Teresa flatly refused, and Peñalosa, on the afternoon of August 26, forcibly removed López from his house arrest and confiscated many of his remaining personal belongings. That evening the papers from the Holy Office of the Inquisition were formally served.
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As noted above, Peñalosa had already seized a considerable amount of ex-governor López's property, and in the days that followed, portions of this property were sold to meet his creditors, a great deal of it to Peñalosa's agents at knocked-down prices. Posada and Peñalosa were now at swords' points, and the next few months saw a great deal of legal skirmishing. In the early fall of 1663, Peñalosa actually arrested the custodian for infringing on the civil authority, and held him in Santa Fe at the Casa Real for nine days (October 1-9). Again, the Omnimoda of Adrian VI was invoked by Posada and denied by Peñalosa. It was the only recorded action of this kind, the legal incarceration of a Franciscan prelate by a governor in seventeenth-century New Mexico. Governor Peñalosa had intended to actually expel Posada but lost his nerve. Posada, once freed, began a collection of evidence and witnesses that eventually brought the Inquisition into the picture.
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Nearing the end of his governorship, Peñalosa made certain attempts to protect himself from the legal investigation that would follow the end of his period as governor. He removed a number of documents that he considered dangerous from the provincial archives and took others to organize his defense against expected charges. Peñalosa attempted to counter the clerical accusation that he had appointed only personal friends to lucrative offices. In late 1663, but backdated to May 1662, he made appointments of escudero , or temporary substitute holder of the encomiendas, vacated by the arrest of two adherents of ex-governor López, Diego Romero and Francisco Gómez Robledo. Cristóbal Durán y Chávez was issued an escuderia to the former encomienda, and Juan Domínguez de Mendoza to the latter. Durán y Chávez had, in fact, been jailed by Peñalosa, and Juan Domínguez had been a follower of López de Mendizábal. Of course, Juan Domínguezs brother, Tomé, was faithful to the Church party, and the Domínguez de Mendoza family was influential in New Mexico.
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In the early part of 1664, Peñalosa set out for Mexico City, leaving Tomé Domínguez de Mendoza as acting governor. On his way south, Peñalosa met the new governor, Juan Durán de Miranda, who reached New Mexico in the spring of 1664. Meanwhile, Posada continued to collect evidence against Peñalosa. Like Manso and López before him, Peñalosa was somewhat of a Don Juan. In Parral, on his way to New Mexico, Peñalosa had established a liaison with a young woman, Maria de Barrios, who later bore him a daughter. Peñalosa flaunted his mistress in Santa Fe, establishing her in the governor's palace, and had a number
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