Ernie's adoption into the all-male Douglas household is threatened by a regulation that there must be a lady of the house. Steve again makes a request to adopt the child, but Misses Coulter and Miller of the adoption agency, say they are powerless to change the regulations. Miss Miller has a brilliant idea, however, and soon the family is appearing before a judge who decides that housekeeper Uncle Charley can legally be designated the 'lady of the house'. Charley approves if this fact is kept secret and Ernie is enthusiastically welcomed into the family.

An escaped circus lion makes a midnight call at the Douglas house, and Ernie sees it and awakens the understandably skeptical Steve who accompanies his new stepson to investigate. Steve eventually sees the lion and nervously plays a game of tag with it, warning the family to keep their bedroom doors closed.