Mrs. Rosie Forrest, a.k.a. "Auntie Roo", in the eyes of the staff and children at an orphanage, is a sweet, kind-mannered and children-loving widow, who throws a lavish annual Christmas party at her mansion, Forrest Grange (known to the orphans as the "Gingerbread House") for ten of the best-mannered children at the orphanage. But secretly, she is a demented, sad and miserable woman who keeps the mummified remains of her daughter Katharine in a nursery room in the attic, singing lullabies to her and trying to contact her spirit with the assistance of (phony) psychic Mr. Benton. He fools Forrest into believing that the voice of Clarine, one of the servants, during the fake séances is that of Katharine.