Appeal from the Circuit Court for Baltimore County; Raine, J.
Brune, C. J., and Hammond, Prescott, Horney and Sybert, JJ. Prescott, J., delivered the opinion of the Court.
This suit was instituted in the Circuit Court for Baltimore County, in equity, for the construction of a sales agency contract and for an accounting in damages arising from its alleged wrongful termination. The decree of the chancellor dismissed the bill of complaint of the appellant for reasons stated in an oral opinion delivered from the bench.*fn1
In the spring of 1957, Raymond F. Cushing, who had been in the cemetery business for a number of years, met with John B. Robeson, president of the appellant, to consider the making of a contract, whereby the appellant would handle the sales for a new cemetery to be known as "Gardens of Faith." After negotiations had at several meetings between Cushing and Robeson, a written contract was executed on April 27, 1957. It was understood between the parties that this contract would be assigned to a new corporation to be formed by Cushing, Gardens of Faith, Inc., and this, in due time, was done.
Under the terms of the contract, the appellant was employed as Director of Sales of the cemetery company for a period of three years, commencing on May 27, 1957. The agreement provided that the appellant should receive a 5 per cent commission on "all net sales*fn2 of pre-need cemetery lots [those not needed for immediate interment]," and a like commission on all "at need" sales (those purchased for immediate interment). In addition, the appellant was to receive a commission of 5 per cent on "bronze memorials" sold.
Under paragraph 9 (a) of the agreement, the appellant
was given full and exclusive responsibility for, and control of, the sales program, and Robeson [personally] was only required to "devote as much time as he [deemed] necessary to the maintenance and operation of this program."
The case turns upon the provisions of paragraph 9 (b), so they will be set forth in full:
"Robeson guarantees a minimum of $700,000.00 gross sales over and above cancellations for the year beginning June 1, 1957, and the same amount for each subsequent year under this agreement. However, if Robeson exceeds his guaranteed quota the first two years of the term by $200,000 or more, his guarantee for the third year will be reduced to $500,000. Forty per cent (40%) of the annual guaranteed quota must be attained by December 1, 1957, and seventy-five per cent (75%) by March 1, 1958. On each of these dates, and quarterly thereafter, through the second year of the term, and semiannually during the third year, the quota attained by Robeson will be reviewable by the Cemetery, with the right in the Cemetery to terminate this contract at its option if Robeson has substantially failed to attain guaranteed quota."
The appellant duly entered upon the performance of its duties under the contract, and it is agreed that in the first year it fully measured up to its contractual obligations. Gross sales, after cancellations, including service charges and receipts from bronze memorials were $758,579 for that year.
During the first year, the salesmen of the appellant had been working through a list of union members as prospective customers, but, by June 1, 1958, this list was nearly exhausted. In addition, many of the remaining prospects were out of employment due to a recession. Gross sales, including service charges and bronze memorials for the first quarter of the second year, amounted to only $102,081 and in the second quarter thereof to $153,882. Cushing testified that he reviewed these figures on the basis of a quarterly quota of $175,000 for the second year, and, although he talked to Robeson
about them, he took no action concerning a termination of the contract.
These declining sales called for "quite a transition" in the sales organization and the methods of obtaining leads. The appellant instituted an intensive program of direct door-to-door surveying; and Robeson, personally, went out in the field with the sales manager, divisional ...