Source: https://www.legalcrystal.com/case/97317/seminole-nation-vs-united-states
Timestamp: 2017-02-25 18:49:54
Document Index: 474576852

Matched Legal Cases: ['§ 11', '§ 19', '§ 901', '§ 321', '§ 321', '§ 441', '§ 445', 'art:\n28']

Seminole Nation Vs United States - Citation 97317 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Seminole Nation Vs. United States - Court Judgment	LegalCrystal Citationlegalcrystal.com/97317CourtUS Supreme CourtDecided OnMay-11-1942Case Number316 U.S. 286AppellantSeminole NationRespondentUnited StatesExcerpt:
seminole nation v. united states - 316 u.s. 286 (1942)
1. a claim against the government by the seminole nation, based on article viii of the treaty of august 7, 1856, whereby the government undertook to provide a certain sum annually for ten years, to be used for specified purposes, but which, in the amount claimed, was diverted to the clothing and feeding of refugee indians,
to have been released by article viii of the treaty of march 21, 1866, and properly disallowed by the court of claims. p.
316 U. S. 290
2. Payment by the Government to the tribal treasurer of the Seminole Nation, of certain amounts which, by Article III of the Treaty of 1866, the Government agreed to pay for the support of schools, satisfied the obligation of the Treaty and defeats recovery, whether payment to the tribal treasurer was authorized or not, since the schools actually received the benefit of the payments. P.
316 U. S. 292
3. Under § 11 of the Act of April 26, 1906, a sum due under Article III of the Treaty of 1866, was in 1907 properly paid by the Government to the United States Indian Agent for the Seminoles. P.
4. A provision in Article VI of the Treaty of 1866 whereby the Government undertook to construct at a cost not exceeding $10,000 "suitable agency buildings" on the Seminole reservation,
not breached. P.
316 U. S. 293
5. In respect of a claim of the Seminole Nation based on the Government's obligation, under a provision of Article VIII of the Treaty of 1856, to establish a trust fund in a specified amount and to pay the interest therefrom to the members of the Seminole Nation per capita as an annuity,
(a) The Court of Claims properly deducted the amount of overpayments found to have been made by the Government in certain years. P.
316 U. S. 294
(b) Under the Act of 1906, which was not repealed by the jurisdictional act, payments in 1907, 1908, and 1909 were properly made to the United States Indian Agent for the Seminoles. P.
(c) As to payments made from 1870 to 1874 directly to the tribal treasurer and to designated creditors, pursuant to requests of the Seminole General Council, the Court of Claims should have made findings, since the issue was material, as to whether the General Council, during the years in question, was corrupt, venal, and false to its trust; whether, if such were the fact, it was known to the administrative officers of the Government charged with the disbursement of Indian moneys, and whether the Seminole Nation received the benefit of any of the payments. This branch of the case is remanded to the Court of Claims in order that the essential findings of fact may be made. Pp.
316 U. S. 300
6. Certain payments made by the Government to the tribal treasurer of the Seminole Nation, after the passage of the Curtis Act of June 28, 1898,
not to have contravened § 19 of that Act, since that section forbade only payments to tribal officers which were to be
distributed by them to individual members of the tribe. However, this branch of the case also is remanded to the Court of Claims for further findings as to whether, from 1899 to 1907, tribal officers were mulcting the Seminole Nation; if so, whether administrative officers of the Government disbursing moneys to the Seminoles had knowledge thereof, and whether the Seminole Nation received the benefit of payments made to the tribal treasurer. Pp.
316 U. S. 301
316 U. S. 307
7. In respect to amounts which were expended gratuitously by the Government for the benefit of the Seminole Nation, and which, under Act of August 12, 1935, may be offset against the Government's liability,
that the Court of Claims should find and designate the precise expenditures to be used as offsets, instead of finding generally all the items which the Government may ever be entitled to use. P.
