1939 Beam Ray Trial Transcript

 

Pages 81-90

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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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