Robert R. RUSH, State Senator and Member of the 68th General Assembly of Iowa, Appellant, v. Robert D. RAY, Governor, State of Iowa, Appellee.
No. 83-1191.
Supreme Court of Iowa.
Feb. 13, 1985.
It follows that when a buyer and seller are dealing with one another at arm‘s length, a broker employed by one party is not bound to disclose everything he knows to the other party. Indeed, his duty of loyalty to his principal may well preclude his doing so.
Ellis v. Flink, 374 So.2d 4, 5 (Fla.1979); see Stevens v. Jayhawk Realty Co., 9 Kan. App. 338, 342, 677 P.2d 1019, 1023 (1984) (quoting Ellis in case where broker represented seller, not buyer).
Menzels contend, among other things, that the defendants should have undertaken to discover structural defects in this nearly-completed home, perhaps by hiring a structural engineer. The Vermont Supreme Court has recently described, realistically I believe, one aspect of the duty a seller‘s agent owes a buyer of real estate:
As an agent of a seller, a real estate broker or agent is guilty of negligent misrepresentation only if he or she passes information from a seller to a buyer that he or she knows or has reason to know may be untrue. Real estate brokers and agents are marketing agents, not structural engineers or contractors. They have no duty to verify independently representations made by a seller unless they are aware of facts that “tend to indicate that such representation[s are] false.”
Provost v. Miller, 144 Vt. 67, 69-70, 473 A.2d 1162, 1164 (1984), quoting from Lyons v. Christ Episcopal Church, 71 Ill. App.3d 257, 259-60, 27 Ill.Dec. 559, 561, 389 N.E.2d 623, 625 (1979).
I would remand this case for reconsideration by the trial court of all of the issues addressed in divisions I and II of the majority opinion, not with the critical agency question predetermined by this court.
James M. Redmond and Faith O‘Reilly of Babich, Bennett & Nickerson, Des Moines, for appellant.
Edgar H. Bittle and Edward W. Remsburg of Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, Des Moines, for appellee.
In this appeal a legislator challenges the legality of the Governor‘s action exercising his item veto power. The basic issue is whether use of the governor‘s item veto power to eliminate a provision in an appropriation bill which prohibits the expenditure or transfer of appropriated funds from one department of state government to another is proper. The trial court held that such a veto is proper. We conclude such a provision is a qualification or limitation on the appropriation, rather than an item, and reverse.
During the 68th session of the Iowa General Assembly, the legislature enacted five appropriation bills for specific purposes. The bills in question are senate files 471, 497 and 2241 and house files 764 and 2580. Each bill contains a provision that either provided “notwithstanding section eight point thirty-nine (8.39) of the Code, funds appropriated by this Act shall not be subject to transfer or expenditure for any purpose other than the purposes specified” or recited a phrase similar in language and content.
Governor Robert D. Ray exercised his item veto power to excise the quoted and similar phrases from each act. The legislature did not override the Governor‘s item vetoes. We find it unnecessary to set out details concerning each specific bill or give the Governor‘s message concerning the reasons for the individual vetoes. Our opinion concerning the wisdom of either the original enactments or the vetoes does not enter into our judicial evaluation of the legality of the Governor‘s action.
The constitutional provision which gives the governor item veto authority provides in pertinent part:
The governor may approve appropriation bills in whole or in part and may disapprove any item of an appropriation bill; and the part approved shall become a law. Any item of an appropriation bill disapproved by the governor shall be returned, ... Any such item of an appropriation bill may be enacted into law notwithstanding the governor‘s objections, in the same manner as provided for other bills.
Appellant asserts that the vetoed portions of these five acts are provisos or limitations, not items; thus, they were not subject to the governor‘s item veto power. On the other hand, the Governor asserts that the language stricken from the five appropriation bills constituted distinct, severable “items” within the meaning of article III, section 16 of the Iowa Constitution, that could be removed from the appropriation bills by the use of the item veto.
We have twice passed on the legality of the governor‘s exercise of the item veto power. On each occasion, we discussed whether the vetoed portion of the legislative bill was a condition or qualification of the appropriation, not subject to veto, or an item, properly deleted. Welden v. Ray, 229 N.W.2d 706, 710 (Iowa 1975); State ex rel. Turner v. Iowa State Highway Commission, 186 N.W.2d 141, 151 (Iowa 1971). In these cases we have extensively discussed the history and phraseology of our constitutional item veto provision and decisions from other jurisdictions interpreting and construing similar language and provisions. We need not repeat these discussions at length, but consider only the general principles announced.
