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As convict Hart is on his way to be executed, he entrusts fellow inmate Larry Poole with a note to be given to the Smith family in New Jersey. Out of prison, as Larry sings with young Patsy Smith in an apartment courtyard for pennies, he meets county welfare worker Susan Sprague, who wants to place Patsy in an orphanage. After Patsy introduces Larry to her grandfather, Gramp Smith, he and Larry eat lunch by the river and Larry gives him Hart's note. As retribution for killing Patsy's father, Hart has enclosed a key to his hideout, which is now reputed to be a haunted house. When Mr. Carmicheal of the Union County Welfare Board orders Susan to put Patsy in an orphanage because Gramp has no money to support her, Larry comes up with a plan: the Haunted House Cafe. On opening night, however, the sheriff arrests the cafe's orchestra leader Henry, and his band for stealing the chickens that provided food for the customers. To pay the tavern license, Larry takes a job at the fairground as a daredevil, but his plane crashes and he is hospitalized. Gramp brings word that Patsy has been put in the orphanage and he is forbidden to see her. When Susan learns this, she quits the Welfare Board and becomes Patsy's friend. Then, Larry puts on a show at the orphanage so that he may rescue Patsy from the home, but after Patsy tells him of Susan's change of heart, she is caught. Larry searches for Susan all over New York City, but when he finds her, he is arrested. Patsy, on a hunger strike, has persuaded the orphanage that she is too much trouble, and Susan and Larry, now married, adopt her.