2023 New Mexico Statutes › Chapter 40 - Domestic Affairs › Article 3 - Property Rights › Section 40-3-8 - Classes of property.

A. "Separate property" means:
(1) property acquired by either spouse before marriage or after entry of a decree of dissolution of marriage;
(2) property acquired after entry of a decree entered pursuant to Section 40-4-3 NMSA 1978, unless the decree provides otherwise;
(3) property designated as separate property by a judgment or decree of any court having jurisdiction;
(4) property acquired by either spouse by gift, bequest, devise or descent; and
(5) property designated as separate property by a written agreement between the spouses, including a deed or other written agreement concerning property held by the spouses as joint tenants or tenants in common in which the property is designated as separate property.
B. Except as provided in Subsection C of this section, "community property" means property acquired by either or both spouses during marriage which is not separate property. Property acquired by a husband and wife by an instrument in writing whether as tenants in common or as joint tenants or otherwise shall be presumed to be held as community property unless such property is separate property within the meaning of Subsection A of this section.
C. "Quasi-community property" means all real or personal property, except separate property as defined in Subsection A of this section, wherever situated, heretofore or hereafter acquired in any of the following ways:
(1) by either spouse while domiciled elsewhere which would have been community property if the spouse who acquired the property had been domiciled in this state at the time of its acquisition; or
(2) in exchange for real or personal property, wherever situated, which would have been community property if the spouse who acquired the property so exchanged had been domiciled in this state at the time of its acquisition.
D. For purposes of division of property incident to a dissolution of marriage or a legal separation under Section 40-4-3 NMSA 1978, quasi-community property shall be treated as community property, if both parties are domiciliaries of New Mexico at the time of the dissolution or legal separation proceeding.
E. "Property" includes the rents, issues and profits thereof.
F. The right to hold property as joint tenants or as tenants in common and the legal incidents of so holding, including but not limited to the incident of the right of survivorship of joint tenancy, are not altered by the Community Property Act of 1973 [40-3-6 to 40-3-17 NMSA 1978], except as provided in Sections 40-3-10, 40-3-11 and 40-3-13 NMSA 1978.
G. The provisions of the 1984 amendments to this section shall not affect the right of any creditor, which right accrued prior to the effective date of those amendments.
History:
1953 Comp., § 57-4A-2, enacted by Laws 1973, ch. 320, § 3; 1984, ch. 122, § 1; 1990, ch. 38, § 1.
ANNOTATIONS
Cross references.
— For determination of community property upon death of spouse,
see
45-2-804 NMSA 1978.
Compiler's notes.
— The language "1984 amendments to this section," in Subsection G, refers to Laws 1984, ch. 122, § 1.
The 1990 amendment,
effective May 16, 1990, in Subsection B, added the exception at the beginning and substituted "shall be presumed" for "will be presumed" in the second sentence; added present Subsections C and D; and redesignated former Subsections C to E as present Subsections E to G.
I. GENERAL CONSIDERATION.
Retroactive application of 1984 amendments.
— The 1984 amendments to this section apply retroactively so as to convert property acquired by husband and wife as joint tenants prior to the passage of the amendment, and thus originally held as separate property, into community property which would be included in the bankruptcy estate. Property acquired before 1984 by husband and wife through an instrument designating them as joint tenants is presumed to be held as community property, even though it may also be held as joint tenancy property.
Swink v. Fingado
, 1993-NMSC-013, 115 N.M. 275, 850 P.2d 978.
Section does not deal with how property may be changed to different class;
by its terms, it deals with classes of property.
Estate of Fletcher v. Jackson
, 1980-NMCA-054, 94 N.M. 572, 613 P.2d 714, cert. denied, 94 N.M. 674, 615 P.2d 991.
Spouses are permitted to change the property's status.
Nichols v. Nichols
, 1982-NMSC-071, 98 N.M. 322, 648 P.2d 780.
Real estate contract as evidence of intent to transmute.
— Although a real estate contract is not conclusive and is not, by itself, substantial evidence on the issue of transmutation of property, it at least constitutes some evidence of intent to transmute.
Nichols v. Nichols
, 1982-NMSC-071, 98 N.M. 322, 648 P.2d 780.
Duty of trial court is to divide equally community property
of the spouses and, until the extent of the property of the community has been determined, the trial court is in no position to make a fair and just division.
Otto v. Otto
, 1969-NMSC-074, 80 N.M. 331, 455 P.2d 642.
The trial court has a duty to divide the property of the community as equally as possible.
Mitchell v. Mitchell
, 1986-NMCA-028, 104 N.M. 205, 719 P.2d 432, cert. denied, 104 N.M. 84, 717 P.2d 60.
Relative amounts of separate property and community property
which make up the commingled total is an important factor.
Conley v. Quinn
, 1959-NMSC-065, 66 N.M. 242, 346 P.2d 1030.
Property takes status as community or separate at time and manner of acquisition.
— Property acquired in New Mexico takes its status as community or separate property at the time and by the manner of its acquisition; and if a part of the purchase money is later paid by other funds than those of the owner of the property, whether of the community or an individual spouse, the owner is indebted to the source of such funds in that amount, but such payment does not affect the title of the purchaser.
Michelson v. Michelson
, 1976-NMSC-026, 89 N.M. 282, 551 P.2d 638;
Shanafelt v. Holloman
, 1956-NMSC-047, 61 N.M. 147, 296 P.2d 752.
Property in this state takes its status as community or separate property at the time, and by the manner, of its acquisition.
Lucas v. Lucas
, 1980-NMSC-123, 95 N.M. 283, 621 P.2d 500;
Bustos v. Bustos
, 1983-NMSC-074, 100 N.M. 556, 673 P.2d 1289.
Property takes its distinctive legal title, either as community property or as separate property, at the time it is acquired and is fixed by the manner of its acquisition.
