2019 New Mexico Statutes
Chapter 40 - Domestic Affairs
Article 3 - Property Rights
Section 40-3-14 - Management and control of other community personal property.

A. Except as provided in Subsections B and C of this section, either spouse alone has full power to manage, control, dispose of and encumber the entire community personal property.

B. Where only one spouse is:

(1) named in a document evidencing ownership of community personal property; or

(2) named or designated in a written agreement between that spouse and a third party as having sole authority to manage, control, dispose of or encumber the community personal property which is described in or which is the subject of the agreement, whether the agreement was executed prior to or after July 1, 1973; only the spouse so named may manage, control, dispose of or encumber the community personal property described in such a document evidencing ownership or in such a written agreement.

C. Where both spouses are:

(1) named in a document evidencing ownership of community personal property; or

(2) named or designated in a written agreement with a third party as having joint authority to dispose of or encumber the community personal property which is described in or the subject of the agreement, whether the agreement was executed prior to or after July 1, 1973; both spouses must join to dispose of or encumber such community personal property where the names of the spouses are joined by the word "and." Where the names of the spouses are joined by the word "or," or by the words "and/or," either spouse alone may dispose of or encumber such community personal property.

History: 1953 Comp., § 57-4A-8, enacted by Laws 1973, ch. 320, § 10; 1975, ch. 246, § 6.

Power to manage community property. — Either spouse may dispose of community property unless the disposition violates the spouse's fiduciary duty to the other spouse; the fiduciary duty in question involves the assessment of the equities of the particular circumstances, and in assessing the equities, a court should consider whether the disposition furthers both spouses' common benefit and whether the disposition amounted to a substantial portion of the community property. Khalsa v. Puri, 2015-NMCA-027, cert. denied, 2015-NMCERT-001.

Where wife requested reallocation of her late husband's half of community property due to his alleged excess expenditure of community funds prior to his death, the challenged expenditures, consisting of expenses for family trips, payments to family members, expenses incurred during visits with guests, medical expenses, and payments for religious services, were properly held to be beneficial to the community, in part because wife failed to provide evidence that she lacked knowledge of or did not consent to such expenditures; other charitable contributions were held to be reasonable because they were not excessive compared to the value of the entire community estate. Khalsa v. Puri, 2015-NMCA-027, cert. denied, 2015-NMCERT-001.

Power to manage and control and actual availability of entire community personal property distinguished. — Although this section gives either spouse alone the full power to manage, control, dispose of and encumber the entire community personal property, there exists a distinction between the power to manage and control and actual availability. Since 40-3-10 NMSA 1978 provides that a spouse's one-half interest in the community property is available to satisfy his or her separate debts, it does not necessarily follow that the power given by this section makes the entire community personal property always available to each spouse. Herrera v. Health & Soc. Servs., 1978-NMCA-118, 92 N.M. 331, 587 P.2d 1342, cert. denied sub nom. Human Servs. Dep't v. Herrera, 92 N.M. 353, 588 P.2d 554.

Spouse's signature is effective to create community obligation payable from the community's personal property. Shadden v. Shadden, 1979-NMCA-078, 93 N.M. 274, 599 P.2d 1071, cert. denied, 93 N.M. 172, 598 P.2d 215, overruled on other grounds by Huntington Nat'l Bank v. Sproul, 1993-NMSC-051, 116 N.M. 254, 861 P.2d 935.

Ability of each spouse to manage and control business partnership. — Where the income tax returns are filed as a partnership and where the wife occasionally accompanies her husband and assists him with job-related demonstrations although the wife is not employed by her husband's company, they are engaged in business as a marital partnership in which each has full power alone to manage and control the business. Amador v. Lara, 1979-NMCA-129, 93 N.M. 571, 603 P.2d 310.

Community loss recovered by wife as "head of the household." — Where a wife brings an action to recover for personal injuries and other damages sustained in an automobile accident, she alone may recover damages for her physical injury, pain and suffering, and she has the right to recover the entire community loss as the "head of the household" with full power to manage and control personal community property. Amador v. Lara, 1979-NMCA-129, 93 N.M. 571, 603 P.2d 310.

Testator's separate and community personal estate as obligor to promissory note. — Where a testator included in his will a promissory note payable to himself from himself, his separate and community personal estate became substituted as the obligor on the note and his beneficiary became the obligee. In re Estate of Shadden, 1979-NMCA-078, 93 N.M. 274, 599 P.2d 1071, cert. denied, 93 N.M. 172, 598 P.2d 215, overruled on other grounds by Huntington Nat'l Bank v. Sproul, 1993-NMSC-051, 116 N.M. 254, 861 P.2d 935.

Subsequent marriage no invalidation of decedent's power to designate mother as beneficiary. — In an action by an employee's widow who claims entitlement to all death benefits under a health benefits plan, although the decedent made his mother the beneficiary, the decedent's power to designate his mother as beneficiary of all of the death benefits was not invalidated by his subsequent marriage or by the community property law. Barela v. Barela, 1980-NMCA-157, 95 N.M. 207, 619 P.2d 1251.

Revocation of gift. — Each spouse has the power to manage and dispose of the community's personal property, subject to a fiduciary duty to the other spouse, and absent intervening equities, a gift of substantial community property to a third person without the other spouse's consent may be revoked and set aside for the benefit of the aggrieved spouse. Roselli v. Rio Cmtys. Serv. Station, Inc., 1990-NMSC-018, 109 N.M. 509, 787 P.2d 428.

Where the husband had consented to neither the wife's removal of community funds from a joint account prior to the parties' separation nor to the wife's gift of the funds to their two daughters, the husband was entitled to recover his share of the gifts from the wife's property. Fernandez v. Fernandez, 1991-NMCA-001, 111 N.M. 442, 806 P.2d 582.

Payment of life insurance policy premiums with community funds results in a community property interest in policy proceeds. Roselli v. Rio Cmtys. Serv. Station, Inc., 1990-NMSC-018, 109 N.M. 509, 787 P.2d 428.

Expended earnings not subject to distribution. — Since the expenditures of the spouses' earnings and other community funds during a period of separation were not shown to be contrary to any court order or in violation of a fiduciary duty owed by one party to the other, the trial court erred in making its apportionment of community assets by awarding the husband funds which no longer existed and then allowing the wife an offsetting award out of other existing community property. Irwin v. Irwin, 1996-NMCA-007, 121 N.M. 266, 910 P.2d 342.

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 note, "Coal Leases Held Real Property," see 21 Nat. Resources J. 415 (1981).

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 article, "Survey of New Mexico Law, 1979-80: Commercial Law," see 11 N.M.L. Rev. 69 (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 annual survey of New Mexico commercial law, see 13 N.M.L. Rev. 293 (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 §§ 17, 19 to 48, 60 to 80, 102, 103; 41 Am. Jur. 2d Husband and Wife § 12 et seq.

Power of either spouse, without consent of other, to make gift of community property or funds to third party, 17 A.L.R.2d 1118.

Insurable interest of husband or wife in other's property, 27 A.L.R.2d 1059.

41 C.J.S. Husband and Wife § 158.