Uphill of the Californian coastal city of Monterey lies the town of Tortilla Flat. It is inhabited by the paisanos, a hardy, simple race of men descended from the Spanish, the Indians, the Mexicans, and half a dozen other Caucasian heritages. Among then was Danny, a universally liked youth whose grandfather owned two small houses, which meant that he was quite wealthy by paisano standards. Despite this, Danny grew up wild, preferring to sleep in the forest and either working hard or stealing for his food and drink. When Danny was twenty-five years old, he and his friends Pilon and Big Joe Portagee drank two gallons of wine together and in the high spirit of patriotism aroused by the spirit, they all volunteered for the military. Pilon and Big Joe were assigned to the infantry, and Danny was assigned to a ranch in Texas. Ironically, none of them ever left United States soil: Pilon marched around Oregon, Big Joe went to jail, and Danny broke cattle for the duration of the war.
When Danny arrived home from the war he discovered that his grandfather had died and left him the two houses in Tortilla Flat. The weight of the property immediately brings out the worst in Danny. He buys a gallon of wine with his last dollar and goes on a tirade of destruction after drinking most of it himself. He breaks chairs in a poolroom, starts two fights, curses at the Italian fisherman and is finally put in jail for breaking windows. Because he is a war vet, Danny is sentenced to only thirty days in prison instead of the usual six months, but he escapes before the sentence runs its course anyway. One night the jailer, Tito Ralph brings two bottles of wine into the jail to drink with Danny. When the bottles are finished, the two leave together to buy more from a local trader named Mr. Torrelli. When Torrelli finally kicks them out of his house, Danny walks off into the woods to sleep and Tito Ralph stumbles back to the jail to report his escape.
Danny spends the daylight hours of the next day creeping around behind bushes and in ditches, but when night falls, he simply goes about his business. He goes to the back door of a local restaurant and persuades the chef to give him some old bread and meat scraps. While the man was wrapping up the food, Danny stole four eggs, two slices of ham, a lamb chop, and a fly swatter. He then proceeded directly to Torrelli's where he traded the eggs, the lamb chop, and the fly swatter for a water glass of grappa. On his way back towards the woods to cook his dinner, Danny spies his old friend Pilon scuttling towards the woods. "I will pass Pilon by," Danny thinks initially, remembering that he had very little food left, but then he saw that Pilon was clutching something lovingly to his bosom. He calls to his friend, and finally catches up. Danny greets his friend warmly and immediately offers him a share of the pork and bread. The two walk on for a while, and then Pilon asks, as if puzzled, "Danny, how knewest thou I had a bottle of brandy under my coat?" Danny feigns surprise and assures his friend that the brandy was his own to use as he pleased. "Thou art welcome to this big roast of pork I have, but as for thy brandy, that is thine own," he reassures the bewildered Pilon.
The two friends cook and eat the pork while delicately sipping the brandy. As the level of liquid descends, an air of loneliness descends upon Danny and Pilon. They reminisce about friends lost in the war and others in jail. Finally their loneliness turns to a sense of abandonment by their country. Even after the service they had provided they were still homeless thieves. This reminds Danny that he is the owner of two houses, which he had forgotten while he was in jail. Pilon is disturbed by the news. Pilon says that Danny will now forget his friends, but Danny says he will not. Pilon is still doubtful, but the bottle of brandy is empty, and the friends fall asleep.
In the preface to Tortilla Flat, Steinbeck reveals that he intends for his story to parallel the legends of King Arthur and the knights of the round table. "Danny's house was not unlike the Round Table, and Danny's friends were not unlike the knights of it," he writes. He also mentions the legend of Robin Hood, a story that may share even more with this story than Arthur. The archaic form of English used by the characters in dialogue constantly reminds us of this connection. Throughout his literary career, but especially in the early part of it, Steinbeck focused on the working poor people of California. He intends to bring out the unpolished beauty of the people. Though they are thieves, womanizers, and drunkards, Steinbeck intends to portray the paisanos as having as much moral virtue and largeness of heart as the chivalric knights of Arthurian tradition. He does not describe them as being lacking of modern conveniences or ignorant to the ways of the world. Instead, they are, "clean of commercialism, free of the complicated systems of American business, and having nothing that can be stolen, exploited, or mortgaged, that system [commercialism] has not attacked them very vigorously."
Steinbeck's desire to illustrate the beauty and value of the paisano way of life is embodied by Danny. Though he is portrayed in many scandalous situations in the first chapter, Danny's strong moral foundation is constantly reiterated. Danny feels guilty when he steals food from the restaurant chef, and swears to pay him back, but is comforted by the knowledge that the food was only going to be thrown away anyway. He also has a strong respect for the law, as evidenced by his lack of protest when arrested, even though he had been looking for a fight all night. Danny clearly places no value in property. As soon as he is old that he is a landowner, he feels weighed down by the elevated position it puts him in, so he goes out and tries to free himself of it. He then completely forgets about the property for an entire month. Not knowing that he has a place to stay, he sleeps in the woods for the first two nights after his imprisonment. When Danny and Pilon drink alone in the woods, they lament first about their lost friends and then about their unfortunate circumstances, which is further evidence to the order of their value systems.