2019 New Mexico Statutes
Chapter 40 - Domestic Affairs
Article 3 - Property Rights
Section 40-3-12 - Presumption of community property; presumption of separate property where property acquired by married woman prior to July 1, 1973.

A. Property acquired during marriage by either husband or wife, or both, is presumed to be community property.

B. Property or any interest therein acquired during marriage by a woman by an instrument in writing, in her name alone, or in her name and the name of another person not her husband, is presumed to be the separate property of the married woman if the instrument in writing was delivered and accepted prior to July 1, 1973. The date of execution or, in the absence of a date of execution, the date of acknowledgment, is presumed to be the date upon which delivery and acceptance occurred.

C. The presumptions contained in Subsection B of this section are conclusive in favor of any person dealing in good faith and for valuable consideration with a married woman or her legal representative or successor in interest.

History: 1953 Comp., § 57-4A-6, enacted by Laws 1973, ch. 320, § 7.

I. GENERAL CONSIDERATION.

Property takes status as community or separate at time and by 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. Shanafelt v. Holloman, 1956-NMSC-047, 61 N.M. 147, 296 P.2d 752.

Proof of transmutation. — Transmutation is a general term used to describe arrangements between spouses to convert property from separate property to community property and vice versa. While transmutation is recognized, the party alleging the transmutation must establish the transmutation of property to community property by clear, strong and convincing proof. Allen v. Allen, 1982-NMSC-118, 98 N.M. 652, 651 P.2d 1296.

Wife was indispensable party in action brought by husband to quiet title to realty deeded to both husband and wife. Brown v. Gurley, 1954-NMSC-025, 58 N.M. 153, 267 P.2d 134.

Deed with no description of marital status created tenancy in common. — A quitclaim deed conveying land to a husband and wife by name and address but with no description of marital status created a tenancy in common; the address appearing after their names was not sufficient to express any other intention. U.S. Fid. & Guar. Co. v. Chavez, 126 F. Supp. 227 (D.N.M. 1954).

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.

Requirements for overcoming presumption of fraud in community property conveyance. — The burden was on husband's heirs to overcome the presumption of fraud in action to nullify conveyance of community property for fraud. They were required to show: (a) payment of an adequate consideration; (b) full disclosure to the wife as to her rights and the value and extent of the community property; and (c) that the wife had competent and independent advice in conferring the benefits upon her husband. Trujillo v. Padilla, 1968-NMSC-090, 79 N.M. 245, 442 P.2d 203.

Burden upon contestant asserting separate character. — The party seeking to rebut the presumption of community property has the burden of introducing factual evidence that the disputed property meets a criterion of separate property as defined in 40-3-8 NMSA 1978. C & L Lumber & Supply, Inc. v. Texas Am. Bank/Galeria, 1990-NMSC-056, 110 N.M. 291, 795 P.2d 502.

Property acquired during marriage is presumed to be community property and if community funds are used to purchase the separate property of either spouse, such property becomes community property. Marquez v. Marquez, 1973-NMSC-084, 85 N.M. 470, 513 P.2d 713.

Presumption. — In New Mexico, there is a clearly stated presumption of community property. Swink v. Sunwest Bank (In re Fingado), 113 Bankr. 37 (Bankr. D.N.M. 1990).

The presumption of community property arises from the naked fact that it was acquired during marriage. Hollingsworth v. Hicks, 1953-NMSC-045, 57 N.M. 336, 258 P.2d 724.

Property acquired during marriage by either spouse is presumed to be community property. The recitation in a deed not signed by both spouses that the property is the "sole and separate property" of a married man does not affect this presumption. C & L Lumber & Supply, Inc. v. Texas Am. Bank/Galeria, 1990-NMSC-056, 110 N.M. 291, 795 P.2d 502.

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.

Presumption part of Spanish property law. — The presumption that all property acquired after marriage is community property was part of Spanish community property law and was recognized as an element of the community property system in this state prior to the time of its statutory pronouncement by Laws 1907, ch. 37, § 10 (now repealed and replaced by what are now 40-3-8 and 40-3-12(A) NMSA 1978). Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

II. PRESUMPTION OF COMMUNITY PROPERTY.

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.

Insurance proceeds on policy paid for with community funds. — 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. 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.

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.

Federal civil service disability benefits. — To the extent the community contributed, a husband's future federal civil service disability benefits are community property subject to division upon dissolution of a marriage. Hughes v. Hughes, 1981-NMSC-110, 96 N.M. 719, 634 P.2d 1271.

General presumption of community property is certainly not conclusive. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Burden upon contestant asserting separate character. — The contestant asserting the separate character of the property has not only the burden of going forward with his evidence, but of establishing separate ownership by a preponderance of evidence. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

It is settled law in New Mexico that property acquired in this state during coverture is presumptively community property, and one asserting it to be separate estate has the burden of establishing such fact by a preponderance of the evidence. Mounsey v. Stahl, 1956-NMSC-110, 62 N.M. 135, 306 P.2d 258.