The problem presented in Turner arose when the legislature appropriated funds to the primary road fund, and the governor vetoed a portion of the bill that additionally prohibited removing certain established offices from their present location. 186 N.W.2d at 143. When this item veto was challenged, we upheld the veto. We established certain principles to be used in interpreting the term “item” and distinguished items, which are subject to veto, from provisos or conditions inseparably connected to an appropriation, which are not subject to veto. We approved another court‘s statement that an “item” is “something that may be taken out of a bill without affecting its other purposes and provisions. It is something that can be lifted bodily from it rather than cut out. No damage can be done to the surrounding legislative tissue, nor should any scar tissue result therefrom.” Id. at 151 (quoting Commonwealth v. Dodson, 176 Va. 281, 290, 11 S.E.2d 120, 124 (1940)). While we did not provide a specific definition of those provisos or conditions which are not subject to veto, we did quote the following language: “It follows conclusively that where the veto power is attempted to be exercised to object to ... language qualifying an appropriation or directing the method of its uses, he exceeds the constitutional authority vested in him....” Id. 186 N.W.2d at 150 (quoting Fulmore v. Lane, 104 Tex. 499, 512, 140 S.W. 405, 412 (1911)). While we surmised that the legislature may have intended to make the challenged language a limitation or proviso on the expenditure of funds, we held the act as drawn and enacted did not restrict the use of the appropriated funds for the purposes and uses referred to in the deleted language. We held the deleted language was an item rather than a qualification.
When the governor‘s authority to exercise his item veto power was challenged in Welden, we reached a different result than in Turner, holding that the attempted vetoes by the governor were beyond the scope of his constitutional power. 229 N.W.2d at 715 (two justices dissenting).
In Welden we again approved the use of the severability test announced in Turner, 186 N.W.2d at 151, to determine whether language constitutes an item. Welden, 229 N.W.2d at 714. We further discussed and explained the nature of the governor‘s role in the separation of powers and the prohibition against using the veto to destroy the remaining legislative provision by altering the legislative intent. We quoted a law review article with approval as follows:
It is obvious that the item veto power does not contemplate striking out conditions and restrictions alone as items, for that would be affirmative legislation, whereas the governor‘s veto power is a strictly negative power, not a creative power.
Id. at 713 (quoting Note, Item Veto Amendment to the Iowa Constitution, 18 Drake L.Rev. 245, 249-50 (1969)). We also quoted a New Mexico ruling that stated:
The power of partial veto is the power to disapprove. This is a negative power, or a power to delete or destroy a part or item, and is not a positive power, or a power to alter, enlarge or increase the effect of the remaining parts or items.... Thus, a partial veto must be so exercised that it eliminates or destroys the whole of an item or part and does not distort the legislative intent, and in effect create legislation inconsistent with that enacted by the Legislature, by the careful striking of words, phrases, clauses or sentences.
Id. at 711 (quoting State ex rel. Sego v. Kirkpatrick, 86 N.M. 359, 365, 524 P.2d 975, 981 (1974)). Additionally, we referred to language from a Virginia case as follows:
We think it plain that the veto power does not carry with it power to strike out conditions or restrictions. That would be legislation. Plainly, money devoted to one purpose can not be used for another, and it is equally plain that power to impose conditions before it can become available is legislation.
Id. at 712 (quoting Commonwealth v. Dodson, 176 Va. 281, 296, 11 S.E.2d 120, 127 (1940)). The message of these cases and others reviewed in Welden is that the governor‘s power is a negative one that does not allow him to legislate by striking qualifications in a manner which distorts legislative intent. Thus, he cannot strike a provision that would divert money appropriated by the legislature for one purpose so that it may be used for another. Finally, we held in Welden that the governor‘s veto of a legislatively-imposed qualification upon an appropriation must also include a veto of the appropriation. Id. at 713.
In the present case the trial court determined that the vetoed portion of each appropriation bill did not change the basic purpose of the legislation; thus, the provision is properly considered a severable item rather than a legislatively-imposed condition. We agree with appellant‘s contention that “the effect of this veto was to make money from the treasury available for purposes not authorized by the legislation as it was originally written, contrary to the clear intent of the legislature.” The Governor has used the item veto power affirmatively to create funds not authorized by the legislature. The vetoed language created conditions, restricting use of the money to the stated purpose. It is not severable, because upon excision of this language, the rest of the legislation is affected. The appropriated money is no longer required to be used only for the stated purpose; it
This case is unlike Turner in which the deletion of directions concerning office changes had no effect on the appropriation of funds. We find it closer akin to Welden in which the governor had deleted provisions which dictated how and for what purposes the appropriated funds were to be expended. In the present case the legislature clearly limited the expenditure of the appropriated funds to specified purposes. The veto distorted the obvious legislative intent that the funds only be spent for the appropriated purposes and created additional ways the funds might be spent. This was use of the veto power to create rather than negate. We hold that the language vetoed constituted qualifications on the appropriations rather than separate items subject to veto.
We are not unmindful that the Governor maintains the stricken language merely “sought to override
The purpose of the language was to limit and qualify the use of the funds, an appropriate legislative function. The stricken clauses, standing by themselves, would have no independent purpose if the governor had vetoed the appropriations. Such clauses only have purpose and effect when they stand in conjunction with the appropriations. The avoidance of
In summary, we hold the language stricken was an outgrowth of the legislature‘s power to appropriate funds. “Inherent in the power to appropriate is the power to specify how the money shall be spent.” Welden, 229 N.W.2d at 710. We construe the stricken language to qualify the appropriation by limiting its expenditure. We do not consider the vetoed language an item that is the proper subject of the governor‘s item veto power.
