The girls and Pepito visit Pepito's relatives' hacienda in Spain and encounter Pepito's cousins who are naughty and mischievous "bad hats", the way Pepito used to be (only worse!) The cousins terrorize everything in sight: various animals, the guests at their parents' fiesta, and even the girls. But after Madeline rescues a baby bull from their reaches, the Horrible Hats meet up with "El Enojado", an angry toro who teaches them a lesson.
The circus has been cancelled because Monsieur Funnybones, the world's shortest clown, has lost his ability to laugh. When the forlorn performer shows up at the Old House disguised as a chimney sweep, Madeline teaches him that being tall is just a state of mind.
The girls are looking forward to a big costume bash at Pepito's house. But a week or so before the festivities they all come down with chicken pox and are quarantined in the Old House. Then, when Dr. Cohn declares that they have recovered just in time for the party, Madeline helps everyone crea...