English v. Sanchez
, 1990-NMSC-064, 110 N.M. 343, 796 P.2d 236.
The general conflict of laws rule by which an interest in property takes its character at the time and in the manner of its acquisition has not been superseded by the Community Property Act.
Blackwell v. Lurie
, 2003-NMCA-082, 134 N.M. 1, 71 P.3d 509, cert. denied, 134 N.M. 123, 73 P.3d 826.
Subsequent improvements with community funds does not change status.
— Property acquired in New Mexico takes its status as community or separate property at the time and by the manner of its acquisition and subsequent improvement of the premises with community funds does not, of itself, change the nature of the premises, but would only create an indebtedness as between the spouses. Thus, the subsequent erection of improvements on the separate property of the husband with community funds was immaterial to the respective rights of the wife and the bonding company seeking indemnification from the husband for certain amounts paid pursuant to its bonds to the state and at most, would merely give rise to an indebtedness as between the spouses, so that the tract was subject to sale under the attachment of the bonding company.
U.S. Fid. & Guar. Co. v. Chavez
, 126 F. Supp. 227 (D.N.M. 1954)(decided under former law).
Apportioning assets between separate and community estates.
— It is impossible to lay down hard and fast guidelines in apportioning assets between the separate estate of a conjugal partner and the community; the surrounding circumstances must be carefully considered as each case will depend upon its own facts, and the ultimate answer will call into play the nicest and most profound judgment of the trial court. Mathematical exactness is not expected or required, but substantial justice can be accomplished by the exercise of reason and judgment in all such cases.
Michelson v. Michelson
, 1976-NMSC-026, 89 N.M. 282, 551 P.2d 638.
Apportioning assets.
— Apportionment is a legal concept that is properly applied to an asset acquired by married people "with mixed monies" - that is, partly with community and partly with separate funds.
Dorbin v. Dorbin
, 1986-NMCA-114, 105 N.M. 263, 731 P.2d 959.
Reimbursement for funds spent for the benefit of separate property.
— When community money is spent to the benefit of separate property, without the acquisition of an asset, for example, when money is paid for interest, taxes and insurance, neither New Mexico statute nor case law authorizes reimbursement.
Dorbin v. Dorbin
, 1986-NMCA-114, 105 N.M. 263, 731 P.2d 959.
It was error to reimburse to the community both the principal paydown and the amount of interest paid during the marriage which benefited the wife's sole and separate residence.
Dorbin v. Dorbin
, 1986-NMCA-114, 105 N.M. 263, 731 P.2d 959.
Includes determining what income amounts due to personal efforts on property employed.
— In apportioning assets between a spouse's separate estate and the community each case must be determined with reference to its surrounding facts and circumstances to determine what amount of the income is due to personal efforts of the spouses and what is attributable to the separate property employed; dependent upon the nature of the business and the risks involved, it must be reckoned what would be a fair return on the capital investment as well as determined what would be a fair allowance for the personal services rendered.
Michelson v. Michelson
, 1976-NMSC-026, 89 N.M. 282, 551 P.2d 638.
Interest in property located in foreign domicile determined by law of situs.
— Interests in property acquired in a foreign domicile by the parties during marriage, which property still has its situs in the foreign state at the time of the New Mexico divorce proceedings, are to be determined by the trial court pursuant to the statutes and case law of the foreign state in which the property was acquired.
Brenholdt v. Brenholdt
, 1980-NMSC-051, 94 N.M. 489, 612 P.2d 1300.
Character of retirement pay is determined by law of state
where it is earned; if earned in a community property state during coverture, it is community property, and if it is earned in a noncommunity property state during coverture, it is separate estate.
Otto v. Otto
, 1969-NMSC-074, 80 N.M. 331, 455 P.2d 642.
Property agreement could be retroactively altered even after husband's death.
— Where deficiencies were assessed because New Mexico law forbade a husband and wife from transmuting community property by mere agreement, and their separate property agreement was invalid, the rights of the parties did not become fixed under controlling New Mexico law, at the death of husband, and such rights could be retroactively altered by an overruling decision after his death, and the separate property agreement, under which the husband and wife held their property as tenants in common, was valid and operative from its inception.
Massaglia v. Commissioner
, 286 F.2d 258 (10th Cir. 1961).
In divorce action, partnership business acquired before marriage, separate property.
— In divorce action, supreme court affirmed trial court's division of separate and community property in business partnership acquired by husband prior to marriage, where trial court found that husband's withdrawals from the partnership represented the reasonable value of his services and personal efforts in conduct of the business during the marriage, and thus constituted the total amount attributable to the community, and where such finding was not attacked, wife's contention that trial court erred in certain determinations as to value of the partnership was irrelevant since it had already been established that the business was husband's separate property.
Gillespie v. Gillespie
, 1973-NMSC-019, 84 N.M. 618, 506 P.2d 775.
All interests in property conveyed when wife signed quitclaim deed.
— In a quiet title action, appellant's contention that a quitclaim deed executed to appellee by her, her husband and cograntees conveyed only her interest as a spouse in community property, that her individual interest as cotenant in common with her husband and the other cograntees was not conveyed, was found to be erroneous. Appellant conveyed all of her interest in the property by the deed and not two separate and distinct estates in the mining property, to-wit, a community property interest and a separate and distinct interest given to married women by the statute.
Waddell v. Bow Corp.
, 408 F.2d 772 (10th Cir. 1969);
Stephens v. Stephens
, 1979-NMSC-039, 93 N.M. 1, 595 P.2d 1196.
Division of insurance proceeds where claim pending at divorce.
— Where premium on disability insurance proceeds was paid from husband's earnings during marriage, insurance proceeds on claim pending against insurance company at time of divorce were community property.
Douglas v. Douglas
, 1984-NMCA-071, 101 N.M. 570, 686 P.2d 260.
Tenancies by the entirety do not violate public policy.
