For weeks, James Stanley Marshall and David Marrow Blair, business partners in the Blair House Furniture Company in Southeast Washington, had been packing guns in and out of the office, and according to trial testimony, shopping for hit men to kill each other.

Then, on a muggy August day six years ago, Marshall and Blair met in a back office of the store at 2901 Minnesota Ave. SE, and bullets started flying.

This week Marshall and a third business partner, Leon Hill, are on trial in D.C. Superior Court for the first-degree murder of Blair, in a bizarre case laced with fear, bankruptcy and greed.

In January 1970, the idea of opening a retail furniture store in the inner city seemed promising. Marshall - who is black - would put up the money to get the business started. He would use a friend, Dave Blair, a white man, as a "front" for the business to help obtain additional financing.

In time, the "salt-and-pepper" partnership soured, and Blair sold Marshall his interest in the store for $25,000. But strong tensions developed when Marshall fell behind in his monthly $1,000 installments to Blair.

Ava Holland, a bookkeeper at Blair House in 1973, testified yesterday that on the day of the shooting, Marshall had asked her to lay out the store's financial records to show Blair there was no money to pay him the final $10,000.

Earthel Bacon, another former employe of the store, testified she was present when Blair and Marshall began their meeting. She testified she heard two shots, then a third.

Bacon testified that after the second shot, Leon Hill, who had been sitting in the store's show room, when into the office. "Then another shot went off," Bacon, a government witness, testified. "A few seconds later, Mr. Hill came out and just stood there. He was shaking..."

Then Marshall emerged from the furniture office with a pistol in his hand and told store employes that his partner, Blair had tried to kill him.

He said Blair had drawn a pistol first, and that he himself had ducked to the floor, pulled his own revolver and begun firing at Blair, who was crouched behind a file cabinet.

When the smoke cleared, Blair had been struck three times. He died a short time later.

A D.C. Superior Court grand jury heard evidence in the case in September 1973, and chose to ignore accusations against Marshall, who the grand jury felt shot Blair in self-defense.

But a new investigation into the case by police in 1976 resulted in the first-degree murder indictment of Marshall and Hill by a grand jury last December.

Assistant U.S. Attorney C. Madison Brewer, the prosecutor in the case, described the killing of Blair to the jury in his opening statement as "a planned execution of a man for money."

He said government witnesses will testify that Marshall and Hill decided to kill Blair in order to collect the $180,000 insurance they had placed on his life. The government contends that the insurance money was needed to pull the fledgling furniture company out of impending bankruptcy.

But defense attorney R. Kenneth Mundy told the jury in his dramatic opening remarks that a combination of fear and greed led to Blair's death.

"Dave Blair did not put any money into Blair House. He was a partner in the business because he was white and could help Jim Marshall get a line of credit," Mundy told the jury.

"But in the first year, they did a-half million-dollars worth of business. Dave Blair got greedy; he started stealing."

Mundy described Blair as a "rugged individual," and former Marine, judo instructor and impulsive gambler. At one point, when Blair's interests in the business was bought out by Marshall, Marshall became "scared to death" of Blair, Mundy told the jury. And both men began to carry guns.

Herman Overton Jr., a government witness, testified Thursday that Leon Hill, an old Air Force buddy of his and a partner at Blair House, offered him $9,000 either to kill Blair himself or find someone else who would do the job.

After his meeting with Hill, Overton testified he met twice with Marshall, who on one occasion drove Overton in his Jaguar to Blair's neighborhood in Bowie.

"He was telling me about a lot of money," Overton testified. In Bowie, Overton testified, Marshall pointed out Blair's house and showed him a clump of bushes where he could hide and shoot Blair when he came home from work.

Defense attorneys John Shorter and Mundy vigorously sought to discredit Overton's testimony by questioning him closely on several prior convictions for forgery and failure to return a rental car.

According to Overton's testimony, he agreed to testify for the government in 1976 in return for efforts by the government to reduce his five-year prison sentence. Four years of the sentence, for Overton's forgery conviction in Washington, were reduced to the less than six months he had already served, Overton testified.

Another witness, Joseph Raines, said he was hired by Marshall in 1973 and offered $9,000 to kill Blair. Raines said he met Marshall about two weeks after he went to work at the now-defunct Blair House Furniture store in Southeast Washington.

"He talked with me in the parking lot about offing Mr. Blair," Raines said. "I told him I thought I could do it. Mr. Marshall told me that he said Mr. Blair were trying to kill each other."

Raines, who testified that he has become a born-again Christian since his days as a hit-man, said that he followed Blair in his car on two occasions. Both times he said that a "strong, unseen force" intervened and kept him from killing Blair. After that, Raines said he decided to give up the idea.