Chapter 1: Sir Haldred Taverel, recently ascended to affluence and the proprietorship of the ancient Taverel Manor on the northern coast, awakens from a nightmarish vision featuring a grotesque, yellow-faced figure. Struggling with a sense of deep unease compounded by the eerie ambiance of the manor and its sole servant, the mysterious and slightly familiar Lo Kung, Sir Haldred reflects on his abrupt inheritance of the manor following a relative's death. The manor, reputed to be haunted, only intensifies his discomfort, particularly with Lo Kung’s odd behaviors and unsettling presence.

During a restless night, Sir Haldred thinks he sees a figure with a yellow face, differing from Lo Kung, and decides to investigate the manor. While exploring the dark corridors, he discovers the body of Lo Kung, gruesomely murdered. Sir Haldred is then confronted by an unseen, possibly non-human presence in the manor, leading to a nerve-wracking chase that culminates in his encounter with a horrific idol in a secluded part of the manor, which causes him to scream in terror, ending the chapter with his fate uncertain.

Chapter 2: The Haunted Manor This chapter introduces new characters discussing the strange happenings at Taverel Manor. A young woman, Marjory Harper, who was engaged to Sir Haldred, seeks help from John Gordon of the British Secret Service due to her desperation over Haldred's mysterious disappearance. With Scotland Yard baffled and having abandoned the case, Gordon, alongside Stephen Costigan, decides to investigate, motivated by his long-standing friendship with the Harper family.

The narrative details the sinister history of the manor, which includes previous owners meeting unexplained and often fatal ends. The current occupant, Mr. Thomas Hammerby, appears under mysterious circumstances with a claim to the manor based on a financial deal with the absent and disreputable Joseph Taverel, a suspected murderer.