Mr. Scruffy is the former pet housecat of the late Lord Shojo, and was a part of Shojo's deception of the upper class of Azure City. Shojo used Mr. Scruffy as a part of his complex ruse to pretend that he was senile by listening to and being persuaded by Mr. Scruffy's "advice" on important matters.
Due to Mr. Scruffy's apparent sway over the leader of Azure City, he is also known as the "power behind the throne" of Azure City. While Mr. Scruffy is not, strictly speaking, a member of the Sapphire Guard, his association with them is quite tangible and unique.
After Azure City fell to Xykon, Belkar took on Mr. Scruffy as his friend and companion, even using him in battle against Tsukiko. Belkar threw an angry Mr. Scruffy into Tsukiko's face, who proceeded to badly claw her and distract her in a battle with the resistance. (Belkar was originally going to join Tsukiko and switch sides, until he remembered how much he wanted to throw a live housecat into someone's face.)
Mr. Scruffy was also the reason the three rival resistance groups of Azure City united against Xykon. He was considered to be an omen of the will of Shojo's spirit. At first, the leaders thought that the leader should be Belkar who accompanied him, but then decided that Mr. Scruffy's tail pointed towards Thanh.
He later accompanied Belkar when the halfling left Azure City. Mr. Scruffy has since directly aided Belkar in battle, seemingly becoming the halfling ranger's animal companion and one of the few things he seemingly does not loathe entirely.
Mr. Scruffy appears to be a very violent cat, and during Belkar's battle in the arena in the Empire of Blood he rips open the stomach of Belkar's almost 2. lvl commoner opponent (Belkar later feeds a guard with his intestines). Mr. Scruffy goes back to his place with V while Belkar tells him to "chill with the big people".
Elan and Haley agrees that Belkar and the cat both "averages somewhere south of neutral", and together with Bloodfeast the Extreminator the dinosaur/lizard he seems to make Belkar's only real friend.