The Kirtland Safety Society has long been the source of research and debate within the historical community. Most commentators agree that the Safety Society was an imprudent venture. Some have even argued that its failure marked an almost fatal blow to Joseph Smith’s leadership. Charges of personal gain and illegality are sometimes included in their critique. In addition to the good work done by many scholars, there is more to be said about the legal history of the Kirtland Safety Society. This article seeks to provide a more thorough analysis of the legal establishment of the Society and the challenges to it in court than has been provided before. To do so, this article will be separated into four parts.

Part I will provide a necessary background of information about the economy in nineteenth-century America and particularly in Kirtland, Ohio, that gave rise to the organization of the Society, shedding new light on how it fit into the broader national financial landscape. After the closure of the Second Bank of the United States, more local banks arose to take its place. The Kirtland Safety Society was originally proposed as a chartered bank, and Orson Hyde tried but failed to have the Ohio legislature charter it, due principally to political dynamics. The Society was then reorganized as a joint stock company. Church leaders also acquired a controlling interest in the Bank of Monroe in Michigan and apparently hoped to have the Society operate under that bank. Knowing how it was legally established informs our understanding of the legal challenges it later encountered.

Part II examines the events—nationally, locally, and internally—that led to the failure of the Kirtland Safety Society. This part explains how the Panic of 1837 impacted the entire Ohio valley financial community, including Kirtland, as well as the Bank of Monroe. This national financial crisis is placed in context with the leadership crisis that emerged during this same time within the LDS Church, aimed principally at Joseph Smith. Disaffection led some participants in the bank to withdraw funds from the Society, whether innocently or maliciously, that contributed to the bank’s final collapse. But other key directors of the bank and partisans in Kirtland committed what can only be viewed as malfeasance, resulting in Joseph Smith affirmatively disassociating himself from the Society in August 1837.

Part III then provides a detailed analysis of the only lawsuit brought against Joseph Smith and other leaders over the operations of the Safety Society. Grandison Newell, by his admitted straw man, Samuel Rounds, brought this suit in early February 1837. The suit was premised on the claim that operating the bank without a charter violated an Ohio banking act enacted in 1816. Under that act each such operator was subject to a $1,000 fine. This part provides an assessment of the legal merits of this claim and of the defense raised by Smith’s legal counsel that the 1816 act was not in force at any time relevant to the Kirtland Safety Society. Finally, this part details the legal outcome of the case in the entry of judgments against Smith and Sidney Rigdon, in Newell’s collection efforts, and in the final settlement of the case.

Part IV goes on to show how Grandison Newell continued his campaign against Joseph Smith and revived the judgment in 1860, even though it had been previously settled. Newell then used the revived judgment to open probate proceedings against Joseph Smith’s estate using Newell’s own grandson-in-law as the executor of Smith’s estate. Newell partnered with William Perkins, who was Joseph Smith’s legal counsel during the underlying lawsuit, and manipulated the probate proceedings to acquire title to the Kirtland Temple more than twenty years after Smith had left Kirtland and fifteen years after his death. Finally, this part will examine whether it was legally proper to include the Kirtland Temple as part of Joseph Smith’s estate subject to the collection efforts pursued by Newell and Perkins. These legal proceedings played a central part in the Reorganized Church of Jesus Christ of Latter Day Saints’ first legal claim of ownership to the Kirtland Temple.

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Epilogue

The Kirtland Temple is often viewed as the highest point of the Mormon experience in Kirtland, Ohio. The Kirtland Safety Society has been viewed as the lowest. And yet these two divergent experiences are connected in a most unlikely way. No longer can it be genuinely debated whether or not the legal proceedings brought by Grandison Newell’s straw man, Samuel Rounds, against the directors of the Safety Society were legally flawed. Indeed, they were brought under an 1816 statute regarding the issuance of banknotes that had been suspended in 1824. The remedy sought under that 1816 statute was thus legally unavailable. Nevertheless, and on that ground alone, judgments were entered by a trial court against Joseph Smith and Sidney Rigdon in October 1837.

No legal actions were brought against any officers or directors of the Safety Society for fraud, negligence, or breach of fiduciary duty. Indeed, the directors made concerted efforts to shore up the Society, as banks were failing all over the country. Notice had been given to the public that the Society was not operating as a bank chartered by the legislature of the state of Ohio but rather was operating as a joint stock company, another regular legal form of business, similar to a general partnership. After the many consequences of the 1837 economic downturn, and fearing for their safety, Smith and Rigdon left Kirtland the night of January 12, 1838. Most Mormons left Kirtland by the following summer, leaving the recently finished Kirtland Temple behind. Smith and Rigdon left agents in Kirtland who settled the judgments with Grandison Newell and all other creditors who came forward.

Lacking a clear owner, the Kirtland Temple started to fall into disrepair in the 1840s. Then, based on several misrepresentations, Newell managed to get a personal favor pushed through the Ohio House of Representatives in 1859, even though he had failed to pay the state its portion of his recovery back in 1838. With the 1859 Act in hand, Joseph Smith’s perpetual nemesis then fraudulently revived the judgment more than fifteen years after Joseph Smith had been murdered in Illinois and the majority of the Mormons had trekked to the Great Salt Lake Basin. Unlawfully using yet another straw man, this time as supposed administrator of Joseph Smith’s estate, and without giving direct notice to survivors of Joseph Smith’s family or to other creditors, Grandison Newell then laid claim to the Kirtland Temple Property, even though Joseph Smith was not in its chain of title. In 1862, the property was then sold to William Perkins, who had been Joseph Smith’s lawyer in the 1837 litigation and who now was actually in partnership with Newell; he purchased the property at auction, bidding the exact minimum two-thirds of the appraised value. These miscarriages of justice and other unethical actions resulted in the Kirtland Temple being sold on a credit bid for $217 and then resold the same day for $150 to a local citizen, with the land being sold a year later for an additional $150. This new owner worked to save the temple for more than a decade until he sold it to Joseph Smith’s oldest son. The Reorganized Church of Jesus Christ of Latter Day Saints, under Joseph Smith III’s leadership, would thereafter preserve the Kirtland Temple.

Today the Kirtland Temple is owned and cared for by the Community of Christ. It stands as a monument to the early Saints of Kirtland. It is said that the Kirtland Temple is the most costly temple relative to the poverty of those that built it. That cost included all that was lost with the failure of the Kirtland Safety Society.