Seminole Nation v. United States

The third claim for reimbursement was disallowed upon the finding that the annual interest from the trust fund established under the Treaty of 1866 was, in fact, directed to its designated purpose (support of local schools).

The fourth claim is also in reference to the Treaty of 1866, which provided additionally that the Government construct, "at an expense not exceeding ten thousand ($10,000) dollars, suitable agency buildings' on the Seminole reservation."

The second claim concerned language from Article VIII of the Treaty of 1856 which provided that the government would establish a $500,000 trust fund with the annual interest to be distributed equally among the individual members of the Seminole Tribe.

The Court found merit to this claim and cited "a well established principle of equity that a third party who pays money to a fiduciary for the benefit of the beneficiary, with knowledge that the fiduciary intends to misappropriate the money or otherwise be false to his trust, is a participant in the breach of trust and liable therefore to the beneficiary."

The Commissioner of Indian Affairs received reports as early as 1870 discussing the unjust distribution of funds, "recommend[ing] that the provisions of the treaty be rigidly enforced[.]"

It was documented that the Commission of the Five Civilized Tribes notified Congress and the Secretary of the Interior of the rampant corruption throughout tribal governments before the payments were made to the Seminole treasurer.

More pointedly, the Secretary of the Interior and the Commissioner of Indian Affairs were informed in January 1898 of "complaints of misgovernment, venality, and fraudulent conduct on the part of Seminole leaders[.]"