The house seems lost to the hospital when Captain Tweedy arrests the sisters for Phillips' murder, but Nancy remains determined to find the real murderer. That night, someone sneaks in and steals Ted's clothes, and when Nancy and Ted develop the negative the next day, they see a blurred figure moving toward the wall. Convinced that the robber entered through the basement, Nancy chides Ted into spending the night in the darkened cellar and sets up a camera to provide evidence of any intruders. The sisters threaten to leave once again when a robbery occurs in their locked house, but Nancy persuades them to stay. To allay their fears, Nancy fabricates a suicide note but recognizes Phillips as the gangster in search of the affidavits, leading her to suspect foul play. Soon afterward, the Turnbull chauffeur, Phillips, is found dead, and the terrified sisters threaten to move out of their house. Two weeks before the twenty-year term has elapsed, a gangster appears at the Drew house and demands the affidavits proving the sister's residency, but he is thwarted by Nancy's boyfriend, Ted Nickerson. Under the provisions of their father's will, the sisters must live in the mansion for twenty years or the property will go to the city. Mayhem erupts when teenager Nancy Drew convinces the elderly Turnbull sisters to give their estate to a children's hospital.

Full cast of nancy drew