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As Alejandro tries to explain to Marion why bullfighting is noble rather than cruel, he is distracted by the sight of Gitano in the ring, easily outsmarting the matadors. At the ceremony, Maria frets for the safety of her boyfriend, Manuel, who wants to be a bullfighter. They are shocked when Leonardo, showing no fear of Gitano, forcibly pulls the bull away from the car, then rides away on his back. As they drive through the ranch, Gitano attacks their car, impressing them with his spirit. Meanwhile, Alejandro invites the famous bullfighter Fermin Rivera and an American starlet, Marion Randall, to attend the tests with him. Before the ceremony, Rafael promises Leonardo that if the bull proves himself courageous, the boy can keep him. When Gitano is two years old, he is entered in a public test of bravery at Alejandro's ranch. On the next holy day, Leonardo brings Gitano to be blessed by the priest, and after the bull kneels before the clergyman, he receives a double blessing. Days later, however, Señorita Sanchez reveals that a letter has arrived from Alejandro that once again grants Gitano to the Rosillos. When Leonardo hears the news, he rushes to the ranch, shaming Rafael with his tears. Soon after, Vargas insists that Gitano be branded with the rest of the Videgaray herd, and Rafael is forced to assent. Leonardo begs his father not to sell Gitano to the ring, but Rafael ignores him, confident that Leonardo will outgrow his childish attachment. One day, Rafael spots Leonardo using a red cape while playing with Gitano, and warns the boy not to train the bull to enjoy the cape, or he will become a killer in the bullfighting ring. Over the next months, Gitano grows into a fine bull who loves to fight. After class, the boy asks his teacher, Señorita Sanchez, to help him write a letter to Alejandro, reminding him that the cow was a gift. In school, where he will be the first Rosillo ever to graduate, Leonardo learns about former Mexican president Benito Juarez, who rose from the lower classes but never forgot his roots. The boy soon develops a strong bond with the similarly motherless youngster. While his father and sister Maria admire the calf for his bravery, Leonardo names him "Gitano," meaning gypsy. Although he is too late to save her, he brings back to his bed her newborn calf. That night, a storm awakens Leonardo, who rushes outside to rescue the cow. Despite the protestations of Rafael's ten-year-old son Leonardo, who states that Alejandro gave them the cow in gratitude for saving his life, Vargas insists that the ranch owns the cow and its soon-to-be-born calf.
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On the day of his wife's funeral, Rafael Rosillo is ordered by Vargas, the chief accountant for Rafael's boss, millionaire ranch owner Don Alejandro Videgaray, to return a cow owned by the ranch.
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