Jonathan is accompanied by Dr. Einstein, a plastic surgeon. Dr. Einstein has operated on Jonathan so that he looks like Boris Karloff, the horror film star. Teddy invites Einstein to join him in the cellar, where he believes he is digging the Panama Canal.
Einstein quickly returns and confides to Jonathan that there is a hole large enough to bury Mr. Spenalzo (a man Jonathan recently killed) after everyone goes to bed. Once the lights are out and everyone is supposedly asleep, Teddy goes to the window seat to get Mr. Hoskins. At the same time Jonathan and Einstein go to their car to get Mr. Spenalzo. Both plan on burying the bodies in the cellar. Lights blink on and off, bodies are moved from the window seat to the cellar to the car outside, accusations and threats fly back and forth. Due to the commotion at the house, Officer O'Hara stops by to make sure all is well. When he is sure that everything is alright, he shifts topics and asks Mortimer of a play he is writing. Just then, the lieutenant bursts in and recognizes Jonathan as an escapee from a prison for the criminally insane. Jonathan tells the officers about the bodies in the cellar, but they don't believe him and take him off to prison. Einstein gets away, and Teddy is certified insane and taken to the Happy Dale
Sanitarium. Mortimer happily agrees when his aunts insist on going to Happy Dale with their nephew. The aunts then kindly inform Mortimer that he is actually not a member of the Brewster family. He was an illegitimate child and thus can marry Elaine without fear of passing the Brewster insanity on to his children. Mortimer happily departs, but before the women leave their house, they offer a drink to the head of Happy Dale, Mr. Witherspoon. Witherspoon is a lonely older gentleman, and he gladly accepts a glass of the spiked elderberry wine.