— There is no indication in either the statutes or the case law that the abrogation of tenancies by the entirety by the adoption of the community property system represented a determination that tenancies by the entirety violate some deep-rooted public policy.
Blackwell v. Lurie
, 2003-NMCA-082, 134 N.M. 1, 71 P.3d 509, cert. denied, 134 N.M. 123, 73 P.3d 826.
Community rights generally not forfeited by bigamy.
— The mere fact of bigamy is insufficient to deprive wife of her share of community property.
Medina v. Medina
, 2006-NMCA-042, 139 N.M. 309, 131 P.3d 696.
Circumstances when community rights are forfeited by bigamy.
— A bigamous spouse should be deprived of his or her community property rights only when the circumstances of the case shock the conscience of the court.
Medina v. Medina
, 2006-NMCA-042, 139 N.M. 309, 131 P.3d 696.
II. SEPARATE PROPERTY.
All property not separate is community.
— Property owned by either spouse before marriage or acquired after marriage by gift, bequest, devise or descent, with the rents, issues and profits, is the separate property of that spouse. All other property acquired by either husband or wife or both after marriage is community property.
Hollingsworth v. Hicks
, 1953-NMSC-045, 57 N.M. 336, 258 P.2d 724 (decided under former law).
Deed naming one spouse raises presumption of separate property.
— A deed that names only one spouse does not convey the realty absolutely as separate property, but only creates a presumption of separate property that may be rebutted. Overcoming this presumption by a preponderance of the evidence appears to be sufficient.
Sanchez v. Sanchez
, 1987-NMCA-143, 106 N.M. 648, 748 P.2d 21, cert. denied, 106 N.M. 627, 747 P.2d 922.
Burden of proof.
— If a party alleging that property held in joint tenancy was meant to be separate, to prevail there must be either a clear designation of that intent, or enough evidence to overcome the presumption of community property.
Swink v. Sunwest Bank (In re Fingado)
, 113 Bankr. 37 (Bankr. D.N.M. 1990).
Burden of proving separate property interests.
— In a division of property proceeding that resulted from the parties' dissolution of marriage, where husband claimed the district court failed to address husband's claimed interest in a 1955 Chevrolet that wife had given him as a birthday gift, and where husband claimed that wife sold the vehicle without his consent and that he did not receive compensation for the loss of the vehicle, the district court did not err in effectively concluding, by rejecting husband's proposed findings, that husband failed to meet his burden of claiming and proving that he had separate and community property interests in the 1955 Chevrolet, because there was no testimony that wife appropriated or re-gifted the car, that husband did not consent to removal of the car, or that he had never received compensation for it.
Gabriele v. Gabriele
, 2018-NMCA-042, cert. denied.
Admissibility of parol evidence to show intent.
— Parol evidence was properly admitted, not to alter certain deeds, but rather to establish the true consideration behind the deeds, which, in turn, established the lack of intention of the grantors to make a gift to the wife.
Sanchez v. Sanchez
, 1987-NMCA-143, 106 N.M. 648, 748 P.2d 21, cert. denied, 106 N.M. 627, 747 P.2d 922.
Presumption of community property where separate cannot be traced.
— If separate property has been so commingled or mixed with property acquired after marriage so that the separate property cannot be clearly traced or identified, then there is a presumption that the property acquired after marriage is community property, and not held in joint tenancy, unless this presumption can be overcome by proof.
Wiggins v. Rush
, 1971-NMSC-092, 83 N.M. 133, 489 P.2d 641.
Intermingling of property.
— When separate property has been so intermingled with community property that the separate property cannot be traced or identified, it falls under the presumption of community property. Ability to trace separate funds prevents the determination of the transmutation of property by operation of law; a trial court still has the ability to consider the commingling, along with other evidence, in deciding whether transmutation of separate into community property took place.
Nichols v. Nichols
, 1982-NMSC-071, 98 N.M. 322, 648 P.2d 780.
Effects of failure to designate separateness.
— Since husband and wife acquired dwellings as joint tenants through instruments which did not designate the property as separate property, wife's interest in the proceeds from the properties was included in husband's bankruptcy estate.
Swink v. Sunwest Bank
, 995 F.2d 175 (10th Cir. 1993).
Mere commingling of separate property with community property does not change its character
from separate to community property, unless the separate property so commingled cannot be traced and identified.
Burlingham v. Burlingham
, 1963-NMSC-068, 72 N.M. 433, 384 P.2d 699;
Corley v. Corley
, 1979-NMSC-040, 92 N.M. 716, 594 P.2d 1172.
Presumption of community not followed.
— When there is a commingling of a negligible amount of community property with a large amount of separate property so that the separate property can no longer be identified, the general rule that such property falls under the presumption of community property is not followed.
Conley v. Quinn
, 1959-NMSC-065, 66 N.M. 242, 346 P.2d 1030.
Property purchased before marriage separate though deed delivered after.
— Property purchased by one spouse before marriage is separate property, though the deed therefor is not executed and delivered until after marriage, and this is true though a part of the purchase price is not paid until after the marriage.
Hollingsworth v. Hicks
, 1953-NMSC-045, 57 N.M. 336, 258 P.2d 724.
Purchase of property prior to marriage.
— Husband had equitable title to property prior to his marriage and the property was his separate property, where the property was purchased prior to the marriage and the deed was received by the husband during the marriage.
Michaluk v. Burke
, 1987-NMCA-044, 105 N.M. 670, 735 P.2d 1176.
Community contributions to separate property.
— The community is entitled to a lien against the separate property of a spouse for the enhanced value of such property attributable to community labor during the marriage.
Jurado v. Jurado
, 1995-NMCA-014, 119 N.M. 522, 892 P.2d 969.
Extent of community lien on separate property.
— Under New Mexico law, the community is entitled to an equitable lien against separate property only to the extent that the community can show that its funds or labor enhanced the value of the property or increased the equity interest in the property.
