United States Fidelity & Guaranty Co. v. Chavez

126 F. Supp. 227, 1954 U.S. Dist. LEXIS 2469
CourtDistrict Court, D. New Mexico
DecidedDecember 7, 1954
DocketCiv. A. No. 2508
StatusPublished
Cited by3 cases

This text of 126 F. Supp. 227 (United States Fidelity & Guaranty Co. v. Chavez) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. Chavez, 126 F. Supp. 227, 1954 U.S. Dist. LEXIS 2469 (D.N.M. 1954).

Opinion

ROGERS, District Judge.

This action involves the respective rights of the United States Fidelity and Guaranty Company of Baltimore, Maryland, hereinafter referred to as “bonding company”, the corporate surety on a County Treasurer’s bond written for Manuel C. Chavez, on the one hand, and Mary S. Chavez, wife of Manuel C. Chavez, on the other hand, in and to four tracts of real estate in Valencia County, attached in this cause, which was a proceeding instituted by the bonding company against Manuel C. Chavez, to recover losses paid by the bonding company on some bonds, the losses being caused by shortages of Manuel Chavez’ during the two bonding periods.

Jurisdiction in this case is predicated upon diversity of citizenship, as between the bonding company, a Maryland corporation, and Manuel C. Chavez, a resident of New Mexico, and the amount involved, which was alleged and has proved to be in excess of $3,000. The defendant Chavez was elected Treasurer of Valencia County for two two-year terms, commencing January 1, 1949, and the second commencing January 1, 1951. By the law of the State of New Mexico, the defendant was required to file a surety bond running to the State of New Mexico, conditioned upon the faithful performance of his duties as County Treasurer, the rendering of true accounts of his office, performance of his duties as such, as required by law, and the paying over of all monies coming into his hands by virtue of the office. A bond in similar, if not identical, terms, was issued by the bonding company for the second term commencing January 1, 1951.

During the second term of the defendant, audits of his office reflected shortages for the first period in the amount of $20,908.02, and in the second term, of $44,021.45. The bonding company has, as above stated, instituted this suit to recover the above amounts which it paid to the State of New Mexico, basing its two causes of action, one for each elective term, upon the indemnity provisions contained in the applications made by Manuel C. Chavez for the issuance of each of said bonds.

Manuel C. Chavez did not enter his appearance in this cause, and on the trial date, a judgment was rendered against him by default, for each of the amounts of the shortage paid by the bonding company, together with attor[229]*229neys’ fees for the bonding company’s attorneys, totalling $5,000. During the pendency of this cause, the depositions of Manuel C. Chavez and Mary S. Chavez, intervenor, were taken, the net effect of which is that the defendant Manuel C. Chavez denies any knowledge as to any embezzlement of state funds, and any knowledge as to where the amounts for which he is charged as being short, went.

Mary S. Chavez, the wife, was granted leave, during the pendency of this cause, to file her petition in intervention, to establish her claims against the four tracts of land which were attached by the Marshal of this District. In her petition, denominated “Answer in Intervention”, she alleges that on April 27, 1951, title was taken on Tract 7-B-2-B, Map 79 of the Middle Rio Grande Conservancy District, consisting of 12 acres, by Manuel C. Chavez and Mary S. Chavez; that the said deed by which title was so taken, contained no designation of the grantees as husband and wife. The intervenor claims an undivided one-half interest in that property, as a tenant-in-common with Manuel C. Chavez. She further alleges that Tract 7 — B—1, Map 79, Middle Rio Grande Conservancy District, consisting of 8.40 acres, was deeded to Manuel C. Chavez prior to the marriage of the parties, but that considerable improvements have been made thereon by community funds, and she claims community interest in the value of the improvements constructed on this property. The third and fourth tracts can be considered as one unit, inasmuch as, according to Mrs. Chavez’ claim, they were included in one quitclaim deed made to Manuel C. Chavez and Mary S. Chavez, his wife, and cover Tract 7-B-4, Map 79, containing .30 acres, and Tract 7-B-6, Map 79, containing 13 acres. As to these tracts, she claims a one-half undivided community interest therein.

The above constitutes all of the facts adduced at the trial of this cause. No proof was offered by the bonding company plaintiff, that any of the shortages were converted by Manuel C. Chavez, and certainly no evidence was offered that any funds representing the shortage were used by either the defendant or intervenor, in acquiring title to or improvements of the tracts here involved. The case thus devolves into one requiring the application of the pertinent law to the situation above outlined.

The Court will take up in.its decision as to the relative rights of an attaching creditor and those of a wife, to: first, the property conveyed to Manuel C. Chavez prior to coverture; next, the property granted to Manuel C. Chavez and Mary S. Chavez, listing them by name, but with no description as to marital status; and lastly, the conveyance to these persons designating them as husband and wife.

The Court is of the opinion that the premises conveyed to the defendant prior to coverture is his separate property. See Section 65-305, N.M.S.A., 1941, which provides that all property owned by the husband before marriage, and that acquired afterwards by gift, bequest, devise or descent, is his separate property. The premises having been conveyed to him prior to coverture, were owned by him before marriage, and are within the first clause of the above-discussed statute. In connection with this property, the intervenor-wife, alleges that during their marriage, improvements consisting of dwelling house and appurtenances thereto, were constructed with community funds, and she claims a community interest in the value of improvements constructed on said property.

The law on this latter question appears to be definitely settled in New Mexico, by the case of McElyea v. McElyea, 49 N.M. 322, 163 P.2d 635. In that case the Supreme Court held that property acquired in New Mexico takes its status as community or separate property at the time and by the manner of its acquisition. The case stands for the further point that 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 [230]*230spouses. It therefore appears that the question of subsequent erection of improvements with community funds is immaterial to the respective rights of the two contenders, here, and at most, would merely give rise to an indebtedness as between Mr. and Mrs. Chavez. The Court therefore holds that Tract 7-B-l, Map 79, is subject to sale under the attachment of the bonding company.

As to Tract 7-B-2-B, acquired by deed running to Manuel C. Chavez and Mary S. Chavez of Route 2, Box 534, Los Lunas, the Court is of the opinion that the estate conveyed by such deed was that of tenants-in-common. Accordingly, that the attachment seized the undivided one-half interest in Manuel C. Chavez, in and to ■ the said premises, but that the interest of Mary S. Chavez, his wife, was not affected thereby. The Court is of the opinion that this question is covered by Section 65-401, supra, the pertinent provisions of which are as follows:

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Cite This Page — Counsel Stack

Bluebook (online)
126 F. Supp. 227, 1954 U.S. Dist. LEXIS 2469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-chavez-nmd-1954.