It must be understood, that this was the old West.
Occasionally, a reputable citizen then, could, and needed to, pursue the truth, in determining who the criminal is.
There were dozens of Bonanza episodes like this, plus one must remember that Sherriff Coffey was not present.
Of course Little Joe had every reason to pursue this.
He didn't hurt Horace, only sought the truth.
Further, no one seems to have seen just how sickening the Horace character was, almost mentally ill.
1. He knew the girl was engaged to Joe.
2 He was so messed up, to think that somehow he owned Sally, just because he wanted her, though she did nothing to encourage this.
That landlady has got to be one of the weirdest, and dysfunctional characters in any Western, knowing Horace was so unstable, but constantly defending him.
A perpetual liar, she was.
But the ending was so empty.
We did not fully see what happened and there was no justice.