Martinez v. Block
, 1993-NMCA-093, 115 N.M. 762, 858 P.2d 429.
Formula for determining amount of community lien on separate property that has depreciated in value.
— When the value of a separate property asset has decreased during the marriage but positive equity remains in the property and the community has paid contributions toward the principal indebtedness against that property, the formula for calculating a community lien is C-[C/B x D], where D is the depreciation in value of the property during the marriage, B is the value on the date of the marriage, and C is the community contributions to principal or market value.
Ross v. Negron-Ross
, 2017-NMCA-061.
Community contributions and improvements to separate property.
— Community contributions and improvements to real property do not affect the title of separate ownership; the right of the community to be reimbursed for the amount of the lien does not change the character of the property from separate to community, and separate property may be conveyed by the owner without the joinder of a spouse.
Hickey v. Griggs
, 1987-NMSC-050, 106 N.M. 27, 738 P.2d 899.
Appreciation equity in separate property.
— Where husband, prior to his marriage with wife, purchased a house, and where husband and wife, after marriage, made regular monthly mortgage payments on the property from their joint checking account, and where wife, during the marriage, used her separate funds to pay down the principal on the property, the district court did not err in awarding wife a share in the appreciated equity of the property, because wife was entitled to a share of the increased value of the separate property where she used her separate funds to increase the value the house.
Vanderlugt v. Vanderlugt
, 2018-NMCA-073.
Owner of separate property responsible for proceeds.
— When the owner of separate property participates in its operation to an extent that he may be said to be responsible for a portion of the proceeds arising from it, the proceeds shall then be apportioned as separate and community property.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.
Owner of separate property employs others to manage it for him.
— If a husband owning property as his sole and separate estate employs others to manage it and does not himself expend any labor, skill or industry upon it, the proceeds of the property must be held to be his separate property.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.
Income on investments as valid measure of separateness.
— Under this section income is the demonstrated interest on investments which is a valid measure of the separate income to a husband.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
Increase in value of separate property
produced by natural causes or essentially as a characteristic of the capital investment is separate property.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266;
Portillo v. Shappie
, 1981-NMSC-119, 97 N.M. 59, 636 P.2d 878.
Increase in value by community earnings is community property.
— The community owns the earning power of each of the spouses, and when that earning power is used for the benefit of one's separate property the portion of the earnings attributable to his personal activities and talent is community property.
Portillo v. Shappie
, 1981-NMSC-119, 97 N.M. 59, 636 P.2d 878.
The community is not limited to a lien in the amount of its funds and labor expended in making improvements to realty which was the separate property of plaintiff's deceased wife, but it is entitled to the increase in value of the realty which was directly attributable to the community funds and labor.
Portillo v. Shappie
, 1981-NMSC-119, 97 N.M. 59, 636 P.2d 878.
Method of proving value upon apportionment.
— Once participation in the operation of separate property is shown, the owner of the separate estate is not limited to its reasonable rental value upon apportionment. Instead, the method of division to be used depends upon what is best under all the proof. It is only when the actual value of the owner's efforts cannot be arrived at that resort may be had to more arbitrary proof of value, such as proof of the value of like services by others, prevailing rental values or interest rates upon investments.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.
Property separately acquired remains so even where improvements made with community funds.
— The character of ownership of property, whether separate or community, is determined at the time of its acquisition; if acquired as separate property, it retains such character even though community funds may later be employed in making improvements or discharging an indebtedness thereon.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.
Property acquired after marriage exchanged for property owned before marriage.
— Property acquired after marriage in exchange for or with the proceeds from property owned before marriage remains separate property.
Conley v. Quinn
, 1959-NMSC-065, 66 N.M. 242, 346 P.2d 1030.
Character of property exchanged for separate property.
— Where there is substantial evidence to support the trial court's finding that the husband's interests in certain property were his separate property, and an interest in a company was received in exchange for a portion of such interests, it necessarily follows the interest in the company is likewise his separate property.
Campbell v. Campbell
, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.
Intent to transmute necessary.
— Separate property can only be held to have been transmuted into community property during the course of a marriage upon a clear showing of intent by the party originally in possession of the property to effect such transmutation; the mere fact that a joint mortgage was taken on the property and that community funds were used to repay the loan is insufficient to effect transmutation, in the absence of a showing of intent.
Macias v. Macias
, 1998-NMCA-170, 126 N.M. 303, 968 P.2d 814.
Separate property not transmuted into community property.
— Property that was transferred exclusively to the wife, because the husband and wife did not want to subject it to a judgment lien if the husband was sued, was the wife's separate property and was not transmuted into community property by its conveyance to the husband for $2,000 just before they separated, where the property was valued at approximately $160,000, and where the wife was emotionally disturbed, was afraid of her husband, and desperately needed money to help their son pay his bills.
Bustos v. Bustos
, 1983-NMSC-074, 100 N.M. 556, 673 P.2d 1289.
Gift from husband to wife presumed separate estate.
— Where the husband purchases real estate with his own or community funds and has the title conveyed to his wife alone, the presumption is that he has made a gift to her and that the property so conveyed is her separate estate. However, this presumption is rebuttable.
Overton v. Benton
, 1955-NMSC-109, 60 N.M. 348, 291 P.2d 636.
Land purchased during marriage as separate where separate funds used.
— Since the source of the funds with which the land was purchased was clearly and indisputably traced and identified as wife's separate property, the fact that the land was purchased during marriage did not alter its status as her separate property.
Burlingham v. Burlingham
, 1963-NMSC-068, 72 N.M. 433, 384 P.2d 699.
Stock dividends.
— Dividends from separately invested stock are generally considered rents, issues and profits of the separate estate.
Zemke v. Zemke
, 1993-NMCA-067, 116 N.M. 114, 860 P.2d 756, cert. denied, 116 N.M. 71, 860 P.2d 201.
Increase in separate property.
