The middle of the 19th century. Hadzi Gencho's daughter Lila and Dyado's Liben son Pavlin are in love. Hadzhi Gencho is proud of his learning and of his pilgrimage to the Holy Land whereas Dyado Liben used to be a rebel in his youth. The two fathers get drunk and start an argument. Hadzhi Gencho leaves offended. Dyado Liben invites Hadzhi Gencho to visit him. The two decide to marry their children. Matchmakers led by Dyado Liben come to Hadzhi Gencho's house. They fix the date of the engagement. The town gossip speaks ill of the forthcoming wedding. She spreads a rumor that a goblin haunts Hadzhi Gencho's yard. Pavlin pays no attention to the rumors and goes to Lila. Her father sees them embrace and begins to shout. He accuses Pavlin of having stolen money from him. Dyado Liben pays Hadzhi Gencho the sum. The engagement is broken. Lila is in the convent. An old woman leads Lila out of a secret door. She mounts Pavlin's horse and they ride away.