In an Edinburgh, Scotland courthouse, in the year 1860, an appeals court trial is underway to determine the fate of a collie named Lassie. As John Traill, the dog's master, pleads his case before the judge, he recalls the time, one year earlier, when he first met Lassie: One day, during an Edinburgh street market fair, John's friend, Jock Gray, discovers the young stray Lassie and, recognizing in her the characteristics of a champion collie, decides to keep the dog until she is claimed by her owner. As Lassie grows to maturity, Jock trains her to help him with his sheep-herding chores. Although Lassie learns fast and proves to be an invaluable friend to Jock, Jock is troubled by the thought that her owner may be looking for her, so he decides to leave Lassie with his boss, MacFarland. Lassie is unhappy in her new home and follows Jock to John's inn, where she scratches at the door until she is let in. John then persuades Jock to take Lassie with him on his journey to the northern part of the country, but tragedy strikes when Jock and Lassie are attacked in an alley by two thieves. Lassie keeps the attackers away, but Jock is injured badly and dies the next day. Instinctively, the orphaned Lassie keeps a watch over Jock's grave in Greyfriars churchyard, and when the caretaker ejects her, she finds her way back to John's inn. Unable to continue caring for the dog, John returns Lassie to MacFarland, but she escapes from his barn once again. Lassie's journey back to the graveyard is a long and treacherous one, but she eventually arrives there safely. At the graveyard, Lassie finds herself in trouble with the law as the new, strict police sergeant, Sergeant Davie, threatens to enact a law requiring the destruction of stray dogs not claimed by their legal owners. John goes to court, willing to pay Lassie's license fine to spare her life, but the judge refuses to accept the payment because John cannot prove that he is Lassie's rightful owner. John loses his case, but while preparations are made for an appeal, Lassie escapes from Davie's guard and takes refuge in the soldiers' quarters of a nearby army fortress. The dog is adopted by the soldiers and later makes a daring escape from the walled fortress and returns to the graveyard. John concludes his testimony about how he came to know Lassie, and as the apparently unswayed appeals judge is about to deliver his verdict, the courtroom is stormed by children bearing a sum of money collected to pay for Lassie's license. Things still look bad for Lassie, though, and when a bugle is sounded in the distance, she runs out of the courtroom, which is seen as an indication that she is a wild dog. To prove that she not wild, John leads the judge to Jock's gravesite, where he knows Lassie has gone. Persuaded that Lassie merely responded instinctively to a sound she associated with her owner, the judge agrees to spare Lassie's life by making her a free citizen of Edinburgh, a status exempting her from licensing laws. Furthermore, the judge takes pleasure in assigning Sergeant Davie the task of personally answering questions by passersby relating to Lassie's fame.