Mr. Leagan returns home from a long absence to find Candy downgraded to a servant, and decides Candy deserves a holiday at Pony's Home. Once there, Candy learns their neighbour, Mr. Cartwright, sold Father Tree to the eccentric Mr. Flannigan from Washington. He wants the tree all to himself, because he believes it would surrender the best business ideas. Candy leads the orphans and farm animals into an insurgency against the workers preparing the cutting and transportation of the tree. Mr. Flannigan and Candy hold a climbing match and, at a stalemate in the treetop, the two negotiate their options. Candy makes valid arguments for the tree to remain at the Pony hilltop, which prompts Mr. Flannigan to decide to buy out Pony's Home and build his own home instead. Candy then gets the idea to make it appear as if the tree is dying by painting all the leaves yellow. The ruse almost works, but for the rain that washes all the paint off. Furious, Mr. Flannigan orders his workers into action—were it not for a single orphan high up in the tree crying out to save her "father". Then the old man realizes the tree is like a parent to the orphans and renounces his claim.