The Kenwigs, a couple in the ivory business, invite their neighbor Newman Noggs to a gathering to which Newman reluctantly brings a Mr. Crowl. Mrs. Kenwigs’s uncle, a collector named Mr. Lillyvick, draws a lot of attention at the small party. Two mysterious people arrive looking for Noggs.

The two mysterious guests at the Kenwigs’ gathering are Nicholas and Smike. Noggs puts Nicholas and Smike up in his apartment. Nicholas asks Noggs if Ralph heard about what happened at the school in Yorkshire. Tentatively, Noggs shares a letter Ralph received from Fanny Squeers. She accuses Nicholas of beating her father so badly that he may never walk again, of abusing her mother, of kidnapping Smike, and of stealing a garnet ring. She threatens that Nicholas could be hanged for what he has done. Noggs recommends that Nicholas speak to Ralph directly when the latter returns from his three-day business trip; he also advises that Nicholas not meet with his family until speaking to Ralph.

Meanwhile, the party continues, but Mr. Lillyvick is offended that Noggs left without a word and with a glass of punch. Mr. Crowl declares that he overheard Noggs’s conversation with the men who interrupted the party and suggests that the two men may be on the run from prison.