OPINION ON MOTION FOR REHEARING

O'CONNOR, Justice.

This is an appeal from a summary judgment in favor of Harris County and the Assessor and Collector of Taxes for Harris County. We grant the county's motion for second rehearing, withdraw our opinion issued on rehearing dated March 8, 1990, issue this, and affirm.

First Bank of Deer Park sued Harris County and the Assessor and Collector of Taxes for Harris County (collectively "Harris County") for a refund of taxes it paid from 1979 through 1982, in the total amount of $47,236.80. During those years, Harris County assessed a tax on bank stock under the authority of the property tax provisions of the Texas Tax Code (the Tax Code):

This state has jurisdiction to tax stock in a banking corporation that is incorporated in this state or, if the bank is a national bank, is located in this state.

TEX. TAX CODE ANN. Sec. 11.02(d) (Vernon 1982). As of January 1, 1985, bank stock is no longer subject to taxation.

On December 8, 1983, the Bank protested the tax assessments in a letter to the county tax assessor. In that letter, the Bank stated its reason for protest as:

Without waiving any other right or remedy, First Bank of Deer Park pursuant to TEX. TAX CODE ANN. Sec. 31.11 (Vernon 1982), hereby applies for a refund of all monies paid for taxes levied by Harris County on the stock of the Bank in 1980, 1981 and 1982 tax years.

As you are well aware, the United States Supreme Court has held the taxation of the Bank's stock illegal and void because federal obligations were considered in computing the tax. See American Bank and Trust Company v. Dallas County,

463 U.S. 855, 103 S.Ct. 3369, 77 L.Ed.2d 1072 (1983).

(Emphasis in original.)

I. The Bank's protest of ownership

In the first point of error in its original brief, the Bank contended the trial court erred in granting the summary judgment because the statute imposed the tax on shareholders, not the bank. In the fourth point of error, the Bank challenged the protest procedures. We will consider the two points together.

The Bank claims the tax should have been assessed against the shareholders and, if due, they should have paid it.

A. The propriety of the notice

The Bank admits that it did not follow the protest provisions set out in chapters 41 and 42 of the Tax Code. The only protest the Bank filed was under TEX. TAX CODE ANN. Sec. 31.11 (Vernon 1982). The issue before us is whether the Bank can protest the assessment of the tax and request a refund under section 31.11.

1. Protests under section 41.41

A property owner may protest the determination of ownership of the taxed property. TEX. TAX CODE ANN. Sec. 41.41(7) (Vernon Supp. 1991). A property owner who contests ownership must file a written notice of the protest with the appraisal review board before June 1 or not later than the 30th day after the date the notice of taxes is delivered to the property owner. TEX. TAX CODE ANN. Sec. 41.44(a)(1) (Vernon Supp. 1991).

The Tax Code guarantees the protesting taxpayer a hearing and a right to appeal a ruling of the appraisal review board. See TEX. TAX CODE ANN. Sec. 41.45 (Vernon 1982), Sec. 42.01 (Vernon 1982). The Tax Code further states that its remedies are exclusive. TEX. TAX CODE ANN. Sec. 42.09 (Vernon Supp. 1991). The Tax Code prohibits a party from filing suit for a tax refund, unless the party first protests the tax under the provisions of the Tax Code. TEX. TAX CODE ANN. Sec. 42.09(a)(2) (Vernon Supp. 1991).

2. Protests under section 31.11

A refund for overpayments or erroneous or excessive payment of taxes is authorized if: (1) the taxpayer applies to the tax collector for a refund of an overpayment or erroneous payment of taxes; and (2) the auditor for the taxing unit determines that the payment was erroneous or excessive. TEX. TAX CODE ANN. Sec. 31.11(a) (Vernon 1982). If the refund exceeds $500, the governing body of the taxing unit must also determine that the payment was erroneous or excessive and must approve the refund. Id. Unless the taxpayer applies for a refund within three years from the date of payment, the taxpayer waives the right to the refund. TEX. TAX CODE ANN. Sec. 31.11(b) (Vernon 1982).

