Jerry Day and Toni Carstairs, a pair of vagabond thieves in love, are on a boat from Shanghai when Jerry receives word from Connecticut that the parents of his dead wife want to take possession of his daughter Penelope.  Jerry is willing to sell Penny to his brother-in-law for $75,000, but Toni, after three years of life on the run, thinks she and Jerry should want the baby and leaves for Paris alone.

In Connecticut, among his stuffy, disciplinarian in-laws, Jerry decides to claim Penny and tells her he is her father.  Jerry takes Penny to New York, where he sells a bogus option for a mine to a nice elderly man, Felix Evans, then sails for Europe with Felix' $5,000 check.  Felix is on the same boat, however, and disembarks in Paris.

There, Toni gives Jerry an ultimatum: a life of dodging debtors or settling down with her.  Although Jerry gets a job selling real estate, Felix reveals he is also a thief and involves him in a scheme to steal some pearls.  Felix' proposed victim is the wealthy Mrs. J.H.P. Crane, who befriends Penny.

When Penny's school bill comes due, Jerry must overdraw his account to make the payment.  At that point, Mrs.  Crane offers to adopt Penny, but Jerry vows to make ends meet.  Mrs.  Crane then throws Penny a party during which Jerry steals Mrs.  Crane's pearls to avoid debtor's jail and hides them in Penny's teddy bear.  When Penny asks Jerry if he stole the necklace, he swears on their "honor bright" system of honesty that he didn't do it.  Penny, however, finds the necklace and realizes her daddy lied.  Toni tells Penny that Jerry stole the necklace for her, then tells Jerry they're through.

A remorseful Jerry goes to Felix to retrieve the necklace, but Felix confronts him with a gun, and in the ensuing struggle, Jerry shoots him.  Jerry, himself wounded, returns the necklace to Mrs.  Crane and offers her Penny, then says goodbye to his daughter.  As Jerry collapses, he tells Toni he has finally stopped running.