It became pretty clear that feuding among factions at the Siver Spring Hebrew Day Institute had gone out of control the day one rabbi locked another rabbi in his office and called police to complain that a "trespasser" was in the building.

The captive rabbi telephoned the rescue squad for help.Only when the squad arrived did his fellow rabbi relent and let him out.

This was only one incidnet in months of bitter in-fighting that escalated into lawsuits and culminated last week with the breakup of one Orthodox parochial school into two.

Yesterday, while attempts to resolve the dispute in Montgomery County Circuit Court continued, lawyers for the two sides agreed to begin negotiating an out-of-court settlement over division of the school's property.

This latest chapter in the months-old dispute began last Monday when one group, led by the school's board of directors, left, taking 70 students, 13 teachers and the prinicpal Rabbi Jeffrey Rubenstein, with them. It was Rubenstein who was locked in his office in the Feb. 27 incident of by Rabbi Herzel Kranz, the leader of the other side.

While Rubenstein's supporters set up their school-which bears the old name, Hebrew Day Institute-at the Temple Emanuel in Kensington, they had no textbooks or instructional equipment, because the other faction had barred them from entering the library and classrooms at the school's original location in the Silver Spring Jewish Centre.

The faction which stayed at the center-all members of a synagogue whose founder is Rabbi Kranz-retained 62 students and 7 teachers and now call themselves the Hebrew Day School of Montgomery County.

Usually such religious disputes, by common agreement, remain confined within institutional walls. But in this case, the opposing sides could never agree on the ground rules needed before they presented their cases to an Orthodox religious court, and their power struggle spilled over into the county courts.

Now that the dust is beginning to settle, Rabbi Kranz says that "it's a terrible thing that this schmutz (Yiddish for 'dirt') should become public." And Rabbi Rubenstein refuses to discuss the situation because he says "any time the dirty laundry is aired, it makes it worse."

The dispute goes back about a year when the board of directors of the school, which was founded in 1973 and incorporated independent of the syngogue in 1976, began talking about moving to another location because space was becoming cramped.

At about the same time, the school's original principal left to form her own school.

By early in 1979, when talk of the move was becoming more serious, Rabbi Kranz called a meeting of the board of directors "to appoint a new board."

"The school was set up by people in the synagogue who thought the soul of the school was that it was connected to the synagogue" and didn't want to see it move, said Kranz's lawyer, John Grad.

But the directors, upset by the Rabbi's move, claimed that Kranz had no authority to call an election and scheduled their own membership meeting and election for Feb. 27.

Meanwhile, the board moved the school's $21,000 bank balance to a new account, to prevent Kranz from drawing on any school funds. On Feb. 14, the board alleges in its lawsuit, Rabbi Kranz presented an "unauthorized and improperly certified" check seeking to withdraw $16,000 from the school's new account at Citizens Bank and Trust. The board of directors heard about it the next day and stopped payment on the check.

Further, 32 parents claimed that a total of $3,300 in tuition checks which they paid to the school were deposited instead in the synagogue's bank accounts "without (their) consent," according to the board's lawsuit.

Kranz's lawyer Grad, while not commenting specifically on these allegations, said there was a "dispute" over who actually controlled the corporation and who was authorized to use its bank accounts.

About the same time, the synagogue's board increased the school's annual rent for this year from $15,000 to $28,000 and threatened eviction if the full amount was not paid.

On Feb. 23, Kranz moved from his synagogue office at 1401 Arcola Ave. into the school office in the adjacent wing and emptied a desk of one of Rubenstein's staff because, he said, "I wanted a desk of my own."

The same day, a Friday, as honorary "dean" of the school, he directed the synagogue lawyer to fire Rubenstein. Over the next weekend he had the inside and outside locks changed at the school.

But on Monday night, the school board met and told Rubenstein that Kranz had no authority to fire him. He went back to work the next day - the day Kranz locked Rubenstein in his office. Rubenstein, Kranz said, was "waving his arms widly and making a scene" - allegations Rubenstein denies.

That night, the election for new school board directors was held.

From then on, everyone, agrees, discord became chaos. The board of directors successfully asked a circuit court judge for an injunction restraining Kranz and his supporters from interfering with the school. Kranz went to court to try to evict the school from his synagogue.

Last Thursday, in a desperate attempt to retrieve some books, a board member from the faction that had moved to kensington dashed into a kindergarten classroom. What happened inside is in dispute, but police were called and the parent involved was given a summons for assault after an altercation that left the five-year-old splattered with milk.

"Both sides used poor judgment in this whole thing," said one parent who asked no to be identified. "But to have this happen in front of the children-I'm absolutely livid."