Squire Cass is the most important man in Raveloe. The farmers have low standards, so they assign him the title "squire" even though he doesn't really deserve it. (Squires traditionally owned lots of land, had a coat of arms, and were related to peers.) Like a real landlord, he collects rent from tenants.
Brief historical digression: this is all taking place about the time of the Napoleonic Wars (beginning of the 19th century), which is good for people who own land. The wars finally ended when England, and the Russian winter, put an end to Napoleon's rather successful march across Europe.
In Raveloe, what's good for the rich is good for the poor, since the poor get the leftovers of the rich.
During the Christmas season, all the rich travel from house to house at each other's parties. Parties at Squire Cass's are the best, because his wife is dead—which means that there's no limit to the food.
Sadly, the villagers think, his sons are a little wild. Dustan (Dunsey to his friends) likes to drink and gamble, and the older Godfrey seems to be following his example. If only Godfrey would marry Nancy Lammeter! She's a nice girl, thrifty without being cheap.
Anyway, it's fifteen years after Silas moved to Raveloe, and now the action is starting. Godfrey stands in a dark parlor with his back to the fire and his hands in his pockets.
Dunsey walks in, and Godfrey scowls. (Looks like there's not much brotherly love here.)
Both guys are a little drunk. They start to fight. It seems that Godfrey gave some rent money to Dunsey rather than handing it over to his father. Why doesn't Godfrey just rat his brother out? Because Dunsey might rat him out. Godfrey's married already—and his wife, Molly Farren, is a drunk. (We sense a theme.)
So Dunsey tells Godfrey to get the money himself, nagging at him to borrow or to sell his horse until Godfrey threatens to just come clean to their father.
Godfrey's got a big strong body but a weak mind, and he can't decide what to do. He's afraid to lose Nancy Lammeter, but the only solution he can come up with is enlistment in the army. Dunsey comes up with a potentially less lethal option. He offers to sell the horse for him, and Godfrey agrees.
As miserable as Godfrey is, he'd be more miserable if his secret came out. Nancy would reject him, and (worse!) his father would disinherit him.