In a shabby New York side street in the mid-1880s, young Cedric Errol lives with his mother (known only as Mrs. Errol or Dearest) in genteel poverty after the death of his father, Captain Cedric Errol. One day, they are visited by an English lawyer named Haversham with a message from Cedric's grandfather, the Earl of Dorincourt. With the deaths of his father's elder brothers, Cedric has now inherited the title Lord Fauntleroy and is the heir to the Earldom and a vast estate. Cedric's grandfather wants him to live in England and be educated as an English aristocrat. The Earl despises America and is deeply disappointed with Cedric's father, his favourite son, for marrying an American. He offers his son's widow a house and guaranteed income, but he refuses to have anything to do with her, even after she declines his mone.
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