316 U. S. 308
This suit to adjudicate certain claims of the Seminole Nation against the United States growing out of various treaties, agreements, and acts of Congress is now before us for the second time. After we reversed,
U.S. 417, for want of jurisdiction in the Court of Claims a previous
judgment of that court awarding the Seminole Nation $1,317,087.27, [
] the jurisdictional barrier was removed by statute, [
] and the Seminole Nation then filed a second amended petition in the Court of Claims reasserting the six items of claim previously denied by this Court on jurisdictional grounds. [
] The Court of Claims thereupon disallowed three items in their entirety, allowed one in full and allowed the remaining two in part, deciding that the Seminole Nation was entitled to $18,388.30, against which the United States was entitled to gratuity offsets in the amount of $705,337.33. [
] Accordingly, the second amended petition was ordered dismissed. [
] We granted certiorari on a petition challenging the correctness of the decision below on each of the five items disallowed in whole or in part, and as to numerous items which the court included in its list of gratuity offsets. 314 U.S. 597.
The Court of Claims correctly disallowed the balance of this Item. During the twenty-three years from 1875 to 1898, the annual payments, amounting in all to $57,500, were paid directly to the tribal treasurer. Since that official disbursed annually not less than $2,500 in excess of amounts he was otherwise obligated to expend for the maintenance of schools, [
] there is no need to inquire whether payment to that official was authorized. The schools actually received the benefit of the money. That satisfied the obligation of the Treaty, and defeats recovery.
The remainder of this Item, $750, was paid to the United States Indian Agent for the Seminoles in 1907. Such payment was proper under Section 11 of the Act of April 26, 1906, c. 1876, 34 Stat. 137, 141, [
] and nothing in the
applicable jurisdictional act [
] indicates any intention on the part of Congress to override or repeal the Act of 1906.
The Government agreed in Article VI of the Treaty of 1866 to construct, "at an expense not exceeding ten thousand ($10,000) dollars, suitable agency buildings" on the Seminole reservation. In 1870 and 1872, $931.76 was expended for agency buildings and repairs. Petitioner's claims for the difference of $9,068.24 between this sum and $10,000 is without merit. In 1872, Congress appropriated $10,000 to fulfill this treaty obligation; [
] $9,030.15 of this appropriation was expended for some undisclosed purpose, as only $969.85 was returned to surplus. The Court of Claims found that an agency building was erected on the Seminole reservation in 1873. [
] Petitioner makes no claim that the building erected was unsuitable. Since the Government's promise was not to expend $10,000, but to erect suitable buildings at a cost not in excess of $10,000, it follows that there was no violation of the treaty provision, and hence no right of recovery.
The overpayments were rightly deducted,
cf. Wisconsin Central R. Co. v. United States,
, and petitioner does not contend otherwise. Nor is petitioner entitled to any part of the $62,500 paid directly to the Indian Agent, for such payments were proper under the Act of 1906, 34 Stat. 137, 141, which, as pointed out in the discussion of Item Three,
was not repealed by the jurisdictional act, 43 Stat. 133. There is thus left for consideration only the payments from 1870 to 1874 made pursuant to requests of the Seminole General Council and totaling $66,422.64; of this amount $37,500 was
It is 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 therefor to the beneficiary.
Manhattan Bank v. Walker,
Bogert, Trusts and Trustees (1935), vol. 4, §§ 901, 955; Scott, Trusts (1939), vol. 3, § 321.1; American Law Institute, Restatement of the Law of Trusts (1935), § 321. The Seminole General Council, requesting the annuities originally intended for the benefit of the individual members of the tribe, stood in a fiduciary capacity to them. Consequently, the payments at the request of the Council did not discharge the treaty obligation if the Government, for this purpose the officials administering Indian affairs and disbursing Indian moneys, actually knew that the Counsel was defrauding the members of the Seminole Nation.
Furthermore, this Court has recognized the distinctive obligation of trust incumbent upon the Government in its dealings with these dependent and sometimes exploited people.
