As Otto rides along looking for the lost sheep, he comes across the shepherd’s wife and baby. They have been kicked out of their home. Otto is angry at the lack of charity toward this woman, and he brings her food and gives her his coat. He does not realize that she intends to go back to her hut after dark.

Em and Lyndall are waiting for Otto to return. Em is crying, for they know what is about to happen. Tant’ Sannie greets Otto with insults and accusations as well as a command to leave the farm before morning. Otto has no idea what she is talking about. Bonaparte has made an accusation against Otto, an accusation that is not fully spoken but seems to have something to do with the lost sheep. Bonaparte scolds Otto for ingratitude. Otto tries to defend himself and turns to a servant for help, but she only insults him. Otto turns and goes back to his cabin.

Tant’ Sannie strikes Em in anger, and Lyndall tries to defend her cousin before taking Em into the house. Tant’ Sannie locks the girls in their room so that they cannot visit Otto. Lyndall tries everything she can think of to get out, including starting a fire, but nothing works. The girls go to sleep, vowing to see Otto in the morning.

The bewildered Otto makes his preparations to leave, including writing a note to the girls. He will go and meet Waldo, he says, and he tells them that he loves them. Then he gathers a few things into a bundle and actually takes some pleasure in his preparations and in leaving the cabin neat. He has a pain in his chest, but he decides that he will read a story for a while before he sleeps. In the night, Otto is visited by Death, who treats him as an old friend, and Otto dies “with the purity and innocence” of his childhood still upon him.