With royal permission, Pan Hung holds a tournament to decide on a Marshal to lead the Army against Liao, and then hurts the contestants by foul means, hoping to put his third son Pan Pao in command. Meanwhile, he provokes Yang Yeh to stop his sons from taking part in the duel.

The curious Yang No. 7 detects Pan Pao's foul play and comes up to confront him, accidentally killing him. Hung pleads the case to Emp. Tai-tsung, who orders to have the Yangs beheaded. But the Yangs are proved innocent when the case is heard by Magistrate Pao.