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Benson v. Bradford Mut. Fire Ins. Corp.





Appeal from the Circuit Court of De Kalb County; the Hon. Rex F. Meilinger, Judge, presiding. PRESIDING JUSTICE SEIDENFELD DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 23, 1984.

Plaintiff's appeal from a directed verdict in favor of the defendant raises the issue of the quantum of proof required to submit a theft claim to the jury in a suit on an insurance policy providing coverage for "[t]heft or attempt thereat, excluding * * * mysterious disappearance * * *."

Elmer Benson, as a debtor in possession under bankruptcy proceedings (Benson), sued Bradford Mutual Fire Insurance Corporation (Bradford) claiming that 2,400 to 2,500 hogs had been stolen from him sometime between September 1975 and August 1977. This amounted to approximately 60% of his herd. Suit was brought after Bradford had refused to pay the claim, alleging failure to comply with reporting terms under the policy and denying that the loss was from theft.

Benson was a farmer who operated a feed store business in Sandwich, Illinois. In conjunction with his feed store business, he had a feed dealership with Central Soya. Later, the feed store developed into a retail farm clothing store, the Denim Den. In 1975, he began his feeder hog business by entering into an agreement with Central Soya under which he agreed to use Central Soya's complete feed in raising feeder pigs from about 40 pounds up to a market weight of 220 pounds and Central Soya agreed to finance the feed. The process usually took about 16 weeks. Swift and Company agreed to finance the purchase of the feeder pigs, retaining a security interest in them, and agreed to buy the finished pigs for slaughter. Usually Benson purchased feeder pigs weekly from a company in Knoxville, Iowa. After each purchase he sent Swift up a copy of the sales rights and the weight tickets. When the pigs were finished and ready for slaughter, he sold them to Swift at a price $1 under the average hog market price at Joliet and Peoria on the day of sale. Benson conceded that there was a discrepancy of 700 head between his farm ledger and Swift's records.

Benson operated his feeder pig business on his own farm and on seven other nearby farms from March 19, 1977, to March of 1980. His home farm and some of the others were converted cattle farms but several were built for or substantially modified for raising hogs.

Benson introduced bills of sale, purchase agreements with Swift, and weight tickets to show that he purchased 20,023 feeder pigs during the two-year time period and to show that he sold 15,156 of these to Swift. Accounting for the difference, he testified that Swift replevied 1,763 hogs; he sold 60 hogs to third parties; he used two hogs himself; 12 hogs were accidentally electrocuted; and four hogs died in a road accident. He introduced his farm record books which showed that 375 hogs died in 1976 and 195 died in 1977. Deducting all the hogs accounted for, the records indicate that 2,474 hogs were missing.

Benson testified that he generally counted his hogs when they were purchased and again when they died, were sold, or were otherwise disposed of. A neighboring experienced hog farmer testified that he accounted for his hogs in the same way. Other experienced hog farmers, acquainted with Benson's operation, testified that he maintained good, typical, or reasonable conditions on his farm. Benson testified that there was no evidence of the hogs escaping, but that if they had it was unlikely that large numbers of hogs simply wandered off, because if a hog gets loose it usually stays close to the pen near the other pigs and near food. He did not notice any drop in feed consumption.

Neighboring farmers Alabastro and Leppert testified that they had lost pigs to theft in 1976 and 1977. Alabastro testified that he raised up to 250 head at one time and took a head count once a month. He said he found 100 head stolen in the winter of 1976-77. He said that he found no broken locks, jimmied doors, or tracks but that the theft accounted for the drastic feed drop he had noticed in the prior months. Leppert stated that he raised 600 to 700 feeder pigs and reported 37 pigs stolen in the fall of 1977. He said that he noticed tire tracks which caused him to suspect a theft and to count his pigs. There had been no subsequent evidence that the pigs appeared in the surrounding hog markets.

The farms used by Benson were spread out over 75 miles in two counties, although, Benson testified, the major loss was at his own farm. There were caretakers at the other farms whose responsibility was apparently limited to providing the pens and helping with their feeding and medication. Benson introduced testimony of Patricia Smith who had lived on a farm from which Benson reported 40 pigs missing, in a house 200 yards from the pens, which were 40 feet from the road. She testified that on two occasions she had heard trucks going into the farm and had heard pigs squealing late at night, but she did not look, and saw nothing. Bradford introduced testimony that Patricia Smith had stated to an investigator, however, that she knew nothing about an alleged theft of pigs, or anything about trucks on the farm.

Benson testified that no explanation other than theft would account for the loss of his pigs. He said that the pens and fences were secure and that the gates were checked daily and wired shut. He stated that despite the careful security, on several occasions gates that were wired shut at night were found open in the morning and that only a human could unwire the gates.

Bradford introduced testimony tending to show that a higher death rate, not accurately reflected in what it characterized as poor bookkeeping methods, accounted for the loss and that Benson's bookkeeping methods were contrary to good farm management practices. An expert pig farmer stated that if he kept as many pigs as Benson did he would take periodic inventory. Benson recorded his death losses in multiples of five which Bradford's farm records expert testified was unlikely actually to occur. Benson's testimony that he kept accurate death records was contrary to his deposition where he stated that he kept no definite death records, only approximations. Also, it was shown that computer printouts kept by his son for a time showed many more deaths than did the farm records for that period. Other evidence was introduced to show that a theft of the magnitude claimed would be unlikely: the sheriff's office failed to uncover evidence of theft; the other thefts in the area had been much smaller and were quickly discovered from signs of theft; and as David Wiber, a hog buyer for Swift testified, it would have taken 12 semi-tractor trailers or 240 pick-up trucks to haul away 2,400 pigs, each loading process would be noisy and would take at least 20 minutes to an hour.

Bradford introduced evidence of other probable causes for Benson's loss. Benson's hired man testified for the defense that many pigs died from overcrowding or exposure. Both Benson and Hyland, the hired man, agreed that the pigs suffered from bloody scours, and that at least once many dead pigs accumulated. Hyland testified to a pile of hogs 20 feet by 20 feet, waist to shoulder high, while Benson testified to a pile of 20 to 25 pigs, that he buried with a front-end loader.

Bradford's expert swine consultant testified that a typical death rate in an operation like Benson's could vary from 8% to 30%; and that the winter of 1976 to 1977 was especially hard on pigs raised in open lots such as Benson's.

At the close of Benson's evidence, Bradford moved for a directed verdict, asserting that insufficient evidence of theft had been introduced. The court denied defendant's motion for a directed verdict. At the close of all evidence, however, the trial court ruled (1) that there was enough conflicting evidence to go to the jury on the issue of plaintiff's technical compliance with the policy, and (2) ...

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