The Bank had a right to protest the ownership of the stock by filing a notice under section 41.41 with the appraisal review board. When the Bank filed a protest under section 31.11 with the tax assessor-collector, it did not preserve its right to contest the ownership of the stock. As a matter of law, the Bank's notice, filed with the tax assessor-collector, did not preserve its right to challenge the ownership of the stock. B. The sufficiency of the notice

The only reason the Bank gave for its protest in its letter of December 8, 1983, was that the tax was unconstitutional. Under its first point of error, however, the Bank argues that it did not own the stock.

The Tax Code states:

A notice of protest is sufficient if it identifies the protesting property owner and the property that is the subject of the protest and indicates apparent dissatisfaction with some determination of the appraisal office.

TEX. TAX CODE ANN. Sec. 41.44(d) (Vernon Supp. 1991).

The Bank's denial of ownership is entirely unrelated to the constitutionality of the tax. The Bank did not exhaust its administrative remedies, which, under the Tax Code, precludes it from seeking judicial relief. Dallas County Appraisal Dist. v. Lal, 701 S.W.2d 44, 46 (Tex.App. — Dallas 1985, writ ref'd n.r.e.). As a matter of law, the notice the Bank filed with the tax assessor-collector, contesting the tax because federal obligations were considered in computing the tax, did not preserve its right to challenge the ownership of the stock.

C. The timeliness of the notice

The Bank filed its protest to the constitutionality of the tax, which it now contends preserved its objection to ownership, almost a year after the final payment for the 1982 taxes. In its amended petition, the Bank stated it paid taxes on the following dates:

1979 12/12/79 $ 6,928.38 1980 12/31/80 11,598.58 1981 12/31/81 13,003.22 1982 12/17/82 15,706.62

The Bank gave notice of protest on December 8, 1983, almost a year after it paid the 1982 taxes.

The Bank's contention, that it was improperly taxed for property of the shareholders, should have been raised in a protest of ownership timely filed under section 41.41 of the Tax Code. Under section 41.44, the Bank was required to file a notice protesting ownership no later than the 30th day after the date the notice of taxes was delivered to it. The Bank's notice was filed too late. As a matter of law, the untimely notice the Bank filed with the tax assessor-collector did not preserve its right to challenge the ownership of the stock.

We overrule the Bank's first and fourth points of error in its original brief.

II. The unconstitutionality of the statute

In the second point of error in its original brief, the Bank charged that the trial court erred by not finding the Texas bank stock tax, TEX. TAX CODE ANN. art. 11.02 (Vernon 1982) unconstitutional. This is the only issue the Bank raised in its letter protesting the tax assessments to the tax assessor-collector.

In its original brief, the Bank argued the tax was void because it violated a federal statute, and that it was void when applied to the Bank because the Bank owned United States government obligations. The Bank claimed the County's refusal to refund the taxes unjustly enriched Harris County. In response, the County argued that it was not necessary to reach the issue because of the voluntary payment rule.

We did not reach the issue of the constitutionality in our original opinion. Instead, we relied on the voluntary payment rule. The Bank did not challenge our refusal to reach the constitutional issue by point of error in its motion for rehearing.

III. The affirmative defenses

In the third point of error in its original brief, the Bank argued that the tax payments were not voluntary because they were the result of fraud, duress, or mutual mistake of fact. In our original opinion, we overruled the Bank's third point of error. In its second point of error in the motion for rehearing, the Bank challenged our holding that the payment was voluntary. We withdrew our original opinion, sustained the Bank's point of error, and remanded the case for trial. In its motion for second rehearing, the County asks us to again review the issue of voluntary payment. We will do so.

The County complains that we treat the Bank's allegations of fraud, duress, and mutual mistake as part of its cause of action. The County is correct. Because we considered them part of the Bank's cause of action, we held the County was required to disprove them as a matter of law. The County argues that instead of being part of the Bank's cause of action, they are affirmative defenses to the voluntary payment rule. If the allegations of fraud, duress, and mutual mistake are affirmative defenses, it was the Bank's burden to raise a fact issue on them, not the County's burden to disprove them as a matter of law.

The dissent maintains that the Bank's allegations of fraud, duress, and mutual mistake were part of the Bank's cause of action. The dissent contends the allegations were not pled merely as affirmative defenses.