Presumption does not obtain if intention other than community expressed. — Where property is acquired by husband and wife by an instrument in writing in which they are described as such, the presumption as to community property does not obtain if a different intention is expressed in the instrument. Shanafelt v. Holloman, 1956-NMSC-047, 61 N.M. 147, 296 P.2d 752.

Showing that community earning exceeded community expenses, even though the excess be slight, supports a finding of community property. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Relative amounts of separate property and community property which make up commingled total is an important factor. Conley v. Quinn, 1959-NMSC-065, 66 N.M. 242, 346 P.2d 1030.

Where commingled with large amount of separate property. — 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.

Preponderance of evidence needed to overcome presumption. — Proof to overcome the presumption of community ownership need only amount to a preponderance of the evidence. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Where the acquisition of property is involved, the presumption of community property may be overcome by a preponderance of evidence. Shanafelt v. Holloman, 1956-NMSC-047, 61 N.M. 147, 296 P.2d 752; Hughes v. Hughes, 1981-NMSC-110, 96 N.M. 719, 634 P.2d 1271.

The presumption that property acquired after marriage is community property is rebutted when the separate character of the property in question is proved by a preponderance of the evidence in the trial court. Conley v. Quinn, 1959-NMSC-065, 66 N.M. 242, 346 P.2d 1030 (decided under former law).

The presumption that property acquired during marriage is community property may be rebutted by a preponderance of the evidence. Mitchell v. Mitchell, 1986-NMCA-028, 104 N.M. 205, 719 P.2d 432, cert. denied, 104 N.M. 84, 717 P.2d 60; Arch, Ltd. v. Yu, 1988-NMSC-101, 108 N.M. 67, 766 P.2d 911.

Warranty deeds conveying joint title. — Introduction of warranty deeds conveying title to husband and wife was sufficient to establish prima facie that the real estate was held as community property. Arch, Ltd. v. Yu, 1988-NMSC-101, 108 N.M. 67, 766 P.2d 911.

Presumption still has force and effect after testimony to rebut. — It cannot be said that upon the mere introduction of testimony to rebut the presumption of community property that the presumption is no longer to be considered of any force and effect. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Substantial evidence needed to uphold presumption on appeal. — When evidence in the case casts doubt upon the issue, a finding of community ownership will be upheld as supported by substantial evidence. In counterpart, when the evidence of separate ownership is clear and no evidence aside from the presumption exists to the contrary, circumstantial or otherwise, a finding of community ownership should be overturned upon appeal as not supported by substantial evidence. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Upon appeal the question whether the presumption of community property has been overcome as a matter of law depends upon whether there is substantial evidence to support the finding of the trial court. The cases are numerous which hold the substantial evidence rule applies in such case, as does the usual appellate rule of indulging all presumptions in favor of the judgment. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

Presumption not rebutted. — The words and conduct of a disingenuous spouse in misrepresenting that real estate was his separate property were not sufficient to rebut a presumption that property was held as a community interest. Arch, Ltd. v. Yu, 1988-NMSC-101, 108 N.M. 67, 766 P.2d 911.

III. SEPARATE PROPERTY.

Property acquired with independent funds as separate. — When it is established that community funds equal or fall short of community expenditures, property acquired by the husband, having independent funds at his disposal, should be held, by legitimate inference, to be his separate property. Campbell v. Campbell, 1957-NMSC-001, 62 N.M. 330, 310 P.2d 266.

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.

Earnings of wife belong to community where working for husband's partnership. Dale v. Dale, 1953-NMSC-081, 57 N.M. 593, 261 P.2d 438.

Burden of proving nature and value of improvements made to separate property. — 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.

Where origin of property preceded marriage presumption no longer prevails. — When, upon the exhibition of the whole title, it appears that the origin of property preceded the marriage, and that it was separate property, the presumption no longer prevails. Hollingsworth v. Hicks, 1953-NMSC-045, 57 N.M. 336, 258 P.2d 724.

Preponderance of evidence needed to overcome presumption. — The contestant asserting the separate character of property has not only the burden of going forward with the evidence, but of establishing separate ownership by a preponderance of the evidence. White v. White, 1987-NMCA-032, 105 N.M. 600, 734 P.2d 1283.

Separate property must be traceable and identifiable. — If separate property has been so intermingled with community property that it cannot be traced or identified, the evidence of separate status is insufficient to overcome the presumption of 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.

Law reviews. — For comment on Thaxton v. Thaxton, 75 N.M. 450, 405 P.2d 932 (1965), see 6 Nat. Resources J. 298 (1966).

For article, "The Community Property Act of 1973: A Commentary and Quasi-Legislative History," see 5 N.M.L. Rev. 1 (1974).

For article, "Survey of New Mexico Law, 1979-80: Commercial Law," see 11 N.M.L. Rev. 69 (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 - 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, "Survey of New Mexico Law, 1982-83: Domestic Relations," see 14 N.M.L. Rev. 135 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Community Property §§ 56 to 65.

What contract, understanding, circumstances, etc., will render a wife's personal earnings separate property, 67 A.L.R.2d 708.

Change of domicil as affecting character of property previously acquired as separate or community property, 14 A.L.R.3d 404.

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: equitable distribution doctrine, 41 A.L.R.4th 481.