30 U. S.
316 U.S. 681. In carrying out its treaty obligations with the Indian tribes, the Government is something more than a mere contracting party. Under a humane and self-imposed policy which has found expression in many acts of Congress [
numerous decisions of this Court, it has charged itself with moral obligations of the highest responsibility and trust. Its conduct, as disclosed in the acts of those who represent it in dealings with the Indians, should therefore be judged by the most exacting fiduciary standards. Payment of funds at the request of a tribal council which, to the knowledge of the Government officers charged with the administration of Indian affairs and the disbursement of funds to satisfy treaty obligations, was composed of representatives faithless to their own people and without integrity would be a clear breach of the Government's fiduciary obligation. [
] If those were the circumstances, either historically notorious so as to be judicially noticed or otherwise open to proof, when the $66,422.64 was paid over at the request of the Seminole General Council during the period from 1870 to 1874, the Seminole Nation is entitled to recover that sum, minus such amounts as were actually expended for the benefit of the Nation by the Council.
Claims had jurisdiction of this issue, for such an action for breach of fiduciary duty growing out of treaty obligations is clearly an equitable claim within the meaning of the jurisdictional act, 43 Stat. 133, the court did not consider, and hence made no findings on, this issue. We think the issue material. During the period in question, 1870-1874, the administration of Indian affairs and the disbursement of Indian moneys were lodged with the Department of the Interior. The Commissioner of Indian Affairs, under the general supervision of the Secretary of the Interior, actively supervised these matters. [
] There are ample indications in the record before us that the Seminole General Council was mulcting the Nation, and that the proper Government officials may well have had knowledge thereof at the time some, at least, of the payments were made. For about this time, the Commissioner of Indian Affairs received several warnings from his subordinates that "injustice to the majority" of the Seminoles existed, [
] that the chiefs were in the habit "of taking out what amount they
chose" from the annuities, [
] that the Seminoles were "in bad hands," [
] and that the chiefs intended "to "gobble" the next money for the purpose of keeping up their government." [
] And the Acting Commissioner of Indian affairs was evidently aware in 1872 of the possibility that the Council was faithless, for he declined to change the method of payment at the request of the Seminole Chiefs
Department shall be fully satisfied that a proper disposition will be made of the funds if paid in the manner proposed by the Chiefs. [
We do not say that all this establishes liability on the part of the Government, for it is not our function, in reviewing judgments of the Court of Claims, to make basic findings of fact. When the Court of Claims fails to make findings on a material issue, it is proper to remand the case for such findings.
Cf. Universal Battery Co. v. United States,
281 U. S. 580
281 U. S. 584
-585. We do think, however, that the matter outlined above was sufficient to require the Court of Claims to make findings on this material issue -- that is, findings as to whether the Seminole General Council, during the years 1870 to 1874, was corrupt, venal, and false to its trust; whether the appropriate Government officials charged with the duty of administering Indian affairs and disbursing funds to the Seminoles knew of that corruption, venality, and faithlessness, if such in fact existed, when any of the payments in question were made at the request of the Council; and, if so, whether the Nation received the benefit of any of those payments. Accordingly, this phase of the case must be remanded so that the Court of Claims can consider such relevant evidence and other data as may be brought to its attention, make the necessary findings of fact, and thus determine whether this case fits into the rule which we have enunciated.
This is a claim for the moneys, $864,702.58 in all, paid to the Seminole tribal treasurer after the passage of the Curtis Act of June 28, 1898, c. 517, 30 Stat. 495, 502. The payments were made during the fiscal years 1899 to 1907, and consisted of the following items: (a) $212,500 paid to discharge the per capita obligation under Article VIII of the Treaty of 1856 (
); (b) $29,750 paid to discharge the obligation of Article III of the Treaty of 1866 providing for the support of schools (
) and for the support of the Seminole Government; (c) $622,156.87 paid pursuant to Section 12 of the Act of March 2, 1889, c. 412, 25 Stat. 980, 1004, providing for the payment of interest at five percentum per annum on $1,500,000 "to be paid semiannually to the treasurer of said nation;" and, (d) $295.71, the "proceeds of labor."
the payments contravened Section 19. The text of that section and its legislative history demonstrate that it prohibits only payments to tribal officers which are "for disbursement" --
payments to be distributed by them to members of the tribe. If the first clause of Section 19 is construed as prohibiting all payments to the tribe or its officers, then the later clauses, providing only for payments to members and per capita payments, are inadequate to dispose of the problems raised by the first clause. For then no provision is made for the expenses of maintaining and conducting the tribal government, despite the fact that the Seminole tribal government was not only to continue after the Curtis Act, but was in fact relieved of the necessity of securing Presidential approval of its legislation [
] by an agreement ratified three days after the passage of that statute.
