In the 1930s, a Washington lawyer named Joseph K. Davis used to take his daughter horseback riding near Rock Creek. One time, she remembers, he looked through the trees at a wonderful mansion on a hill and mused, "Someday I'd like to have a house like that . . ."

Just before America entered World War II, Davies bought the mansion with its 20 hilly acres of forest and garden. He called it "Tregaron" after his father's village in Wales, and until his death in 1958, it remained the home of this extraordinary man - self, made millionaire, intimate of Woodrow Wilson and FDR, controversial ambassador to Moscow, husband of cereal heiress Marjorie Merriwether Post.

Now Davies's descendants, who still own Tregaron; might talk of it with a certain nostalgia for a bygone era of great events and fabulous wealth, but they are also frustrated at the difficulty they are having in selling it for top dollar.

In short, Tregaron has become a kind of nightmare for a great number of people - the family; the developers who are trying to buy it to build 100 houses there; the neigbbors in Cleveland Park and Woodley Park who are fighting development; and Washington international school, which leases the mansion and has vowed to remain.

"I wish to God we didn't own it," said Eleanor Davies Ditzen, 72, eldest of Davies's three daughters and eldest surviving family member. "We've been trying to get rid of it ever since (my father) died . . . We've never gotten enough money (by leasing it) to pay the taxes . . ."

Almost every embassy in town has looked at the site, said real estate broker Dorothy Newman. "Ive been a decade trying to sell it," she said. "I've had interest but couldn't get a contract. The ambassador would change or there'd be a new government, that sort of thing."

And zoning was a problem. The estate's zoning would allow individual houses on quarter-acre lots - but no apartments, office buildings or clustered town houses. The land has been considered too rough and steep to build a checkerboard suburban-style development of houses, and the highly organized neighbors prevented rezoning.

Then late year there came a break in this pattern. Suburban developer Alan Kay, who had created a storm of controversy with his plan to build 100 houses on the old Rockefeller estate on Foxhall Road, got in touch with Newman to ask if an embassy might buy the mansion on the Rockfeller property as an ambassadorial residence.

The answer was: not without extensive remodeling. (The house is basically wooden, and "diplomats will only live in stone houses") But Newman and Kay hit it off. "You know, he's so bright and quick," she said. "Jokingly I said, 'Well, you know, since you're buying up all of Washington, the best spot for you is Tregaron.'"

Kay asked a few questions, looked at a topographical map of the property, which is located just northeast of the Washington Cathedral, and that same day said, "Ok, write up a contract." Kay put up more than $100,000 earnest money on the $3.75 million sale, which gave him 30 days to study the property and back out if he wanted.

Disclosure of the sale last Nov. 30 started another storm of protest. Now the situation is this:

Kay, having sent in squads of engineers from his firm of Rozansky and Kay to study the property, concluded it would be impossible to build a checkboard development on Tregaron without bringing in bulldozers to level the place first.

Thus, while Kay thinks a checkboard development might work nicely on the rolling terrain of the Rockefeller estate, it wouldn't work so well on the steep hills and deep gullies of Tregaron. The Rockefeller estate is a football field compared with Tregaron.

So he let the 30 days pass without consummating the sale. He is renegotiating with the family. His deposit is still in. His hope, he said, is to build about 100 clustered town houses on "no more than four or five acres of the land," leaving the school to purchase the rest.

"We'd to build houses that would be compatible with the neighborhood and the school, leaving the school to operate as they do and leaving all of the trees and not disturbing the environment," said Kay.

This may be difficult. After dealing with the family, Kay will have to get the school to agree, and then the neighbors. He'll need a rezoning for the cluster, and city officials say that could take 18 months even though they note that clustered town houses, which leave a good deal of open green space, would be the most appropriate form of development for Tregaron.

Meanwhile the school has sued the family, claiming it has a prior contract to buy Tregaron for a million dollars less than Kay offered. Not all family members signed that "contract," and nobody seems to be taking the suit very seriously except the school. The family has countersued.

he school's position is that it wants the whole estate, according to its attorney Robert Zimmer. Zimmer and other school officers have meanwhile launched a campaign to obtain funds and guarantees enabling them to buy Tregaron. Even if Kay consummates his deal, the school's lease gives it 10 days to match Kay's price - regardless of the outcome of any suit.

Zimmer claims the family has offered to "settle" the suit with a $3.3 million sale to the school. Not true, say family members. They claim that the $3.3 million is a new offer from the school.

School director Dorothy Goodman said the situation has her "hanging by my eyelashes . . . I hope in my most optimistic moments the developer will just go away. I picked up the phone the other day and it was another developer. You know, you just feel the vultures are there . . ."

Goodman said she thinks the school's original deal would have gone through but that the death last spring of Rahel, one of Davies' three daughters, "upset the balance of power in the family . . . Our conviction is if Rahel lived, she and her sister (Eleanor) could have persuaded Emlen (the third sister)."