Fraud, as well as other allegations, can be pled as an affirmative defense or pled as a cause of action. Adams v. Tri-Continental Leasing Corp., 713 S.W.2d 152, 153 (Tex.App. — Dallas 1986, no writ). To determine if a claim of fraud is an affirmative defense or a separate cause of action, we look to the pleadings to see if the party requested affirmative relief for fraud. If the fraud allegation does not request damages, the fraud claim is an affirmative defense; if the fraud allegations request damages, fraud is a counterclaim. Id.

The Bank's suit was for the refund of taxes it paid to Harris County. In its prayer, the Bank asked only for a refund of all sums paid. The Bank did not ask for any damages for fraud, duress, or mutual mistake. Thus, the Bank plead fraud, duress, and mutual mistake as affirmative defenses to voluntary payment, not as the dissent maintains, as claims for affirmative relief. If the party opposing a summary judgment relies on an affirmative defense, he must raise a fact issue on each element of the defense to avoid a summary judgment. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Nicholson v. Memorial Hosp. Sys., 722 S.W.2d 746, 749 (Tex.App. — Houston [14th Dist.] 1986, writ ref'd n.r.e.). The Bank's allegations of an affirmative defense in its pleadings did not raise fact issues about its defenses. The County was not required to disprove the Bank's affirmative defenses as a matter of law, unless the Bank raised a fact issue on them.

IV. The voluntariness of the payment

The Fourteenth Court of Appeals recently stated that the voluntary payment rule:

which has long been the law in Texas, stands for the proposition that taxes voluntarily paid may not be recovered by the taxpayer, even though the tax is illegal. The only exceptions to the rule against the recovery of voluntary payments of an illegal tax are (1) fraud; (2) express or implied duress; and (3) mutual mistake of fact.

Salvaggio v. Houston Indep. School Dist., 709 S.W.2d 306, 308 (Tex.App. — Houston [14th Dist.] 1986, writ dism'd) (citations omitted).

In order to rely on an affirmative defense, the Bank, as nonmovant to the summary judgment, was required to plead the defense and raise a fact issue about it. In City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979), the supreme court stated:

The non-movant must expressly present to the trial court any reason seeking to avoid movant's entitlement, such as those set out in Rules 93 and 94, and he must present summary judgment proof when necessary to establish a fact issue.

(Emphasis added.)

Rule 94 requires the parties to specifically plead matters that are affirmative defenses to matters pled in a pleading filed by an opponent. Rule 94 lists duress and fraud as defenses that must be pled. By case law, mutual mistake has been identified as an affirmative defense that must also be pled. Durham v. Uvalde Rock Asphalt Co., 599 S.W.2d 866, 869 (Tex.App. — San Antonio 1980, no writ).

To use an affirmative defense to avoid a summary judgment, the Bank was required to produce sufficient summary judgment evidence to raise a fact issue on each element of one of its defenses. Brownlee, 665 S.W.2d at 112; Kirby Exploration Co. v. Mitchell Energy Co., 701 S.W.2d 922, 926 (Tex.App. — Houston [1st Dist.] 1986, writ ref'd n.r.e.).

We must review the record to see if the Bank's pleadings and its summary judgment evidence raised fact issues to support the affirmative defenses of fraud, express or implied duress, or mutual mistake of fact.

In its second amended petition, the Bank challenged the taxes as illegal, unconstitutional, and the result of fraud, duress, and mutual mistake of fact. In its response to the summary judgment, the Bank raised the issues of voluntariness, unconstitutionality, fraud, duress, and mutual mistake.

The only summary judgment evidence on these issues was in an affidavit of an executive vice-president of the Bank attached to the Bank's response to the motion for summary judgment. The vice-president said the Bank relied on the tax bills as express or implied representations that the tax the County demanded were valid, legal taxes, that the County was entitled to them, and that they were assessed in accordance with all applicable federal and state laws. The vice-president also said that tax statements were false, and the Bank was mistaken as to the accuracy of the valuation formulas used by the County. The Bank could not permit a tax lien to be placed on the property because it would jeopardize the Bank's standing.

The Bank could not allow a tax lien to be placed against the Bank premises because it would seriously jeopardize the Bank's standing with the governmental authorities which regulate the Bank. Damaging ramifications include the loss of the Bank's right to conduct business, impaired or destroyed ability to obtain insurance and bonds, not to mention the damage to the Bank's reputation. . . .

