On January 23, 1800, Governor Fernando Chacon granted a request by Francisco Aragon and twenty-nine others who wished to settle at Cebolleta and establish a town there.

Chacon ordered Alcalde Jose Manuel Aragon of the Pueblo of Laguna to formally transfer the approved area to the receivers of the grant.

As New Mexico was still under the control of Spain, and the Alcalde was appointed by the Spanish king, this order had the force of a royal command.

[6] The colonists had been granted an area bordered “On the north, by the San Mateo Mountains; on the east, by the Zia Road and Pedro Padilla Valley; on the south, by the Mesa del Bagilan, which adjoins the Paquate ranch; and on the west, by the San Mateo Mountains.”[citation needed] In 1801, the Navajo returned, believing the land to be theirs, and forced the colonists to leave.

In gratitude, the inhabitants of the Town of Cebolleta, recognized the Laguna claim to certain lands to the south, known as the Rancho de Paquate, which the colonists had previously considered their own.