- Everybody ends up at the jail, including Mr. Kirby, who is very upset about the whole thing.
- Grandpa's cheery though; he plays the harmonica and leads a song for everyone.
- In the woman's jail, Mrs. Kirby is also super-unpleasant.
- Grandpa tells Mr. Kirby to take it easy, and relates how he gave up working because he didn't like it. Mr. Kirby isn't impressed—and to be fair, Grandpa's constant cheerfulness is a little wearing.
- Mr. Blakely shows up and explains he arranged the arrest to get Grandpa to sell the house. All on Mr. Kirby's behalf of course.
- Mr. Kirby hoisted himself by his own stuffed shirt. That makes him even crankier.
- Grandpa gets fed up and tells Kirby he's a big old jerk and a "dull-witted fool" for caring only about money rather than about friends.
- Grandpa then feels bad for being a meany. He slips his harmonica into Kirby's pocket.
- And then they're all taken out to go to night court.
- Cut to outside the courtroom. Kirby's attorneys arrive, and the newspaper people realize Kirby's been arrested. There is much sputtering and stuttering and excitement.
- We go into the courtroom, where there are a ton of people. (Capra likes crowds. They're very democratic.)
- The crowd is all there to see the Sycamores, who are much loved. Awww.
- Kirby pleads not guilty. Grandpa admits to disturbing the peace and making fireworks without a license.
- The court fines him a bit, which seems fair since he almost blew up the street.
- Mr. Kirby offers to pay it, but instead the neighbors all chip in and pay it. Everyone loves Grandpa. Even the judge throws in a little.
- The judge says he can't dismiss disturbing of peace against Kirby unless he explains what he was doing at the house.
- The Kirbys don't want to admit that Tony was courting Alice. Grandpa tries to give them an out by saying that Kirby was trying to buy his house.
- But Alice is so angry she tells the truth, and she tells Tony that he's a jerk.
- You may wonder what Tony's been doing in all this. He's just been standing off to the side, mostly.
- Anyway, after Alice tells Tony off, the newspapermen burst in.
- Tony is horrified, because Alice dumped him.
- Mrs. Kirby faints.
- General chaos ensues.
- Alice runs away.