(dissenting).
I respectfully dissent.
The judgments of the trial court and the Court of Civil Appeals awarding Connecticut General a recovery are affirmed by this Court solely on the theory that its payment of more taxes than it owed was under duress. I suggest that on the record before ns the Court has reached a legal conclusion for which there is neither substance nor shadow of support in the facts.
It is not held that overpayment was made under actual duress; rather, it is held that overpayment was made under “implied duress.” “Implied duress” is a legal fiction, invented by the courts to give relief to those who in their own immediate self-interest yield to illegal or unwarranted demands rather than risk loss or harm by reason of failure to do so. So far as I can determine from the cases cited by the Court and from independent research, the legal concept of “implied duress” has never heretofore been used as a cloak for relieving one of the consequences of his own mistakes of fact. Here, the Court uses it as a basis for relieving Connecticut General not only of the consequences of its own mistakes of fact, but as well of the consequences of its own negligence.
The charge that Connecticut General’s overpayment of taxes resulted frcm its own negligence should not be made without a statement of the evidence which supports it.
The relevant part of the printed form furnished by the Board of Insurance Commissioners to insurance companies for making their annual reports, and the manner in which the form was completed by Connecticut General for the years 1952-1957, is illustrated by the report for the year 1952, which is reproduced.
*750
The printed form provided Connecticut General with an entirely correct and proper basis for making its own simple arithmetical ascertainment of its tax liability. All it needed to do to keep from paying more taxes than it owed was to examine its books and records and with the use of an adding machine arrive at the figures to be placed in the blank spaces left • for its-convenience in items 3 and 4. Inasmuch as the record discloses that Connecticut Gen- . eral is one of the ten largest insurance companies in the United States, it is not a violent assumption that it had in its employ people entirely capable of analyzing its investments and people capable of using adding machines who, working together, could have provided the information for filling the blanks in both items 3 and 4. Once the blank spaces in items 3 and 4 were filled ■ in, a seventh grade student could have ascertained Connecticut General’s tax liability by following the, directions in the printed form.' The form even told how to *751find the ratio of investments in Texas securities to investments in similar securities in the state of highest investment; “item 3 divided by item 4,” it said. It then eliminated the necessity for knowledge of the taxing provisions of Art. 4769, V.T. C.S., by telling precisely what tax rate to apply to the ratio shown in item S. Simple multiplication of the figure shown in item 7 by the tax rate would furnish the basic tax due and owing.
We recognized in Metropolitan Life Ins. Co. v. Mann, 140 Tex. 450, 168 S.W.2d 212, that reporting insurance companies are under a duty to conform their reports to the forms furnished to them by the Board of Insurance Commissioners whose statutory duty it is to prescribe them. Indeed, it was because Metropolitan had complied with an improper form in figuring and paying its taxes, and only for that reason, that we held the overpayment of taxes in that case to have been made under implied duress.
The situation is entirely different in this case. Here, the correctness of the form is not challenged. Yet here, Connecticut General did not conform its report to the form. It will be noted that although it filled in the space in item 3, thus showing the amount it had invested in Texas securities, it did not fill in the space in item 4 showing the amount of its investments in the state of highest percentage of investments. Had it done so and done so correctly, the certificate showing an excessive amount of taxes due, on which the Court now predicates implied duress, would never have issued. Connecticut General offers no reason or excuse for failing to complete the form properly. The failure to complete the form by accurately furnishing the information required by item 4 was either willful or negligent. Since Connecticut General had nothing to gain and all to lose by the failure, it is obvious that the failure was not willful but was negligent.
Although it had failed to give the information required by item 4, Connecticut General did show in the reports the ratio of its investments in Texas securities to its investments in securities of the state of the highest percentage of investment. In each of the reports for the years 1952-1957, the ratio is shown as “Less than 7S%.” Connecticut General does offer an excuse, but hardly a valid reason, for putting this erroneous information in the forms. A Vice-President, who is also counsel for the company, testified that he was acquainted with the sliding scale of rates in Art. 4769, and that at various times during the 1952-1957 period he inquired (the record does not show of whom) why the company was paying the highest rate of tax, and was advised that on the basis of rough calculations the ratio of investments was not even close to 75%. This is proof once again of negligence. That the reports of taxes due, required to be made under oath, were made on a basis of “rough estimates” rather than on a basis of accurate accounting is almost gross negligence.
In preparation for making the report for 1958, the Vice-President-witness had an accurate accounting made for- the purpose of determining the ratio rate base for that year. Because of disclosures made by that accounting, he then had an accurate accounting made for the years 1952-1957, and discovered that for each year the actual ratio rate base was such as to require a tax rate of only 1.925 rather than 3.3.
