Mercantile owner Mr. Caribeau believes that his favorite goat, Penelope, who is tied up outside his store, has been stolen. In reality, Penelope escaped on her own doing. Penelope ends up in the possession of Stan and Ollie, who learn that she is believed to have been stolen but who Penelope won't leave alone regardless. So Stan and Ollie decide to take Penelope home to their room at the hotel apartment. Keeping her in their room may be a problem as they sneak her in in the middle of the night and as their room is right above the bedroom of their strict landlord. She being in their room leads to one misadventure after another for Stan, Ollie, the landlord and another tenant. But the fact of the police still believing Penelope to be stolen may put an end to Penelope's association with Stan, Ollie and the rest of the people in the building... that is unless Penelope has other ideas.
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