In the Governor‘s motion for summary judgment, he maintained the legislative action is an unconstitutional restriction since it attempts to prevent gubernatorial exercise of the transfer power previously delegated in
Finally, the legislation was not an improper repeal of
We have not addressed, but have considered, all the arguments of the parties. We conclude that our ruling in Welden along with the reasons expressed here compel us to hold that the trial court erred in granting the Governor‘s motion for summary judgment. The trial court should have sustained appellant‘s motion and entered judgment declaring the five vetoes illegal.
REVERSED.
All Justices concur except REYNOLDSON, C.J., and HARRIS and McGIVERIN, JJ., who dissent.
HARRIS, Justice (dissenting).
The majority holding is a rejection of the definition of “item” which we established in State ex rel. Turner v. Iowa State Highway Comm‘n., 186 N.W.2d 141, 150-52 (Iowa 1971), and a far-flung expansion of our majority holding in Welden v. Ray, 229 N.W.2d 706 (Iowa 1975). The result at once deprives the executive branch of a proper item veto and the right to veto legislation that repeals the operation of an existing statute. I respectfully dissent.
As the majority points out, there is no provision in the federal constitution for an item veto. We hence turn to state authorities for guidance. They disclose that our definition in Turner is no aberration. Agreeing with most definitions of “item” we said the term includes more than mere line subjects and dollar amounts. 186 N.W.2d at 149-52.
The experience in other states shows that, at best, there tends to be a blurred line between an “item” (which can be vetoed from an appropriation bill) and a proviso or condition on how the funds are to be spent (which cannot). It does however seem clear that the line, no matter how blurred, is crossed when legislation (even if labeled a proviso or condition) is appended to an appropriation bill in violation of the single subject provision of a state constitution.
The cases recognize a difficulty faced by governors when presented with appropriation bills which have been infused with legislation, going beyond the appropriation, which impacts either on existing statutes or upon purely executive functions. Some governors are unprotected even by a single-subject constitutional provision. See State ex rel. Wisconsin Telephone Co. v. Henry, 218 Wis. 302, 314, 260 N.W. 486, 492 (1935). It is quite common to find provisions such as
We would have a different case if the clauses involved here came under the rule relating to separate, severable provisions under which appropriations were not dependent for passage by the legislature.
Welden, 229 N.W.2d at 714 (citing Turner). The scar tissue test certainly did not originate in our Turner opinion. Again, it is a well established response by the courts to a legislature‘s temptation to append controversial bills to appropriation measures.
Plaintiffs no doubt think the scar tissue rule is an unwarranted expansion of the originally intended scope of an item veto, which they see as the mere authority to strike individual dollar amounts. But courts elsewhere commonly apply it. In addition to Turner and Welden, see Brown v. Firestone, 382 So.2d 654, 664-68 (Fla.1980); Henry v. Edwards, 346 So.2d 153, 158 (La.1977); Attorney General v. Administrative Justice, 384 Mass. 511, 515-18, 427 N.E.2d 735, 738 (1981); State ex rel. Sego v. Kirkpatrick, 86 N.M. 359, 364-65, 524 P.2d 975, 985-86 (1974); State ex rel. Link v. Olson, 286 N.W.2d 262, 270-71 (N.D.1979); State ex rel. Brown v. Ferguson, 32 Ohio St.2d 245, 249-52, 291 N.E.2d 434, 438-39 (1972); Elmhurst Convalescent Center Inc. v. Bates, 46 Ohio App.2d 206, 209, 348 N.E.2d 151, 154 (1975); Brault v. Holleman, 217 Va. 441, 446-50, 230 S.E.2d 238, 243-44 (1976); Commonwealth v. Dodson, 176 Va. 281, 289-310, 11 S.E.2d 120, 123-32 (1940); Fain v. Chapman, 94 Wash.2d 684, 687-88, 619 P.2d 353, 355-56 (1980); State ex rel. Kleczka v. Conta, 82 Wis.2d 679, 705-08, 264 N.W.2d 539, 550 (1978); State ex rel. Sundby v. Adamany, 71 Wis.2d 118, 128-34, 237 N.W.2d 910, 917-18 (1976).
The majority recites, and seems to acknowledge the validity of, the “scar-tissue test“, but does not follow it. Under the test the provisions in question here were proper subjects of item vetos. Each appropriation was earmarked to a department of government which could use the funds only for the purpose specified by the legislature. The vetoes here in no way modified the legislative plan of how the department could use the funds. The vetoed provisions related only to funds which might remain unused. The power of the governor to transfer unused funds under
If the legislature were to pass an act calling for the repeal or suspension of
REYNOLDSON, C.J., and McGIVERIN, J., join this dissent.