As the Court points out, the statute requires that the annual tax reports be filed on or before March 1, and that the Board certify to the State Treasurer the amount of taxes due which must be paid by March 15. Some 200 or more insurance companies file the reports; and because of the brief period allowed for checking the reports, nothing more than a check of mathematical accuracy is made of reports which show the maximum tax rate to be due. If the tax is mathematically correct, the Board certifies to the State Treasurer the amount of the tax shown in the report. Thus it was that for each of the years in *752question the Board certified to the State Treasurer that Connecticut General’s tax was the same as shown in its reports. It is because of the issuance of these certificates that the Court holds that Connecticut General overpaid its taxes under implied duress. The conclusion is reached on the basis of certain language taken from Metropolitan Life Ins. Co. v. Mann, supra.
The language quoted from Metropolitan should be considered in its proper setting. Metropolitan was contending that if it had not paid the taxes unlawfully required of it by the erroneous form, its certificate to ■do business could have been withheld and thus that the payment was made under duress. The State was contending that even if Metropolitan had paid less tax than the form required, under a proper construction of the statutes it would have been subject to suit for the difference but its certificate could not have been withheld; that the threat of'suit was not duress. We simply agreed with Metropolitan’s construction of the statutes. In the course of so doing, we held that it is the duty of the Board to issue a correct certificate even if the report is incorrect. We did not hold that overpayments are made under duress when they are made according to a company’s own negligent calculations which are accepted and certified to the State Treasurer by the Board.
Connecticut General paid its taxes by check for each of the years in question. In each instance its check for the sum at which it had calculated its taxes was transmitted to the Board coincident with the filing of the report. At that time rio certificate had been issued; and there surely can be no basis for saying that the tender of payment of an excessive amount was made under duress. Finding the mathematics of the reports to be correct, the Board issued its certificates and accepted and transmitted the checks to the State Treasurer. The overpayments were thus not pursuant to the certificates but were pursuant to Connecticut' General’s own negligence. Any implied duress arising from the certificates could hardly operate retrospectively.
There is yet another reason why Connecticut General cannot predicate duress on the Board’s certificate. It never knew of the certificate. It was stipulated by the parties that Connecticut General never received any communication of any kind from the Board relative to its tax liability during the years in question, and there is no proof that it received a copy of the certificate from any other source.
Implied duress in this area of the law rests on threats. There must be an illegal or unwarranted demand for payment with provision in the law for the application of hurtful business sanctions if one refuses to meet the demand. In this situation the courts have held that one acts under duress even though no actual threat to invoke the sanctions has been made; that inasmuch as the sanctions are available, the demand implies a threat that they will be invoked. Now how can one having no knowledge of a demand act under an implied threat to invoke sanctions if he does not meet the demand ?
All of the cases cited by the Court in which recovery has been allowed are cases in which payment was made in response to a known demand for the amount paid. In Austin Nat. Bank v. Sheppard, 123 Tex. 272, 71 S.W.2d 242, the Secretary of State demanded and received a filing fee of $2,500 which was not authorized by law. In National Biscuit Co. v. State, 134 Tex. 293, 135 S.W.2d 687, the payments recovered were made in accordance with the known demands of unconstitutional statutes. In Metropolitan Life Ins. Co. v. Mann, 140 Tex. 450, 168 S.W.2d 212, payment was pursuant to the known demand of an unauthorized printed form. In State v. Akin Products Co., 155 Tex. 348, 286 S.W.2d 110, payment was in accordance with known demands 'of a State Commission pursuant to an unconstitutional statute.
Other cases of like result may be cited; but they, too, involved payments made .in *753response to known demands. In Crow v. City of Corpus Christi, 146 Tex. 558, 209 S.W.2d 922, payment of the gross receipts taxes or fees was pursuant to the known demands of an invalid city ordinance. In State v. Tennessee Gas Transmission Co., Tex.Civ.App., 289 S.W.2d 309, writ refused, n. r. e., and State v. Transcontinental Gas Pipe Line Corp., Tex.Civ.App., 292 S.W.2d 826, writ refused, payment was according to the known demands of an unconstitutional statute.
