This is the second half of a scene, in which Edgar, the butler realizes that he might be in trouble. After kidnapping the cats he had left behind his hat and umbrella at the scene of the crime.
Milt Kahl surely had some fun animating this close up dialogue scene. His extreme use of squash and stretch adds unique comedy to this character. And that wonderful feeling of loose, moving flesh on his face. Of course he knew when he could go this far, his animation of Madame Bonfamille by contrast is an exercise in subtlety and grace.
The dialogue leading up to this moment: "They (the police) wouldn't find a clou to implicate me. Not one single clou. Well, I'll eat my hat if they...MY HAT, MY UMBRELLA!"