— Any increase in the value of separate property is presumed to be also separate unless rebutted by direct and positive evidence that the increase was due to community funds or labor.
Zemke v. Zemke
, 1993-NMCA-067, 116 N.M. 114, 860 P.2d 756, cert. denied, 116 N.M. 71, 860 P.2d 201.
Income from husband's investments, owned by him prior to marriage,
is his separate property.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
Community acquired no investment in husband's business even if money paid during coverture.
— Where the husband's interest in business partnership was acquired prior to coverture, it was his separate property, regardless of whether payment was made for it before or after coverture. Even if some portion of the purchase moneys for the interest in the partnership had been paid during coverture, the community would have had no "investment" in the business, but merely an equitable lien or charge against it.
Gillespie v. Gillespie
, 1973-NMSC-019, 84 N.M. 618, 506 P.2d 775.
Recovery for personal injuries of wife as her separate property.
— In New Mexico although all real and personal property acquired after marriage by either spouse other than by gift, descent or devise is community property, the courts have held that the cause of action and recovery for personal injuries to the wife are her separate property, so that she may sue in her own name for pain and suffering and personal injuries without joinder of her husband, and her husband's contributory negligence is not imputed to her.
Roberson v. U-Bar Ranch, Inc.
, 303 F. Supp. 730 (D.N.M. 1968).
A victim's claim for personal injuries belonged to him and he could pursue it independent of any marital community, and therefore his administratrix could pursue the personal injury claim as the representative of his estate.
Rodgers v. Ferguson
, 1976-NMCA-098, 89 N.M. 688, 556 P.2d 844, cert. denied, 90 N.M. 7, 558 P.2d 619.
Written agreement to transmute property to joint tenancy not required.
— An agreement between spouses to transmute property from community property to joint tenancy does not have to be in writing in all cases.
Estate of Fletcher v. Jackson
, 1980-NMCA-054, 94 N.M. 572, 613 P.2d 714, cert. denied, 94 N.M. 674, 615 P.2d 991.
Removing wife's name from accounts by husband does not destroy joint tenancy.
— Where certain accounts were owned by husband and wife as joint tenants with right of survivorship, and during wife's incompetency the husband, without the wife's consent or knowledge, transferred the accounts into his name alone and had wife's name removed from other accounts, the actions of the husband did not destroy the joint tenancy and did not convert the property into community property; so, when the husband predeceased the wife, the property succeeded to her as the surviving joint tenant.
Bluestein v. Owensby
, 1977-NMSC-085, 91 N.M. 81, 570 P.2d 912.
Wife's separate property after divorce not subject to judgment creditor.
— The ultimate effect of the transmutation of judgment debtor's property from a community status to a tenancy in common after divorce is that wife's one-half interest is her separate property, and not subject to levy and execution by judgment creditor.
Atlas Corp. v. DeVilliers
, 447 F.2d 799 (10th Cir. 1971), cert. denied, 405 U.S. 933, 92 S. Ct. 939, 30 L. Ed. 2d 809,
reh'g denied
, 405 U.S. 1033, 92 S. Ct. 1288, 31 L. Ed. 2d 491 (1972).
Ranch owned before marriage is separate property.
— Where appellant owns ranch free and clear of all encumbrances prior to the marriage, it belongs to him as his separate property.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
Income from separate property not necessarily separate.
— Merely because a ranch belongs to a husband as his separate property does not mean that the income therefrom is his separate property.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
Veteran's interest in his V.A. disability pension
is characterized as his separate property since his entitlement thereto accrued prior to his marriage. Therefore, the community property laws do not give his spouse a protectable property interest in the pension.
Sena v. Roudebush
, 442 F. Supp. 153 (D.N.M. 1977).
Offspring of husband's separately owned horses constitutes "rents, issues and profits thereof"
and are separate property.
Corley v. Corley
, 1979-NMSC-040, 92 N.M. 716, 594 P.2d 1172.
Nondisability military retirement pay is separate property.
— Nondisability military retirement pay is the separate property of the spouse who is entitled to receive it, and it is not subject to division upon dissolution of marriage.
Espinda v. Espinda
, 1981-NMSC-098, 96 N.M. 712, 634 P.2d 1264, superseded by
Walentwoski v. Walentowski
, 1983-NMSC-097, 100 N.M. 484, 672 P.2d 657.
Burden of proving value of improvements made by community effort.
— Real property acquired by a husband prior to marriage, and paid for during the marriage with monies from his retirement disability pension, was separate property. Thus, where the wife failed to show the amount by which community labor or funds enhanced the value of the property, the trial court's decision to apportion some of the proceeds of the sale of the property to the community was not supported by the record.
Bayer v. Bayer
, 1990-NMCA-106, 110 N.M. 782, 800 P.2d 216, cert. denied, 110 N.M. 749, 799 P.2d 1121.
Forgiveness of loan by will of parent.
— When a parent has loaned money to a child and the child's spouse for the purchase of real property, and then the parent dies, leaving a will forgiving debts owed by the child to the parent, courts have interpreted the will provision in question to forgive the entire amount of the debt, even though the debt was a joint debt and the spouse was not mentioned in the will.
Martinez v. Block
, 1993-NMCA-093, 115 N.M. 762, 858 P.2d 429.
III. COMMUNITY PROPERTY.
Hybrid community ownership.
— The joint tenancy designation on a deed issued to a marital couple establishes a presumption that the marital couple holds the property in hybrid community property ownership. Property held in this manner is distinguishable from pure community property only in that each member of the marital couple has joint tenancy survivorship benefits in the community property.
In re Beery
, 295 B.R. 385 (2003).
Limited purpose for which income considered community property.
— New Mexico's community property law only considers a spouse's income as property of the other spouse for the purpose of distributing assets in the case of a divorce or legal separation, not to determine the equality of wages under the federal Equal Pay Act. Consistent with this reasoning is the fact that half of a husband's salary is not attributed to his wife for the purposes of determining his wife's social security, workers' compensation, or unemployment benefits.
