Green Manors…and Everywhere Else
You're either in the madhouse, or you're not in the madhouse.
The first part of Spellbound is set in Green Manors. It's a restricted place, and Ballantyne/Edwardes wants to get out of it:
BALLANTYNE: Come on, let's go. We'll look at some sane trees, normal grass, and clouds without complexes.
The madhouse is cramped and wrong; you want to get away.
Supposedly Ballantyne leaves Green Manors because he's on the run from the police. Constance follows him to help him and cure him.
But really, it feels as if they run away because the small-scale psychological plot is just too boring and they want to have an exciting adventure, filled with love and danger. From New York City to upstate New York and then off to the ski slopes they go. Whoosh and whee and whoop—it's a glamorous Hollywood romp.
You can imagine another Spellbound, set entirely in Green Manors—a claustrophobic psychological thriller filled with tight corners and small spaces. But the actual Spellbound doesn't want small. It wants to go rushing out into the world, opening all those doors as in Constance's daydream (see our "Symbols and Tropes" section for more).
The film wants to get its hero and heroine out of the madhouse and into the great, big world, where they can worry less about madness and more about love and adventure. In that sense, the setting isn't really the madhouse, and it isn't really everywhere else either. Instead, it's Hollywood, where stars romp across the world for your amusement.