Beauty has lived at Birtwick for three years, but things are about to change. Squire Gordon's wife is ill, and the doctor visits frequently; at last the horses hear that their mistress has to go live someplace warm for several years.
Everyone's very upset: "The news fell upon the household like the tolling of a death-bell" (21.1). John and Joe seem very sad, and the horses work hard due to all the "coming and going" (21.2).
As the family comes to bid the horses goodbye, the horses learn their fate: Ginger and Beauty have been sold to someone referred to as the "Earl of W__," and Merrylegs has been given to the vicar only on the condition that he should never be sold, with Joe accompanying him.
John has not decided what to do, and when Squire Gordon asks, John tells him he's hoping to get a job training horses and breaking colts. Squire Gordon thinks that John would be perfect for this job.
After a wrenching farewell, Squire Gordon leaves the stable, and the family prepares to depart. It's obvious that Squire Gordon's family is much loved by their servants and the other people in the town—there's not a dry eye in the house as they say their goodbyes. "Poor Joe! He stood close up to our heads to hide his tears" (21.14), Beauty says.
They drop the Gordons at the train station and turn back to Birtwick, "[…] But it was not our home now" (21.16), Beauty thinks.