Dean v. United Food Stores, Inc.
, 767 F. Supp. 236 (D.N.M. 1991).
Property held in joint tenancy can be community property.
Swink v. Sunwest Bank (In re Fingado)
, 113 Bankr. 37 (Bankr. D.N.M. 1990).
Rebuttable presumption that income is community.
— There is a rebuttable presumption that income received by either party during their marriage is community property.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
In divorce action where supreme court is shown no evidence adduced at the trial which will defeat the presumption that income received from a ranch during marriage is community property, the supreme court will treat that income as income of the community.
Moore v. Moore
, 1963-NMSC-047, 71 N.M. 495, 379 P.2d 784.
Property acquired by either or both spouses during their marriage
is presumptively community property. The presumption of community property, however, is subject to being rebutted by a preponderance of the evidence.
Stroshine v. Stroshine
, 1982-NMSC-113, 98 N.M. 742, 652 P.2d 1193.
Burden of proof of rebuttal.
— Property acquired by either or both spouses during their marriage is presumptively community property. A party asserting that such property is separate has the burden of presenting evidence that would rebut the presumption by a preponderance of the evidence.
Nichols v. Nichols
, 1982-NMSC-071, 98 N.M. 322, 648 P.2d 780.
Wife failed to rebut the presumption that property acquired during the marriage was community property.
— In a divorce proceeding, where wife appealed the district court's characterization of assets and debts as separate or community property and the court's division of marital assets and debts between her and husband, the district court did not err in determining that the parties' business was community property and not wife's separate property, because the district court's decision was supported by evidence in the record, including wife's failure to support her testimony with any documentation that gift of $2,000 was used to start the business, that the $2,000 amount was unlikely to have been sufficient to fund the launch of a corporation engaged in heavy earth-moving, and undisputed evidence that husband was involved from the outset in every aspect of creating and running the corporation. Wife failed to rebut the presumption that property acquired during the marriage was community property.
Autrey v. Autrey
, 2022-NMCA-042, cert. granted.
Burden of proving community property interests.
— In a division of property proceeding that resulted from the parties' dissolution of marriage, where husband claimed a community interest in a property located in Texas where husband and wife co-signed a note in order for wife's daughter to purchase the Texas property, the down payment of which was paid by the daughter, and where husband and wife eventually deeded the house to the daughter, and where husband testified that he did not know the source of the funds used for the down payment for the Texas property, there was substantial evidence to support the district court's finding that the parties had no real community interest in the Texas property.
Gabriele v. Gabriele
, 2018-NMCA-042, cert. denied.
Expended earnings not subject to distribution.
— In a division of property proceeding that resulted from the parties; dissolution of marriage, where husband claimed that wife converted community assets to her own use and that the community is entitled to reimbursement for the value of those assets, the district court did not err by not distributing wife's income earned during the marriage, because once community earnings are expended, rather than being converted into an asset, there is no community asset to be shared or managed, and the spouse making the expenditure has no duty to reimburse the community absent some special circumstance, and in this case there was no evidence to support husband's theory that wife converted her earnings during the marriage into community assets that would be available for distribution.
Gabriele v. Gabriele
, 2018-NMCA-042, cert. denied.
If the parties remarried after a divorce
decree brought an end to the marital community, a new community was created, and military benefits earned during the parties' second marriage came within the purview of Subsection B and were community property.
Pacheco v. Quintana
, 1986-NMCA-007, 105 N.M. 139, 730 P.2d 1, cert. quashed, 105 N.M. 94, 728 P.2d 845.
Transmutation into community property must be proved by clear and convincing evidence.
— Once the community property presumption is overcome by a preponderance of the evidence, a party must prove the transmutation of the separate property into community property by clear and convincing evidence.
Nichols v. Nichols
, 1982-NMSC-071, 98 N.M. 322, 648 P.2d 780.
Evidence that property has been transmuted from separate to community property must be by clear, strong and convincing proof.
Mitchell v. Mitchell
, 1986-NMCA-028, 104 N.M. 205, 719 P.2d 432, cert. denied, 104 N.M. 84, 717 P.2d 60.
Interest of each member of community is existing interest,
and not merely an expectancy.
U.S. Fid. & Guar. Co. v. Chavez
, 126 F. Supp. 227 (D.N.M. 1954).
When commingling of funds beneficial to community.
— In a divorce action if the community's expenditure of funds exceed the income, then any commingling of funds is to the benefit of the community rather than to the detriment of the community.
Corley v. Corley
, 1979-NMSC-040, 92 N.M. 716, 594 P.2d 1172.
Joint tenancy not created where community funds used to purchase.
— Because it was not the intention of husband and wife to hold the property as joint tenants, and because community funds were used to purchase the property, the trial court properly concluded that a joint tenancy was not created.
Wiggins v. Rush
, 1971-NMSC-092, 83 N.M. 133, 489 P.2d 641.
Realty purchased after marriage deemed community property.
— Where realty, though in the name of the husband, is purchased after marriage, it qualifies as community property, and the wife's interest in the property is equal to one-half of the equity.
Robnett v. N.M. Dep't of Human Servs. Income Support Div.
, 1979-NMCA-099, 93 N.M. 245, 599 P.2d 398.
Proceeds under covenant not to compete are not community property.
— The proceeds under a covenant not to compete negotiated as part of the sale of a business are not community property within the community property laws of this state, where the forthcoming payments were not included in the valuation of the stock and were to be received after divorce.
Lucas v. Lucas
, 1980-NMSC-123, 95 N.M. 283, 621 P.2d 500.
Medical license not community property.
— For purposes of community property laws, a medical license is not community property because it cannot be the subject of joint ownership.
Muckleroy v. Muckleroy
, 1972-NMSC-051, 84 N.M. 14, 498 P.2d 1357.
Negligence of one spouse will be imputed to other.
