The respondent got a licence for the importation of sardines. He entered into an agreement with the appellant for the financing of the importation but under the name and style of the respondent. In consideration for this, profit was to be shared equally. Save for 5% which was to be deducted first by the appellant for out of pocket expenses.

The appellants sold the sardines secretly, having kept the respondent carefully out of the business and eventually sought to repudiate the contract while offering the sum of N4,000.00 as a gift, out of a total profit of N224,000.00 allegedly realized from the sale.

The respondent sued for the recovery of the sum due to him from the contract and for damages for breach.

The appellant also filed with his statement of defence, a motion, pursuant to order 22, r.4 of the High Court of Lagos State, (Civil procedure) Rules, praying for an order that the statement of claim filed by the respondent be struck out for disclosing no reasonable cause of action, and for being frivolous and vexatious.

The trial judge dismissed the motion, holding that statement of claim disclosed a reasonable cause of action.

Appellant appealed to the court of Appeal, which also dismissed his appeal.