30 Stat. 567, 569. Section 19, as originally introduced in the House, provided that payments of "all expenses incurred in transacting their business" were to be made under the direction of the Secretary of the Interior. [
] The deletion of this clause is persuasive that Congress intended that tribal officers should retain the right to disburse their funds for the expenses of their respective tribal governments. For these reasons, we think Section 19 prohibits payment by the Government to the tribal
for consideration the fiduciary duty of the Government, as discussed in Item Two,
During this period, 1899 to 1907, as from 1870 to 1874, the Secretary of the Interior and the Commissioner of Indian Affairs supervised Indian matters and the disbursement of Indian moneys. Apparently it was the practice of the Department of the Interior to deposit the Seminole funds with the Assistant Treasurer of the United States at St. Louis to the credit of the tribal treasurer; the Indian agent for the Five Civilized Tribes did not disburse the Seminole payments, although he did distribute moneys to the other tribes. [
] Shortly before the payments in question were made, the Commission to the Five Civilized Tribes [
] pointedly described in its annual reports to the Secretary of the Interior and Congress the unbridled corruption of the various tribal governments, without singling out any particular government for unenviable distinction. Thus:
to appropriate to their own exclusive use almost the entire property of the Territory of any kind that can be rendered profitable and available. [
"The Commission is compelled by the evidence forced upon them during their examination into the administration of the so-called governments in this Territory to report that these governments, in all their branches, are wholly corrupt, irresponsible, and unworthy to be longer trusted with the care and control of the money and other property of Indian citizens, much less their lives, which they scarcely pretend to protect. [
While these warnings were of a general nature, specific complaints of misgovernment, venality, and fraudulent conduct on the part of the Seminole leaders were brought to the attention of the Secretary of the Interior and the Commissioner of Indian Affairs. By a letter to the Secretary of the Interior, dated January 24, 1898, certain Seminoles remonstrated against the ratification of the agreement concluded with the Seminole leaders on December 16, 1897. The remonstrance alleged misgovernment and the participation by these leaders in a land swindle at the expense of the tribe. The Secretary laid this protest before Congress. [
] During much of the period
in question, 1899-1907, and for some time prior thereto, two half-breed brothers were principal chief and treasurer, respectively, of the Seminole Nation. Together they ran a trading store in the Seminole country, and extended credit by giving due bills, good only in trade at their store, to individual Seminoles in the amount of annuities or other payments owing those individuals. The activities of these brothers, and their system of credit in particular, were attacked on the floor of Congress in 1896 and 1897, [
] and severely criticized by an investigator for the Department of Justice in 1905, part of whose report was set forth in a letter from the Acting Commission of Indian Affairs to the Secretary of the Interior, dated November 11, 1905. [
All this tends to show that the Seminole tribal officers might have been faithless to their trust during the period in question, and that the Government officials administering Indian affairs and disbursing Seminole funds might have been aware of that faithlessness at the time payments were made to the Seminole treasurer. Here again, the Court of Claims did not address itself to, and made no findings on, this material issue. As we said in the discussion of Item Two,
it is not our function to make basic findings of fact. Again, we do not say that the showing with respect to this Item establishes breach of the Government's fiduciary obligation, but we are of opinion that it is sufficient to justify remanding this branch of the case to the Court of Claims for further findings, in the light of such evidence as may be brought to its attention,
as to whether the Seminole tribal officers were mulcting the Nation from 1899 to 1907; whether, if such were the case, the appropriate Government officials administering Indian affairs and disbursing moneys to the Seminoles had knowledge thereof at the time any of the payments to the tribal treasurer were made; and, if so, whether the Seminole Nation received the benefit of any sums expended by the tribal treasurer. On the basis of these findings, the Court of Claims can then determine whether there was a breach of the Government's fiduciary obligation, as defined in the discussion of Item Two,
and, if there was a breach, the resultant liability.
