A federal appeals court yesterday overturned the conviction of a former Green Beret doctor found guilty of murdering his pregnant wife and two daughters. The court ruled he was denied a speedy trial.

The doctor, Jeffrey R. MacDonald, was denied his constitutional rights because of "unreasonable delays" "sheer bureaucratic indifference" and "the government's calloused and lackadaisical attitude," the 4th U.S. Circuit Court of Appeals said in 2-to-1 decision.

MacDonald was not indicted for the 1970 murders until 1975, after his father-in-law, a New Jersey executive, financed a private investigation and prompted congressional hearings on the case.

"We cannot and do not assess the correctness of the jury's verdict," the court said. MacDonald was convicted of the murder last August after investigators found that physical evidence at the scene -- a pajama top soaked with his wife's blood and fibers under his wife and children's bodies -- conflicted with his story.

MacDonald, who was stationed at Fort Bragg, N.C., contended that four drug-crazed "hippies" had broken into his quarters while he was asleep on the couch and had killed his wife and daughters, aged 2 and 5. One of the assailants, he testified, chanted, "Acid is groovy. Kill the pigs."

Collette MacDonald's body, stabbed more than 40 times, was found in a pool of blood. Her husband was found unconscious with several superficial wounds and one serious wound in this rib cage. The word "pig" was scrawled on the headboard of their bed.

Army investigators charged him with the murder, but at a closed hearing MacDonald's lawyers argued successfully that the evidence had been badly handled at the scene of the crime. MacDonald was given an honorable discharge and moved to California, where he became an emergency room doctor in Long Beach.

At the Army hearing, MacDonald's father-in-law, Alfred Kassab, vice president of an egg-retailing company in Cranbury, N.J., stoutly denied that MacDonald could have committed the murders. "He was an all-American guy," Kassab said at the time, noting that MacDonald had dated his step-daughter since high school.

But when Kassab obtained the transcript of the full hearing in late 1970, he became convinced that MacDonald was the murderer. He then undertook what he described as a "legal vendetta," spending 30 to 40 hours a week lobbying Justice Department officials, tracing leads and consulting lawyers. At one point he visited every member of Congress with material about the case. Hearings were held before the House and Senate Armed Services committees.

The pressure prompted the Defense Department to order a new investigation.

In 1972, the Army turned the case over to the Justice Department -- which had jurisdiction because the murder occurred on federal property and because MacDonald was no longer in the armed services.

It took Justice Department lawyers more than two years to convene a grand jury to hear the evidence, and that was the delay cited by the appeals court in overturning the conviction. "Not only was [MacDonald] under a cloud of suspicion for five years prior to the trial, but the personal pressure and anxiety of a threatened prosecution for murder is demonstrated by the expense and concern he expended in attempting to have the charges resolved," the court said.

Dissenting Judge Albert V. Bryan Sr. said, however, that the Justice Department "was wise to await a mature completion" of the investigation.

MacDonald's "guilt and sanity were established to the satisfaction of the trial jury beyond a reasonable doubt," Bryan wrote. "Nevertheless, this court absolves him forever of this hideous offense, shockingly laying his release exclusively on the failure of the government to prosecute within a shorter time than it did."

At the trial, the government contended that MacDonald, was suffering from extreme fatigue and had flown into a rage when one of his daughters wet the bed. He and his wife fought over the issue, and he murdered her, then killed his children after one of them witnessed the argument, prosecutors said.

In a phone interview from New Jersey yesterday, Kassab said he was "furious" and called the decision "ludicrous. Are we to let a triple murderer go loose just because he wasn't tried fast enough?"

However, Wade Smith, MacDonald's attorney, said his client did not get a fair trial because of the delay. One of the defense's key witnesses, a heroin addict, said she could not remember events 10 years old -- a key element in the appeals court decision.

Smith said he called MacDonald at Terminal Island, a minimum-security California prison."He said he's never been so happy. He was going to go out and jog five miles immediately," Smith said.

The Justice Department will decide in the next few weeks whether to appeal the decision.

MacDonald must remain, in jail pending a resolution of any such appeal.

While convictions have been overturned before on grounds of delayed trials, the MacDonald decision is unusual in that it is based on delays that occurred before the defendent was indicted, while no charges were pending. t