In United States v. Algoma Lumber Co., 305 U.S. 415, 59 S.Ct. 267, 83 L.Ed. 260 (1939), the Court held that the United States is not liable to third parties when it contracts with them on behalf of Indian tribes. Id. at 423, 59 S.Ct. at 271. In Algoma a timber company had entered into a logging contract with the Klamath Indians. The contract was " 'between the Superintendent of the Klamath Indian School, for and on behalf of the Klamath Indians, party of the first part' and the Lumber Company, 'party of the second part.' " Id. at 421, 59 S.Ct. at 270. The contract was approved by the Department of the Interior. Payments for the timber were actually deposited into the United States Treasury for the benefit of the Indians. The lumber company ultimately claimed it had overpayed for the timber and it sued the United States as signatory on the contract to recover the overpayment. The Court refused to extend liability to the United States because it was clear that the United States was acting for the benefit of the Klamath Indians. The Algoma opinion represents the Court's rejection of the trust theory of liability as a means of holding the United States contractually liable to third parties when it acts on behalf of Indians.