Creditors' Remedies

If credit is to be extended to borrowers, a legal system for collection of debts must be in place. The Bogus Legislature enacted a complete code of commercial law, based almost entirely on Missouri statutes, which were themselves, in large part, a codification of common law.

Frontier Law Suit

"Puzzled Witness"
George Caleb Bingham, 1874

The Missouri statute was enacted codifying the common law right of a creditor to seize a debtor's property to secure a judgment or to sell in satisfaction of a judgment. [Council Journal, 60]
This common law action for repossession of personal property wrongfully taken, giving the creditor the right to give security and hold the property until a court decides ownership, was statutory in Missouri and became so in Kansas Territory. [House Journal, 172]
Missouri statutes provided for recovery of personal property wrongfully taken by a creditor having an immediate right to the property and desiring specific restitution but not damages for the taking. The legislature adopted the Missouri law. [House Journal, 249]
The common law and the Missouri statute adopted by the legislature provided for suits brought by an owner of real property to remove a party unlawfully occupying the property under a claim of right, but not as a tenant. [House Journal, 241]
A debtor's right to raise a counter claim to reduce a debt owed by any sum the creditor owes the debtor was recognized. [House Journal,171]
Exemptions from Executions
The legislature, following common law and Missouri statutes, exempted certain kinds of property from the items a creditor could attach to satisfy a debt. [Council Journal, 186]
Homestead Exemption
The legislature modified the Missouri homestead exemption only slightly, adding work tools. [House Journal, 198] The final bill had a traditional monetary limit ($500) on the exemption, unlike the later Wyandotte Constitution of 1859 that exempted a "homestead to the extent of one hundred and sixty acres of farming land, or of one acre within the limits of an incorporated town or city, occupied as a residence by the family of the owner, together with all the improvements on the same," with no value limit. [Stone, Kansas Laws, 935, ff.] The controversial Kansas Homestead Exemption continues to this day. Only Texas, Florida, Iowa, South Dakota and Kansas provide an unlimited dollar amount homestead exemption.
Exempting Slaves from Executions
The majority report on a bill to exempt slaves from sale under execution, written by Mobillion McGee, argued that slave owners would be encouraged to come to Kansas, knowing their slaves could not be seized for debts. McGee further argued the humanity of the bill that prevented the potential breakup of slave families. The minority report, written by Joseph Anderson, argued that exemption of one kind of property was discriminatory and likely to lead to sequestering money in slaves instead of repaying valid debts. [House Journal, 399-402] The full house rejected the exemption on a motion by Anderson. [House Journal, 348]
Relief of Debtors
In a system preceding bankruptcy law, a debtor's financial affairs could be reorganized to continue existence of a financial entity. The Missouri law was slightly modified. [House Journal, 284]
Mechanics liens
Statutory liens to secure payment for labor and material supplied in improving, repairing real or personal property were established as in Missouri. [House Journal, 225]
Common Law as the Rule of Action
The legislature, after some debate, adopted the common law, the law derived from judicial decisions, as the set of rules governing procedure in civil suits. [Council Journal, 90]
Arbitrations and References
The legislature adopted the Missouri rules for sending matters to arbiters and referees by agreement of the parties or court order for information, consideration or decision. [House Journal 224]
The common law regulating the ownership of imperiled property rescued by the claimant was adopted. [House Journal, 262]
Lost Money and Goods
The common law defined rights of owners of "lost" property, no longer possessed because of accident, negligence or carelessness, that could not be found by an ordinary, diligent search. "Abandoned" property voluntarily surrendered or disclaimed, and "mislaid" property, voluntarily relinquished with intent to recover it later, were categories with different consequences. The legislature adopted these rules [House Journal, 149]
Fraudulent Conveyances
Transfers of property for little or no consideration, made for the purpose of hindering or delaying a creditor by putting property beyond his reach, were voidable under the common law and the Missouri statute adopted by the legislature. [House Journal 198]
Bonds and Notes
The Missouri statute was adopted, only slightly modified by dropping one section. [House Journal, 152] A bond is a written promise to pay money or do some act if certain circumstances occur or a certain time elapses. A note is a written promise by one party to pay money to another party or to a bearer. A note is a two party negotiable instrument, unlike a draft, which is a three party instrument.
Debtors and Sureties
The Missouri statute was adopted that governed the right of creditors to collect on the collateral given or pledged by a surety to guarantee repayment by a debtor. [House Journal 248]
Contracts and Promises
The law on formation and enforcement of mutual promises of performance was codified. [House Journal, 194] A statute of limitations was set for "an action upon a contract, obligation or liability, expressed or implied, (which) must be commenced within three years." [1855 Statutes, Section 4] In Morton v Sharkey, Territorial Cases 113 (June Term, 1860) [McCahon], Judge Elmore pointed out that the statute was not clear on the question "from what time the three years begin to run, whether from the accruing of the action, or from the taking effect of the act?" The court concluded the legislature intended to give three years from the effective date of the statute, thereby barring actions after September 1, 1858 on contractual obligations alleged to be in default when the statute was enacted.

Charles Clark