Edwin B. Firmage and Richard Collin Mangrum discuss the Kirtland Bank and the lawsuit against Joseph and Sidney Rigdon.
Edwin Brown Firmage and Richard Collin Mangrum, Zion in the Courts: A Legal History of the Church of Jesus Christ of Latter-day Saints, 1830–1900, (Urbana: University of Illinois Press, 1988), 56–58
During the hearing Luke Johnson, Mr. Whitney, Warren Parrish, Mr. Hyde, and Solomon Denton testified for the prosecution, while Hyrum Smith, Mr. Cahoun, and Sidney Rigdon, among others, testified for the defense. The hearing concluded with Justice Flint requiring Joseph Smith to post a $500 bond to keep the peace, pay Mr. Rigdon, Mr. Hyde, and Mr. Denton $50 witness fees, and appear for trial at the next term of the Court of Common Pleas. On 9 June 1837 the case went to trial before Justice Humphrey of the Court of Common Pleas; the court discharged Joseph on the grounds of the insufficiency of the evidence. Commenting on both proceedings, the Painesville Republican carried the following report:
I attended the trial and took down the evidence, but was much surprised to find that no testimony appeared, on which, any reliance could be placed, that went in the least degree to crimination [sic] the respondent, but rather to raise him in the estimation of men and candor. But the Justice of the Peace who had been selected to try the question, decided otherwise, and Mr. Smith was held to bail in the sum of $500, to appear at the Court of Common Pleas, at the next term, which commenced the Monday following, being last week. The trial again came on before the County Court, on Friday last, and resulted in the entire acquittal of Joseph Smith, Jr. of the charges alleged against him. This is said to be the thirteenth prosecution which has been instituted against Joseph Smith, Jr. for the prejudice against him, he has never in a single instance been convicted, on a final trial. This fact shows on the one hand, that a spirit of persecution has existed, and on the other hand it certainly furnishes some evidence that he has for some reason, been falsely accused, and that he is indeed and in truth better than some of his accusers.
This newspaper account suggests that Joseph by this time had defended a number of questionable claims. The fact he successfully prevailed and that the reporter was favorably impressed demonstrates that religious prejudice was not so pervasive as to make fair trials impossible.
Criminal actions stemming from violations of state banking laws presented the most serious threat to Joseph's status in Kirtland. In March 1837, Joseph Smith, as treasurer, and Sidney Rigdon, as secretary of the ill-fated "Kirtland Safety Society," were arrested on charges of violating the banking laws of Ohio. Samuel D. Rounds entered a suit on behalf of himself and the state of Ohio, demanding from each a penalty of one thousand dollars. Identical suits were also filed by Rounds against Warren Parrish, Frederick G. Williams, Newell K. Whitney, and H. Kingsbury in their capacities as officers in the Kirtland Safety Society. All six suits were originally scheduled to be heard 21 March 1837—at the March term of the Court of Common Pleas—but the suits were continued until the June term, apparently on the court's own motion.
At the June term, the six cases came before the court on a "demurrer to the declaration of the plaintiff," which was overruled by the court with costs to the plaintiff. However, on motion of the defendant, leave was given to amend, and it was ordered by the court that the cases be continued to the October term. At the October term the suit against Warren Parrish was discontinued by the plaintiff, and the court nonsuited the plaintiff in the case against Frederick G. Williams, Newell K. Whitney, and H. Kingsbury for failure to prosecute the suit; in all four cases costs were awarded to the defendants. The suits against Joseph Smith and Sidney Rigdon, however, were tried before a twelve-person jury, which found them guilty. Although Joseph Smith and Sidney Rigdon appealed the decision, the case was never ruled on because both left the state before it could be heard.
At the same term the court denied another case involving the Kirtland Safety Society. In that case, Joseph Smith had assigned a promissory note for $100 from Edson Barney, Royal Barney, Jr., and Truman O. Angell to Henry C. Skinner. When Skinner sued to enforce the note, the three signers defended on the grounds that the note was invalid for want of consideration because Joseph Smith had originally given Kirtland Safety Society bills in return for the promissory note. The court rejected that argument, holding that the promissory note was enforceable. In a separate action, Sarah Cleveland was committed to Niagara jail for passing $390 in Kirtland Safety Society bills with intent to defraud. She was subsequently released on bail.
Joseph Smith recorded the circumstances of a "vexatious lawsuit" initiated 27 July 1837:
When we arrived at Painesville we were detained all day by malicious and vexatious law suits. About sunset I got into my carriage to return home to Kirtland; at this moment the sheriff sprang into the carriage, seized my lines, and served another writ on me, which was sworn out by a man who had a few weeks previously brought a new fashioned cooking stove to Kirtland, and prevailed on me to put it in my kitchen, saying it would give credit to his stove, wishing to have it tested by our people; and now he thought would be a good time to get pay for it. I gave my watch to the officer for security and we all returned home.
The final days in Kirtland were colored by a constant flow of debt-collection litigation. For example, on 24 October 1837, Van R. Humphrey, president of the Court of Common Pleas in Geauga County, Ohio, agreed to a stipulation to discontinue a suit for $295 against Sidney Rigdon, Joseph Smith, and Oliver Cowdery by John Newbold, awarding costs to the plaintiff. On 7 December 1837 Joseph recorded that "one printing establishment was attached to satisfy an unjust judgment of the county court." On 15 September 1838 the Geauga courthouse filed a statement that a $10,071.48 judgment against Joseph Smith and Reynolds Cahoon, in favor of Charles Holmes, had been satisfied. And on 24 June 1839, the Kirtland sheriff returned the execution on a judgment for $1,186.66 against Joseph Smith in favor of Winthrop Eaton as "unsatisfied for want of property." In this same vein the local newspapers recorded notice after notice of mortgage foreclosures entered against the Saints.
From the June term of 1837 through the April term of 1839, seventeen lawsuits were brought against Joseph Smith in the Geauga County court for debt involving original claims of $30,206.44. Four of these suits were settled; three were discontinued voluntarily by the plaintiffs; and ten resulted in judgments; three were satisfied in full, three were satisfied in part; and four were wholly unsatisfied.
One must conclude from a consideration of the failure of the Kirtland Safety Society that Mormon leadership exhibited extraordinarily bad judgment, and poor understanding or concern over the banking laws. But there is no evidence that this was a "scam." No self-enrichment was evident as a motivating factor. No subterfuge against would-be investors took place. Whether justified or not, the members of the priesthood leadership who suffered the brunt of the financial assault were convinced that they had been unfairly condemned.
The Saints left Ohio as a financially beaten community. The Society episode embarrassed Joseph Smith and cost him many of his closest supporters. The Saints had experienced a brief pinnacle of success and acceptance in Ohio; in the end, however, they departed in shame and disappointment. Although there is little evidence of unfairness or religious persecution in the judicial proceedings commenced against the Saints, persistent and expensive litigation must have frustrated many, especially Joseph Smith. With the exodus of 1838, church leadership and the majority of the Saints left financial disaster in Ohio only to face militant hostilities in Missouri.