The House of Fear is one of my personal favourites in the series, possibly the favourite. It's a good old fashioned spooky murder mystery that's set in a remote Scottish manor house sitting atop a cliff. The story references the original Conan Doyle story, The Five Orange Pips, and it features more than a few mutilated corpses, secret passages, and plenty of eccentric characters including the particularly solemn housekeeper Mrs. Monteith. There are some great performances as usual, with a particularly entertaining Inspector Lestrade and Bruce Alistair.

Synopsis

Sherlock Holmes is visited by Mr. Chalmers, an insurance agent, who tells a strange tale. Seven elderly single men calling themselves The Good Comrades live together in the remote Scottish castle of Drearcliffe House. Recently, one of the Good Comrades received an envelope containing seven orange pips and later that night he was murdered and horribly mutilated.

A few days later a second envelope was delivered containing six pips, and the recipient also died mysteriously soon afterwards; his corpse battered at the foot of the cliffs. Chalmers holds £100,000 in insurance policies on the seven men and suspects that one is murdering the others in order to collect the money, and so he asks Holmes to investigate.

Holmes agrees to help after spotting that one of the men is a certain Dr. Merrivale. Holmes and Dr. Watson soon arrive at the village hotel, where they bump into a drunken Alex MacGregor who tells them about the curse on Drearcliffe House, “where no man goes whole to his grave”. Mrs Monteith, Drearcliffe's housekeeper, comes into the bar and announces that there's been another murder, so Holmes and Watson accompany the police sergeant to Drearcliffe to find that Guy Davies has been killed, and his body burned beyond recognition.

The next morning, one of the remaining Good Comrades – Captain Simpson – spots a needle sticking out of his chair, a needle that Holmes soon discovers is covered in poison. Holmes wonders how Simpson was able to spot such a small needle and decides to test him at supper. Holmes slips some bitter almonds into Simpson's brandy and when the captain smells it, he thinks it's cyanide which prompts a very different reaction from the one to the poisoned needle. Later that day, a distressed Alan Cosgrave receives an envelope with four orange pips enclosed, so Dr. Merrivale offers to stay with him in his room that night.

As Holmes and Watson stand watch, Inspector Lestrade arrives at Drearcliffe to investigate the goings-on, just in time to miss someone attacking the sleeping Dr. Watson. They all rush up to Alan Cosgrave's room to find him missing and Dr. Merrivale bound and gagged. The morning brings another gruesome discovery; in the grounds of Drearcliffe, the body of Cosgrave has been mutilated by a dynamite explosion. Very large footprints are found but no other clues present themselves.

Captain Simpson is the next to receive the orange pips, so Lestrade persuades him to sleep in a downstairs room while he, Sgt. Bleeker and some bobbies stand guard. Holmes and Watson go and investigate the nearby beach where they find some footprints and dropped tobacco, before a falling boulder almost ends their lives. Lestrade is locked in a cupboard and when Holmes gets back and lets him out, they discover a bludgeoned police sergeant and that Captain Simpson is now missing.

The following evening, Lestrade sits at dinner and is given an envelope containing a note from Alex MacGregor saying that he has important information about the case. Holmes accompanies Lestrade to MacGregor's tobacco shop, only to find they are too late; he's been murdered to keep him from talking. Meanwhile, Watson is keeping guard at Drearcliffe during a thunderstorm and gets led on a wild goose chase. Holmes and Lestrade return and discover nothing amiss, despite Watson's dishevelled appearance.

The next day, Holmes tracks down the fisherman that delivered Alex MacGregor's note and when he mentions ghosts, Holmes and Watson go to the graveyard where Watson has a chat with an owl and discovers that the corpse of MacGregor is missing. On returning to Drearcliffe, they find that Dr. Merrivale has been crushed beneath a giant boulder at the foot of the cliffs, leaving Bruce Alistair as the sole remaining member of the Good Comrades.

Lestrade jumps to the obvious conclusion that Bruce Alistair murdered the other Good Comrades but Holmes has deduced the truth, and when Watson disappears, he discovers a secret room behind the fireplace with the prompting of Alistair. Holmes and Lestrade descend the winding stairs to a secret room where all the Good Comrades - alive and well - are in hiding with their ill-gotten gains, ready to murder Watson before boarding a waiting ship.

Alistair was framed for the murders and the collection of the insurance money by the other six. They did commit the real murder of Alex MacGregor, because one day he saw one of the supposedly-dead comrades walking on the beach.

The film ends with our protagonists back in Baker Street, where Holmes asks Watson to explain the details of the case to Mr. Chalmers, much to Watson's chagrin. Holmes gives the reward money for solving the case to Bruce Alistair – for prompting him earlier and thus saving Watson's life at Drearcliffe.