The Bank attached a typical tax bill to the affidavit. Nothing on the tax bill shows any express or implied representation.

1. Fraud. Although the Bank raised the affirmative defense of fraud in its pleadings and in its response to the summary judgment, the affidavit did not produce evidence on each element of fraud. The Bank, therefore, did not raise a fact issue about its affirmative defense of fraud.

2. Mutual mistake of fact.Although the Bank raised the affirmative defense of mutual mistake in both its pleadings and in its response to the summary judgment, and the affidavit states that the Bank paid the tax bills by mistake, the Bank did not raise a fact issue that the County made a mistake when it issued the invoice for the tax. At best, the Bank raised the issue of unilateral mistake. The Bank, therefore, did not raise a fact issue about its affirmative defense of mutual mistake of fact.

3. Express or implied duress.The Bank raised the affirmative defense of duress in its pleadings and in its response to the summary judgment, and in the affidavit the vice-president stated that the Bank felt compelled to pay the tax bills for business reasons.

First, the County correctly points out that the Bank produced no evidence to raise a fact issue of express duress. If the Bank has any duress defense, it must be implied duress. The Bank's argument seems to be that if a party pays a tax required by law, and years later the law is declared unconstitutional, the payment was, as a matter of law, implied duress.

The cases the Bank cites, which permitted a tax refund, all involved statutes that have onerous summary penalties and burdens

in the statute. For example, in State v. Akin Products Co., 279 S.W.2d 409 (Tex.App. — San Antonio 1955), aff'd, 155 Tex. 348, 350, 286 S.W.2d 110, 111 (1956), the Texas Supreme Court stated:

The controlling issue in this case is whether plaintiffs paid the tax by reason of an Act which was so burdensome and onerous as to justify the trial court's belief that the plaintiffs paid the taxes under duress.

That case dealt with a statute that the court declared unconstitutional in its entirety. The penalties in the Act were so severe that the taxpayer could have been enjoined from doing business. The Act:

(1) Imposed a penalty at the rate of $50 each day for the violation;

(2) declared that the taxes were the personal obligation of the taxpayer, and imposed interest at the rate of 10% on all unpaid taxes;

(3) declared the failure to post the bond or pay the tax as illegal; and

(4) expressly directed the courts, on request of the Commission, to restrain or abate any violations and to grant injunctive relief which could be mandatory.

Id. The court specifically noted that one taxpayer was actually enjoined from doing business. Id. The court found the taxes were paid under duress. Akin, 286 S.W.2d at 112.

In State v. Connecticut General Life Ins. Co., 382 S.W.2d 745, 748 (Tex. 1964), the Texas Supreme Court again found the taxpayer demonstrated duress. In that case, the taxpayer was forced to pay the taxes to avoid the loss of the right to do business in Texas. Id.

In Crow v. City of Corpus Christi, 146 Tex. 558, 562, 209 S.W.2d 922, 925 (1948), the Texas Supreme Court found the taxpayer was entitled to a refund under an invalid statute. The taxpayers, in that case, and those cited in the opinion, were subject to various penalties for nonpayment including forfeiture. 209 S.W.2d at 923-24. In such a case, the failure to protest did not make the payment voluntary.

Chapter 33 contains the penalty provisions of the Tex.Code. A delinquent taxpayer is subject to penalties, penalties for collection costs, seizure of personal property, foreclosure of the tax lien, and court costs and expenses.

The potential penalties under the Tax Code do not include a loss of the right to do business in the State. See Texas Nat'l Bank of Baytown v. Harris County, 765 S.W.2d 823, 825 (Tex.App. — Houston [14th Dist.] 1988, writ denied). Here, the Bank presented evidence that a tax lien would "jeopardize the Bank's standing with the governmental authorities which regulate the Bank." We note, however, that the Bank could avoid the penalties by protesting the tax under the Tax Code. The Tax Code requires that a protesting taxpayer pay the greater of the undisputed amount of taxes owed or the tax paid in the previous year. TEX. TAX CODE ANN. Sec. 42.08(b) (Vernon Supp. 1991).

We overrule the Bank's first and fourth points of error in its original brief and sustain the County's first and second points of error on its motion for second rehearing.

OPINION ON MOTION FOR REHEARING