The peace of 1763 put an end to the campaign. Cevalhos, in pursuance of orders he received, was to deliver Colonia to Pedro de Sarmento, now appointed its governor. Rio Grande and other garrisons (unjustly, say the Portuguese) remained under the dominion of the crown of Spain until the year 1776, when they were restored by General Bohemi. In this interval, the Spaniards extended their possessions into the interior, and constructed the fort of St. Tecla, which was demolished at the restoration of Rio Grande. In 1774, Don John Joze Vertis, having with sinister views taken his station with eight hundred troops, on a plain near the pass of Taquatinguay, was attacked and destroyed by two companies of Paulistas, commanded by captains Bandeiro and Carneiro. During the tranquillity of peace, an armament, commanded by Cevalhos, for the purpose of seizing the island of St. Catharina, anchored in front of the colony, who were unprovided with sufficient provisions, the people having been sustained by the stores of the royal magazines, which it was alleged would only last five days. Assigning as a reason the impossibility of receiving succours, the governor, with a probable want of courage, offered to capitulate, which offer being rejected, he surrendered at discretion, with the exception of some officers, their families, and a few inhabitants, who, by paying a sum of money, obtained permission to go to Rio de Janeiro. The greater part of the colony were conducted at their own expense to Mendonça and Cordova, in order to augment the population and agriculture of those districts. Cevalhos was cruel enough not to exempt the women from this march, some of whose husbands were sent dangerously ill to the hospital of Buenos Ayres; others were seen carrying in their arms their infants dying with the small pox. The loss of the island of St. Catharina, then more considerable for its ultimate advantages, than for its present value, produced a treaty of peace between the two nations, in the same year, 1777, with an article to establish a new line of division in the southern part only, one surrendering the aforesaid island, the other Colonia; and in the province of Uruguay, a greater portion of neutral territory to remain between the small rivers Chuy, the ancient limit, and Thahim. The demarcation was to proceed in a direct line by the source of the river Arica, northward to the mouth of the Peperi-guaçu; and passing the Setequeades (Seven Falls) to continue up the Igurey to the Paraguay.