that is your signature on that letter?”
Hutchinson:
“Yes.”
Sapiro:
“What interest in stock had you conveyed to Mr. Belger, or
rather, you had made an agreement to give certain stock to
Belger?”
Hutchinson:
“I did.”
(missing words)
Hutchinson:
“Yes, we needed money for advertising, etc.”
Sapiro:
“Y.A.S. was owned by you personally wasn’t it?”
Hutchinson:
“Yes.”
Sapiro:
“Did you draw money out of this account for yourself
personally?”
Hutchinson:
“No, for the organization.”
Morning recess called. Recess.
Friday, June 30, Hutchinson on the stand. Sapiro examining.
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