Oakland Case

One day last week the California Supreme Court handed down a decision that should have been not only big news for San Francisco and Oakland newspapers but a story to warm the cockles of any good reporter's heart. The San Francisco Chronicle reported the decision, passed up the story behind it. No other local paper even mentioned it, nor did any press service carry a line on its wire. The story:

In 1911, saddened by the death of a brilliant son, Publisher William Dargie of the Oakland Tribune died. Publisher Dargie had married a beautiful, improvident Spanish woman named Herminia Peralta, whose great-grandfather had once owned, by land grant from the Spanish Crown, nearly all the territory now covered by the cities of Oakland and Berkeley. To his widow Publisher Dargie left a half-interest in the Tribune, with the privilege of raising money to buy the other half at a court sale to settle his cash bequests. Needing cash herself, Widow Dargie got it from a friend of her husband, Congressman Joseph Russell Knowland.

In 1914 Joe Knowland was beaten for the U. S. Senate. At the end of his political career and ambitious to be a publisher, he lent Mrs. Dargie $65,000, in return for which she assigned him temporarily her half-interest in the Tribune. This half-interest Joe Knowland put up as collateral for a loan with which he bought the other half of the paper. Result of these transactions was to make Joe Knowland and Herminia Peralta Dargie joint owners of the Tribune, with Knowland holding voting control (to cover his $65,000 loan) and acting as publisher and president. Publisher Knowland and Widow Dargie became fast friends.

While Publisher Knowland ran the paper at a tidy profit, Widow Dargie went to Spain, was welcomed at court, visited the family of one Captain Antonio Rodriguez Martin. Widow Dargie took a fancy to Captain Martin, who was the exact age of her dead son, and took him to California. Captain Martin made an investigation of the Tribune, to see to it (so he said) that her interests were protected.

After the arrival of Captain Martin the friendship between Widow Dargie and her publisher cooled. Anonymous letters reached the U. S. Department of Labor urging his expulsion. Joe Knowland went to Washington. In 1927, and again in 1928, Captain Martin left the U. S. When he returned he had an appointment as vice-consul for San Leandro (a suburb of Oakland). He painted the Spanish coat-of-arms on the side of Mrs. Dargie's automobile, stuck a Spanish flag in the radiator cap.

In 1929 Herminia Peralta Dargie died, her devoted Captain Martin (but not Joe Knowland) at her bedside. To Captain Martin she left ("as I would have done had he been my son") one-half of her residuary estate, the other half going to her sister, Mrs. Josefa Peralta Wilson. Taking precedence over these legacies was some $300,000 of cash bequests, which Herminia Dargie had apparently intended to be paid out of Tribune profits.

But after her death the Tribune began to show losses instead of profits. In 1928 its net profit had been $174,953.14, its surplus $1,794,314.87, and it had paid $186,000 in dividends. By 1934 its net loss was $75,995.07, it had a deficit of $152,924.87, and dividends had stopped.

Meanwhile everything connected with unhappy Herminia Dargie was being dragged through California's courts. The cases ranged from unsuccessful attempts to break her will to a successful effort by her sister, Mrs. Wilson, to have Captain Martin removed as executor, on the charge that he had padded an expense account to the tune of $135. Proud, moody Captain Martin refused even to answer the charge. Mrs. Wilson assigned her interest in the estate (onefourth of the Tribune) to Publisher Knowland, and Captain Martin (who formerly sought solace in calculus) found a champion in one Sheldon F. Sackett, publisher of two small Oregon papers, who saw a chance to get a foothold in California. Captain Martin assigned him a two-thirds interest in his fourth of the paper in return for legal expenses. Messrs. Martin & Sackett soon found they had plenty to fight.

In September 1937 Publisher Leo E. Owens of the Ridder-owned St. Paul Pioneer Press and Dispatch offered $1,070,000 for the estate's half-interest in the Tribune and its building company. Superior Court Judge John J. Allen denied the petition on the ground that outside ownership would result in "disharmony." In April 1938 Publisher Knowland, through a private investment company, bid in a quarter-interest in the paper and a half-interest in the building company for $311,200--which was exactly the amount needed to pay off Mrs. Dargie's cash bequests. This sale was confirmed by the same Judge Allen who had denied the $1,070,000 offer seven months earlier.

Left with only an eighth of a paper that had paid no dividend since 1933, Antonio Rodriguez Martin petitioned California's Appellate Court to set aside the sale. In June the court unanimously upheld Judge Allen's decision. Captain Martin appealed to the California Supreme Court, and it was the Supreme Court's refusal to review the decision which made no news on the coast last week.

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