Emlen Davies Evers, 61, the daughter who recalled horseback riding with her father in the 1930s, admitted with a smile that she has been the "bad wolf" who held firm against signing the school's offer.

"I'm not against the International School," she said. "I'm only against the family giving away Tregaron for less than its intrinsic value. We have to think of what we can get out of Tregaron. I'm thinking about the protection of my children."

She did sign the Kay contract, however. She thinks it's a good one.

Goodman, a dynamic woman who describes herself as a Wilsonian "Eighteenth Century rationalist" and idealist whose life's dream is to foster international understanding through her school, said she admires Emlen. "She's very international," said Goodman. "She understands intellectually better than the others what this is all about. They've all been very friendly. This is a financial question, it isn't a personal one."

When Rahel died, her interest in Tregaron went to her daughters in Washington, Suzzanne W. Wright, 41, and Jennifer Fitch Moleon, 35.

These active young women, both with families of their own and many jobs and interests, tended to side with their Aunt Emlen. They wanted top dollar for the property. And since they knew Dorothy Newman from Newman's long friendship with their mother, they encouraged Newman to find a buyer and were delighted when Kay came into the picture.

"I think (Tregaron) is beautiful," said Wright, who remembered many happy times there as a child when she would walk the grounds with her grandfather as he recited Shakespeare from memory. "But it took a fortune of another era to keep it like it was . . . If the citizens (in surrounding neighborhoods) feel so strongly about having it as a private park, why don't they all get together and buy it for a private park? To expect the family to maintain it for them it just not too realistic."

"I think Kay does want to do quality development and the new type of environmentally thought-out housing," said Moleon. ". . . I'd like to have one, if town houses are built there."

Rahel's death has also led to some bitterness for Wright and Moleon. They have sued to contest the validity of their mother's will, claiming in their suit that their stepfather and Rahel's last husband, Washington lawyer E. Fontaine Brown, exercised "undue . . . duress" and "fraud" on Rahel to get the will written in his favor and that their mother "was not aware of (its) contents. . ."

Brown declined to discuss the matter with a reporter, other than to say he has filed an answer in court emphatically denying these allegations.

Although Elenaor Ditzen is still alive, Davies willed Tregaron in such a way that her two children are now owners of it with her, Emlen Evers, Wright and Moleon. They are former U.S. Sen. Joseph Davies Tydings and his sister, Eleanor Tydings Schapiro.

Tydings, who said he was extremely close to the grandfather for whom he was named and who pressed him into public service, had originally disagreed with Emlen Evers and had signed the old contract with the school. Now, like the others, he is glad of the prospect of a sale at a higher price to Kay.

Tydings said he thinks Kay can get Tregaron rezoned for clustered town houses "because the charcter of the city has changed so much. The city very mush wants to bring back good solid middle class people, both black and white."

Eleanor Tydings Schapiro said she lives in hunt country north of Baltimore and feels generally about developers the way the Tregaron neighbors do. But, she said, "I have a reason - because we're fox hunters, and we want to keep the farmland going (to hunt over). That has more reason than just an estate next door that they can air their dogs on."

The neighbors are powerfully organized into several groups - the Cleveland Park and Woodley Park citizens associations, among others.Basically, they are confused about the status of Tregaron right now. They want it to remain as is and are supporting the school's efforts to buy it all.

At the same time, they have filed an application to have the estate designated an historic landmark, which could delay any development up to 180 days - but it wouldn't stop development.

Also, the neighbors are cautious on the question of Kay's town house cluster idea. "That probably wouldn't be so horrendous," said neighbor Kathleen Wood, "but we'd have to see. We'd prefer to have the school have the whole thing."

While the neighbors have stopped rezoning in the past and may try to stop it this time, the developer would have some clout in negotiating with them. Under current law, he can always go ahead with a checkerboard development on quarter-acre lots - which nobody really wants, but which in all likelihood nobody could stop.

Tregaron was designed and built between 1912 and 1914 by Charles Adams Platt, one of America's foremost country house architects who also designed the Freer Gallery and other Washington buildings. Ellen Shipman, a landscape architect, designed the grounds. The original owner was James Parmalee, a mid-western financier who named the estate "The Causeways."

"Tregaron was a very unusual project," said Keith Morgan, a junior fellow at the Dumbarton Oaks Garden Library and who is studying Platt. "It was a very grandiose space for a small number of people (to live in) with an enormous number of servants." It included the classical Georgian country house, stable, superintendent's cottage, and greenhouse. The grounds contained gardens, a bridle path, a golf course, bridged running streams. It's original cost was $326,000.

Next: The Davies Heirs CAPTION: Picture, The mansion on the Tregaron estate was built between 1912 and 1914. It was designed by Charles Adams Platt, who designed the Freer Gallery. By Bob Burchette - The Washington Post; Map, Shaded area shows location of the Tregaron estate, now center of dispute. Copyright (c) 1978, Washington Post Co.