One phase of this question does require attention. In
Seminole Nation v. United States, post,
316 U. S. 310
, petitioner asserted that the Court of Claims gave the Government credit there for an offset which it had employed in the instant case, thus allowing a double credit. To avoid this confusion, the Court of Claims should find and designate the precise gratuitous expenditures to be offset against the Government's liability, instead of finding generally all the items which the Government may ever be entitled to use. Gratuity offsets resemble a fund in a bank, to be drawn upon by the Government in successive Indian claims cases until exhausted. Since they may be needed in future cases, it becomes important to know precisely
Seven items, amounting to $1,307,478.02, were considered by this Court in
U.S. 417. As to six of those items, it was concluded that to jurisdiction existed in the Court of Claims, and no decision on the merits of those claims was expressed. The seventh item was examined on its merits and disallowed in large part.
U.S. 417,
Petitioner does not question this finding of the Court of Claims.
Annual Reports of the Commissioner of Indian Affairs: 1876, pp. 212-213; 1877, pp. 690-691; 1878, pp. 286-287; 1879, pp. 341-342; 1881, pp. 280-281; 1883, pp. 90, 250-251; 1884, pp. 270-271; 1886, pp. 146, 154; 1887, pp. 98, 110; 1888, pp. 113, 122; 1890, pp. 89, 94; 1891, pp. 240, 250; 1892, pp. 247, 256; 1893, pp. 143, 147; 1894, p. 140; 1895, pp. 155, 161; 1896, pp. 151-158.
Report of the Commissioner of Indian Affairs for 1873, pp. 211-212.
There is no better example of this than the facts of the instant case. Despite the lapse of time and the bar of the statute of limitations, Congress authorized the Court of Claims to adjudicate all legal and equitable claims, arising under statute or treaty, which the Seminole Nation may have against the United States. And after an adverse decision by this Court on jurisdictional grounds,
U.S. 417, Congress again removed the bar. 50 Stat. 650.
As was well said by Chief Judge (later Mr. Justice) Cardozo in
249 N.Y. 458, 464, 164 N.E. 545, 546:
R.S. §§ 441, 444, 463, 464, 2089, and R.S. § 445.
Act of April 15, 1874, c. 97, 18 Stat. 29.
On November 20, 1878, special agent Meacham wrote the Commissioner of Indian Affairs that "Some of the Band Chiefs are tyrants and despots, holding their people under abject fear and in some instances of actual servitude." The letter also referred to the intention of the Chiefs "to
gobble' the next money for the purpose of keeping up their government."
". . . that no payments of any moneys, on any account whatever, be made to any of the tribal governments or to any officer thereof for disbursement, but payments of
all expenses incurred in transacting their business and of
all sums to members of said tribes shall be made under the direction of the Secretary of the Interior by an officer appointed by him; and per capita payments shall be made direct to each individual in lawful money of the United States, and the same shall not be liable to the payment of any previously contracted obligation."
Report dated November 20, 1894, Appendix B, H.Ex.Doc., vol. 14, 53d Cong., 3d Sess. (1894-95), p. LXVIII.
pp. LXIX-LXX.
Report dated November 18, 1895, Exhibit A, H.Doc., vol. 14, 54th Cong., 1st Sess. (1895-96), p. XCV.
pp. LXXXVII, XCIII-XCIV.
report dated October 11, 1897, Exhibit B, H.Doc., vol. 12, 55th Cong., 2d Sess. (1897-98), pp. CXIX, CXXI.
S.Doc. 105, 55th Cong., 2d Sess. (1898), pp. 2-4. This remonstrance stated in part:
28 Cong.Rec. 2070; 29 Cong.Rec. 1261.