Marty sees James Howarth being murdered but when Jeff summons the police at Marty's behest Howarth is apparently alive and well. Marty finds out that 'Howarth' and his wife are impostors who have murdered the real James and Karen Howarth and hidden the corpses in the basement. However, when the police come to investigate, the murderers, who are spies out to get a list of all known British agents - have disposed of them and Jeff is discredited. He begins to doubt Marty's sanity and sends him to a ghost expert, Dr. Plevitt, who can actually see him. The doctor is impressed when Marty passes his 'ghost test' with flying colours and rings the police, who finally arrest the killers as they are about to get rid of Jeff.

Jeff is acting as a bodyguard to a beauty queen, Anne Soames, who wants to visit the Public Records Office. An intrigued Marty watches as she uses a special pair of glasses to cut the alarm and later a file is stolen by a man named Pargiter. When Jeff pursues him, Pargiter explains that the stolen document reveals him to be the rightful king of England - with his two heavies as noble lords. He condemns Jeff as a heretic, tying him up along with Anne, who has outlived her usefulness, and leaving them to die in a burning building. However, Marty sets off the fire alarm, the pair are rescued and Pargiter and his heavies are arrested.