— New Mexico follows the rule that where a cause of action for negligence belongs to the community, negligence of one spouse will be imputed to and bar recovery by the other spouse.
Roberson v. U-Bar Ranch, Inc.
, 303 F. Supp. 730 (D.N.M. 1968).
Claim of spouse for medical expenses belong to community.
— A claim for damages to the community for medical expenses and loss of earnings, if any, of the husband or wife belong to the community since if the injury deprives the marital community of the earnings or services of the spouse, that is an injury to the marital community, and likewise there is a loss to the community where the community funds are expended for hospital and medical expenses, etc. Since the husband is usually the breadwinner, contributing definite earnings, the loss to the marital community resulting from an injury to him is more obvious.
Rodgers v. Ferguson
, 1976-NMCA-098, 89 N.M. 688, 556 P.2d 844, cert. denied, 90 N.M. 7, 558 P.2d 619.
Where medical expenses were community assets, any part of the wife's tort settlement intended to reimburse the community for medical expenses was also community property. It makes no difference whether the debt was paid with cash or with insurance proceeds; in any event, it was paid by the community.
Russell v. Russell
, 1987-NMCA-085, 106 N.M. 133, 740 P.2d 127.
Community does not acquire interest in corporation.
— Where the husband was paid for his services to a corporation in which he owned a one-half interest, which salary of course belonged to the community, and there was no proof in the record that the salary was not adequate or reasonable under the circumstances, having started at $7,500 in 1964 when he returned from college and increased to $35,000 in 1972, the trial court erred in concluding that the community had acquired an interest in the corporation.
Michelson v. Michelson
, 1976-NMSC-026, 89 N.M. 282, 551 P.2d 638.
Interest in spouse's share in professional corporation.
— A nonshareholder spouse cannot be awarded an interest, including goodwill, in a professional corporation greatly in excess of the husband's contractual withdrawal rights. The value of goodwill must be determined without dependency upon the professional spouse's potential or continuing income.
Hertz v. Hertz
, 1983-NMSC-004, 99 N.M. 320, 657 P.2d 1169.
Value of professional practice as community property.
— Although the individual right to practice a profession is a property right that cannot be classed as a community property, the value of the practice as a business at the time of dissolution of the community is community property.
Mitchell v. Mitchell
, 1986-NMCA-028, 104 N.M. 205, 719 P.2d 432, cert. denied, 104 N.M. 84, 717 P.2d 60.
Community lien not disturbed.
— Where the only separate funds of the husband used in the family home was the sum paid for the lot upon which it was constructed, and the evidence showed that the parties expended a considerable sum on the home after its completion (although whether community or separate funds were used for that purpose was unclear), that a few mortgage payments were made from community funds, that refinancing of the mortgage was accomplished by a note and mortgage signed by both the husband and wife and that the community credit was pledged thereby, and that both parties expended considerable time and effort in making improvements, and there was no attempt to trace the separate funds of the husband into the expenditures for the home after completion, the trial court's conclusion that the community had a lien of the one half of the difference between the original land price and the mortgage balance attributable to community expenditures of time, effort and money (as opposed to normal appreciations) would not be disturbed.
Michelson v. Michelson
, 1976-NMSC-026, 89 N.M. 282, 551 P.2d 638.
Court to know extent of community property in determining alimony and child support.
— Trial court should know the extent of the community property in making a determination as to alimony and child support.
Otto v. Otto
, 1969-NMSC-074, 80 N.M. 331, 455 P.2d 642.
Transfer of one-half interest community property upon death subject to federal estate tax.
— Certainly by any standard plaintiff's husband had at least a one-half interest in the community property during his lifetime, and it was his free choice and his determination that upon his death such interest should become the property of his widow, the plaintiff; since upon his death his one-half interest in the community estate was transferred to the plaintiff, this property was subject to the federal estate tax.
Hurley v. Hartley
, 255 F. Supp. 459 (D.N.M. 1966),
aff'd
, 379 F.2d 205 (10th Cir. 1967).
Life insurance.
— Where a third party is the insured and a spouse the beneficiary, the ownership of the policy proceeds paid to the spouse during marriage is determined by the general community property law.
Hickson v. Herrmann
, 1967-NMSC-083, 77 N.M. 683, 427 P.2d 36.
Insurance settlement proceeds acquired after dissolution of marriage.
— Following divorce proceedings, where wife filed a motion to impose a constructive trust on insurance proceeds that husband received after filing a bad faith claim against his insurance company for denying a property damage claim related to his truck, arguing that the insurance proceeds were community property because the truck was community property and the insurance policy covering the truck was paid for with community funds, and where husband argued that the settlement proceeds were not a community asset because the settlement occurred after the dissolution of marriage and that wife was not entitled to any of the insurance proceeds because wife's actions played a significant part in the decision by the insurance company to wrongfully deny husband's property damage claim under his automobile insurance policy, the district court erred in granting husband's motion for summary judgment, because insurance proceeds that are paid as a result of a policy that is community property, where that policy was paid for with community funds, are community property, and there was nothing in the record permitting a reasonable inference that wife acted with tortious intent or motive to deprive the community of a community asset.
Martinez v. Martinez
, 2017-NMCA-032.
Vacation and sick leave.
— A spouse's unused vacation leave and unused sick leave are community property and are divisible upon divorce.
Arnold v. Arnold
, 2003-NMCA-114, 134 N.M. 381, 77 P.3d 285.
Military retirement benefits.
— Military retirement benefits are community property.
Walentowski v. Walentowski
, 1983-NMSC-097, 100 N.M. 484, 672 P.2d 657,
superseding Espinda v. Espinda
, 1981-NMSC-098, 96 N.M. 712, 713 P.2d 1264,
reinstating LeClert v. LeClert
, 1969-NMSC-049, 80 N.M. 235, 453 P.2d 755.
Military retirement pay.
