When Tony, an employee at the financially troubled Standish sanitarium, discovers that Judy Standish, the head of the sanitarium, is in danger of losing the institution to banker Morgan, he decides to seek a large donation from wealthy patient Mrs. Upjohn. Judy and Tony are about to ask Mrs. Upjohn for a contribution, when they overhear her complaining about her care and planning to leave the sanitarium and return to her old physician, Dr. Hugo Z. Hackenbush, in Florida. The quick-thinking Tony prevents Mrs. Upjohn's departure by lying to her and telling her that Hackenbush has just been hired by the sanitarium. When Judy discovers that her sweetheart, singer Gil Stewart, has spent his entire life savings of $1,500 on a horse instead of voice lessons, she spurns him. Soon after his arrival, Dr. Hackenbush, a horse doctor who has fooled Mrs. Upjohn into believing that he is a real doctor, is appointed Chief of Staff of the sanitarium. At a nearby racetrack, Stuffy, a jockey who rides a horse named Hi-Hat for Morgan, is fired when he wins a race that he was supposed to throw. Stuffy is then induced by Tony to ride the horse for Gil, its new owner, but Gil cannot produce enough money to pay for the horse's feed. Tony raises the feed money by duping Hackenbush into buying a tip on a race and then suckering him into buying a stack of books that he claims are necessary to decipher the tip. Back at the sanitarium, Whitmore, the business manager who is working with Morgan to get the institution out of Judy's hands, tries to call the Florida Medical Board to get Hackenbush's references. His efforts are temporarily thwarted, however, by Hackenbush's clever pranks. Following Tony's attempt to admit Stuffy into the sanitarium as a patient, so that he can spy on Whitmore, Tony learns that Hackenbush is really a horse doctor. Later, Tony tries to repair Gil and Judy's broken relationship by having Gil secretly admitted as a patient. The scheme fails, however, when Judy discovers the ruse and throws him out. The situation for the Standish sanitarium looks hopeless until Gil offers to help by singing at a water carnival, which he hopes will land him a contract. Chaos ensues when Tony and Stuffy arrive at the carnival and Stuffy destroys a piano, turns it into a harp, and then gives a concert. He and Tony then take over the carnival orchestra and lead the sheriff on a wild chase. When Tony and Stuffy learn that Whitmore has devised a plan to get Hackenbush fired by arranging to have Mrs. Upjohn discover him in a compromising position with vamp Cokey Flo, they try to warn the horse doctor. Posing first as house detectives and then as paperhangers, Tony and Stuffy try, but fail, to signal Hackenbush to stay away from Flo. Finally, in an act of desperation, Tony and Stuffy paste Flo to the wall to prevent her from causing Hackenbush's dismissal. When Whitmore tries to remove Hackenbush by bringing in Dr. Steinberg to prove that he is a fraud, Hackenbush creates a diversion by informing Mrs. Upjohn that she has "double blood pressure." Worried, Mrs. Upjohn demands an immediate examination, which Hackenbush bungles completely. When the sheriff arrives with a warrant for Hackenbush's arrest, Tony, Stuffy, Gil and Hackenbush escape and hide in Hi-Hat's stable. Judy soon discovers them and tells Gil that she loves him more than the sanitarium and that she wants to be included in his plans. Morgan eventually finds Hackenbush and his friends, and as he is about to have them arrested, Hi-Hat runs for the racetrack and inadvertently enters the next race. Hi-Hat wins the race when Tony and others spur the horse on by showing it a picture of Morgan, who abused the horse in the past. The sanitarium's mortgage is paid with money won from the race, and Gil gets to keep his sweetheart.