Stephen Hurstwood and Saunders, a friend, maneuver a meeting with wealthy Howard Latimer so they can recoup their own betting losses in a poker game. Latimer, interested in Old English homes, learns that Stephen owns Hurstwood Manor. Stephen talks Latimer into spending the night at the Manor to test the theory that the famous ghost appears only to outsiders. The bet is two thousand pounds that Latimer will not stay the entire night. At bedtime, Latimer is given one candle, one match, an automatic pistol, and a copy of the book detailing the ghost's story. This tale goes that two sisters, alone in the Manor, were found the next morning: one headless and the other a raving lunatic. The murder had been attributed to an escaped criminal. In the darkness that night, a ghostly figure approaches Latimer's bed. At first he thinks it is Hurstwood and Saunders, trying to scare him, then he realizes it is the authentic ghost. He fires his pistol at the ghost before he goes into a state of extreme shock. Months later, Stephen and Saunders see Latimer again. They jokingly tell him the pistol contained blanks and that it was they who had staged the whole operation. Latimer, however, attempts to kill the two, who are saved by the arrival of attendants from a mental asylum. It is then we learn that the gentleman from America is in a state of permanent shock: for he believes that his sister Julia has been killed by Stephen and that he, Latimer, must avenger her death.