— The rule of
LeClert v. LeClert
, 1969-NMSC-049, 80 N.M. 235, 453 P.2d 755 that military retirement pay is community property has been reinstated in New Mexico, and applies to those final judgments entered prior to the decision in
McCarty v. McCarty
, 453 U.S. 210, 101 S. Ct. 2728, 69 L. Ed. 2d 589 (1981). The Uniform Services Former Spouses' Protection Act 10 U.S.C. § 1408 (c)(1) applies retroactively only to judgments which were final after the announcement of the
McCarty
opinion on June 26, 1981.
Norris v. Saueressig
, 1986-NMSC-024, 104 N.M. 76, 717 P.2d 52.
Disability retirement pay is community property
for purposes of distribution of property upon dissolution of marriage.
Stroshine v. Stroshine
, 1982-NMSC-113, 98 N.M. 742, 652 P.2d 1193.
Pension plan.
— The community's interest in a pension plan that is vested but unmatured is the amount of benefits earned during coverture.
Mattox v. Mattox
, 1987-NMCA-021, 105 N.M. 479, 734 P.2d 259.
Medical benefits.
— United States civil service medical retirement benefits are community property.
Luxton v. Luxton
, 1982-NMSC-087, 98 N.M. 276, 648 P.2d 315.
Valuation of pension benefits.
— In dividing community property, pension benefits should be valued using monthly benefit which husband received at time of divorce since increases coming after the date of the divorce are the husband's separate property.
Madrid v. Madrid
, 1984-NMCA-066, 101 N.M. 504, 684 P.2d 1169.
Absent an express agreement by the parties to the contrary, the only retirement penalties to be imposed against the nonemployee spouse's share of the pension being distributed pursuant to a pay-as-it-comes-in method are those penalties that were actually applied to calculate the employee spouse's pension benefits, and not any hypothetical penalties.
Franklin v. Franklin
, 1993-NMCA-077, 116 N.M. 11, 859 P.2d 479, cert. denied, 115 N.M. 795, 858 P.2d 1274.
Conveyance to husband and wife presumed as community.
— A conveyance of real property to a husband and wife, by deed describing them as husband and wife, gives rise to a presumption that the property is taken by them as community property. 1959 Op. Att'y Gen. No. 59-70 (rendered under former law).
Community property "is not liable for contracts of wife,
made after marriage". The statute, as we construe it, means the wife's separate contracts as well as those attempted to be made by her for the community while the husband is the manager of the community, or her separate contracts in the event she would be substituted as head of the community. 1956 Op. Att'y Gen. No. 56-6499 (rendered under former law).
Law reviews.
— For article, "Federal Taxation of New Mexico Community Property," see 3 Nat. Resources J. 104 (1963).
For symposium, "Tax Implications of the Equal Rights Amendment," see 3 N.M.L. Rev. 69 (1973).
For article, "The Community Property Act of 1973: A Commentary and Quasi-Legislative History," see 5 N.M.L. Rev. 1 (1974).
For article, "Tax Consequences of Divorce in New Mexico," see 5 N.M.L. Rev. 233 (1975).
For comment, "In-Migration of Couples from Common Law Jurisdictions: Protecting the Wife at the Dissolution of the Marriage," see 9 N.M.L. Rev. 113 (1978-79).
For note, "Clouded Titles in Community Property States: New Mexico Takes a New Step," see 21 Nat. Resources J. 593 (1981).
For article, "Survey of New Mexico Law, 1979-80: Commercial Law," see 11 N.M.L. Rev. 69 (1981).
For article, "Survey of New Mexico Law, 1979-80: Domestic Relations and Juvenile Law," see 11 N.M.L. Rev. 134 (1981).
For note, "Community Property - Profit Sharing Plans - Approval of Undiscounted Current Actual Value and Distribution by Promissory Note Secured by Lien on Separate Property," see 11 N.M.L. Rev. 409 (1981).
For note, "Community Property - Transmutation of Community Property: A Preference for Joint Tenancy in New Mexico?" see 11 N.M.L. Rev. 421 (1981).
For note, "Community Property - Valuation of Professional Goodwill," see 11 N.M.L. Rev. 435 (1981).
For annual survey of New Mexico law relating to estates and trusts, see 12 N.M.L. Rev. 363 (1982).
For note, "Community Property - Spouse's Future Federal Civil Service Disability Benefits are Community Property to the Extent the Community Contributed to the Civil Service Fund During Marriage: Hughes v. Hughes," see 13 N.M.L. Rev. 193 (1983).
For article, "New Mexico Community Property Law and the Division of Retirement Plan Benefits Pursuant to the Dissolution of Marriage," see 13 N.M.L. Rev. 641 (1983).
For note, "Community Property - Appreciation of Community Interests and Investments in Separate Property in New Mexico: Portillo v. Shappie," see 14 N.M.L. Rev. 227 (1984).
For case note, "Community Property Law - the Apportionment of Marital Community Assets: Dorbin v. Dorbin," see 18 N.M.L. Rev. 613 (1988).
For annual survey of New Mexico family law, 19 N.M.L. Rev. 692 (1990).
Am. Jur. 2d, A.L.R. and C.J.S. references. —
Profits from business operating on spouse's capital as community property, 29 A.L.R.2d 530.
Transmutation of community funds or property into property held by spouses in joint tenancy, 30 A.L.R.2d 1241.
Spouse's professional degree or license as marital property for purposes of alimony, support, or property settlement, 4 A.L.R.4th 1294.
Divorce and separation: appreciation in value of separate property during marriage without contribution by either spouse as separate or community property, 24 A.L.R.4th 453.
Divorce property distribution: real estate or trust property in which interest vested before marriage and was realized during marriage, 60 A.L.R.4th 217.
Divorce and separation: workers' compensation benefits as marital property subject to distribution, 30 A.L.R.5th 139.
41 C.J.S. Husband and Wife § 128 et seq.