That a known demand is basic to a right of recovery of taxes paid under implied duress is the clear implication of Corsicana Cotton Mills v. Sheppard, 123 Tex. 352, 71 S.W.2d 247, in which recovery was denied. In that case, as in this, there was an overpayment of taxes. The overpayment was based on the taxpayer’s misconstruction of franchise tax statutes. In denying recovery, the Court said:
“As we understand this record, the secretary of state never at any time made any demand on relator to pay franchise taxes for the years involved in this claim on its capital set-up employed outside this state. Furthermore, in our opinion this record contains no evidence that can reasonably be interpreted as showing or tending to show, that the secretary of state, the Attorney General, or any other state authority ever made any ruling or demand that would have justified relator in paying the taxes here involved on its capital set-up employed outside the state.” 71 S.W.2d 248.
Replying to a contention that statements in the report forms relating to penalties constituted implied duress, the Court said:
“We have carefully read the above information contained in blank forms as above indicated, and we find nothing therein that can be construed as a contention that the taxes here involved were claimed or demanded by the state or any state authority.” 71 S.W.2d 250.
In the instant case the only demand known by Connecticut General was the demand of Art. 4769 for a sliding scale percentage of its gross Texas premiums for the preceding year, the percentage to be based on the ratio of its investments in Texas securities to its investments in securities of the state of its highest percentage of investment. Its overpayment of taxes was because of its own negligence in failing accurately to comply with the demand. Its situation here is as though no certificate of the Board had been issued. It is the same as if one had incorrectly calculated and overpaid a gross receipts tax imposed by an unconstitutional statute or an invalid city ordinance; he would have paid the tax demanded or required by the statute or ordinance under implied duress, but the excess would not have been paid under implied duress.
I respectfully suggest that the holding of duress in this case extends that concept beyond reality; that it makes the concept of acts done under duress and the concept of acts done by mistake or by reason of negligence legal equivalents.
Connecticut General advances two other theories for allowing recovery: (1) that the overpayment of taxes was made as a result of a unilateral mistake in the nature of a clerical error, and (2) that it was made as a result of a mutual mistake of the parties. Recovery is not allowed by the Court on either theory. Assuming the theories to furnish sound and accepted legal bases for recovery in this jurisdiction, an assumption for which there is no support in decided cases, there is simply no evidence to support them.
The evidence attending Connecticut General’s overpayment has been summarized. Testimony that someone in the organization told the Vice-President-witness that on the basis of rough calculations the ratio of investments had not reached 75% is not evidence of a unilateral mistake “in the nature of a clerical error,” such as was held in Taylor & Son Inc. v. Arlington *754Independent School District, 160 Tex. 617, 335 S.W.2d 371, to relieve a bidder of the legal consequences of an erroneous bid. Moreover, the evidence is pure hearsay and does not prove the truth of what it purports. Aetna Ins. Co. v. Klein, 160 Tex. 61, 325 S.W.2d 376. Evidence that the Board certified erroneously the amount of taxes due does not establish that the overpayment was the result of a mutual mistake. From the standpoint of Connecticut General, the erroneous report was, on the record before us, the result of negligence. From the standpoint of the Board, the erroneous certificate was the result of failing to obtain and check all records necessary to the making of a correct certificate.
It is too obvious to warrant discussion that it is unjust for the State to keep the overpayments of taxes made by Connecticut General. It was also unjust for the State to keep the overpayments of the taxpayer in Corsicana Cotton Mills v. Sheppard, supra. Perhaps the time has come to re-evaluate the relationship between the taxpayer and his government, and to require that government disgorge monies received by it to which it is not justly entitled and which it should not in good conscience retain. Government is no more entitled to be unjustly enriched at the expense of its citizens than is one citizen at the expense of another. Although finding implied duress in Crow v. City of Corpus Christi, 146 Tex. 558, 209 S.W.2d 922, this Court’s primary concern was with the City’s moral conduct as is evidenced by this language (209 S.W.2d 925) :
“The city received from the companies money to which it now appears it was not entitled and, under the circumstances detailed, it would not be just for the city to continue to retain the money. * * * It would be against good conscience for the city not to pay back to petitioners the money thus received.”
I would look with favor on a holding that a taxpayer is entitled to recover taxes paid in excess of the amount he justly owes under a proper construction of taxing statutes, once the overpayment is established by a judgment of a court of competent jurisdiction. A holding of that character would permit recovery of excess ad valor-em taxes voluntarily but negligently paid by a widow in response to a statement of a tax collector who has made a mathematical error in his computation of taxes due. But until a rule of law is adopted which with equal certainty authorizes a recovery of the “widow’s mite,” I am unwilling to pile fiction of knowledge of demand upon fiction of threats in order to reimburse Connecticut General’s half a million paid voluntarily but negligently. Rules of law should apply to all alike.
Since affirmance here rests on a holding of implied duress and I can find no basis in the record for the holding, I must dissent.
CULVER, WALKER and HAMILTON, JJ., join in this dissent.