Since 1963, Joseph C. Frady has sat in a prison cell, the first two years on death row, for the brutal killing of a Southeast Washington man.

But two days ago, 17 years after a jury found him guilty of first degree murder, the federal appeals court here overturned his verdict, saying the trial judge had instructed the jury improperly. The court said the government must give Frady a new trial -- an unlikely prospect -- or the judge can find him guilty of manslaughter and he would go free, having already served as much time as if he had been convicted of that crime.

"I had a positive attitude," Frady said of his appeal. "I just thought this was my year." An official at the Atlanta federal prison where Frady is being held said he was "walking around here about three feet off the ground."

The appeals court decision could make it much easier for defendants to challenge their convictions long after their trials are over.

In this case, the court said that, based on decisions five years after Frady's conviction, the judge's instructions to the jury were incorrect. The words of those instructions have been changed since that time because the courts said they have led juries to believe they could not find defendants guilty of lesser crimes.

The appeals court then cited a later Supreme Court case that said that when the instructions raised serious doubts about a jury's conviction, it could be reversed.

Prisoners have the right -- and frequently use it -- to petition courts to have their cases overturned, even after they have exhausted their appeals. But it is very rare for a court to overturn a case like Frady's so many years later.

In this instance, it was another prisoner, a so-called jailhouse lawyer, whose friendship with Frady lasted through two prisons and over a separation of 12 years, who petitioned the court. When the appeals court decided to hear oral arguments, Frady's case was argued by a student and professor from the Georgetown Law Center.

Frady and a codefendant were convicted of first-degree murder in 1963 when a 40-year-old man was bludgeoned to death with a piece of a broken table in a melee at the man's home. To this day, Frady maintains his innocence: "No ma'm', I never killed nobody," Frady told a reporter yesterday.

He was jailed in the "penthouse" of the old D.C. Jail, where those who had received the death sentence were held.

It was there that his friendship with Michael (Miami Mike) Kleinbart began. Kleinbart knew about Frady's case because of the publicity it had received, and began shouting up to Frady from the jail dining room below.

In 1965, when the U.S. Court of Appeals commuted his death penalty to life in prison, Frady was transferred to another jail and he and Kleinbart were "busted up," he said. But 12 years later, they met again, this time in the federal prison in Atlanta. Kleinbart had been sentenced to 32 years in jail in the shooting of two U.S. Park Police officers at the Jefferson Memorial in 1975.

Kleinbart, by then an accomplished jailhouse lawyer, "got to reading my [trial] transcript and different things," Frady recalled. Last September, Kleinbart petitioned the court asking that the conviction be set aside.

The court said it wanted to hear oral arguments in the case, but Kleinbart couldn't leave jail to make them.So his place was taken by Kathleen Hamor, then a third-year law student at Georgetown University, under the supervision of professor Michael Geltner.

The court agreed with Kleinbart's argument.

Specifically, the court said that Judge George L. Hart Jr. gave two improper instructions to the jury when he explained the crime of first degree murder at the close of Frady's trial. Although those were the standard instructions given to juries at the same time, the appeals court noted, they were found to be improper in later court cases. If proper instructions had been given, the appeals court said, the jury might have found Frady guilty of the lesser offense of manslaughter.

Judge Harry T. Edwards, who wrote the opinion handed down Monday, was joined in his decision by Judge Carl McGowan and Chief Judge Daniel M. Friedman of the United States Court of Claims, who was sitting on the appeals court by special designation.

The court said that the ambiguity of the evidence, coupled with the erroneeous instrucions to the jury, raised serious questions about the accuracy of the jury's verdict. Consequently, Frady deserved a new trial, the court said.

"This means no case is safe," said assistant U.S. Attorney William H. Collins Jr., who prosecuted Frady's case in 1963. Another prosecutor said that while it may be too early to tell, the decision could be "fairly serious," because "it could mean that anybody convicted years ago could get a new trial."

But Geltner said he didn't feel the ruling would lead to a rash of other cases being overturned. The court's decision, he said was based on a fundamental point of law: that serious errors in jury instructions go to the very heart of a criminal case -- whether a person is guilty or innocent.

It is unlikely the government will seek to retry Frady on the first-degree murder charge because so much time has elapsed. The court said that the trial judge can instead rule that Frady was guilty of manslaughter, but that crime carries a maximum penalty of 15 years in prison -- time that Frady already has served.

Georgetown University lawyers yesterday petitioned the court to release Frady while the government figures out what it plans to do. In any event, Frady said he would have been eligible for parle in 1983.

Newspaper accounts of Frady's trial in 1963 portrayed the 27-year-old as an arrogant young man who giggled during court proceedings, sat with his feet on the defense table, and seemed to enjoy his role as a flippant defendant, an attitude Frady does not deny.

"When I was on the street, I thought I knew everything. I was just a young kid and thought the world owed me something," Frady said yesterday. In prison he said, "I came from a young kid to a grown man"; Once he said he would have described himself as "young and wild. Now I'm old and a little smarter."

Frady said he hasn't forgotten the more than 700 days he spent on death row, released from his isolated cell twice a week to take a shower. "How can a man forget" he asked. But nevertheless, he said, he never believed he would die in the electric chair. "I just think the evidence they had on us wasn't good enough to executive us," Frady said of himself and his codefendant, Richard Gordon, now 36 years old.

Gordon is now a fellow inmate at the Atlanta prison, but Frady said they never discuss what happened to them 17 years ago. His case was not included in Frady's appeal.

Frady was told of the decision by a prison case worker yesterday, but says he is still skeptical. "Let me put it to you this way, I ain't seen nothing on paper yet." A prisoner doesn't believe he's out, he said, "until you see the door shut behind you."