U.S. District Court Judge Frank J. McGarr ruled yesterday that baseball commissioner Bowie Kuhn had the authority to cancel Charles O. Finley's sale of three of his Oakland A's players last June for $3.5 million.

The decision confirmed the sweeping powers of the commissioner to take whatever action he deems necessary to protect the confidence and integrity of the game both on and off the field.

Reached in Chicago, Finley said he was disappointed in McGarr's decision and would appeal it. "Maybe this is 18 years of blood, sweat and sacrifice down the drain," Finley said, refering to his tenure in baseball.

In New York, Kuhn hailed the decision in the lawsuit brought by Finley as being food for the game. "This takes the shadow away from the question of the commissioner's powers," he said. "It's much clearer now that the commissioner was intended to be able to step into a situation and say, 'No, you can't do that because it would be bad for the game.'"

McGarr said there was no evidence of ill will or capriciousness on Kuhn's part when he nullified the sales of outfielder Joe Rudi and pitcher Rollie Fingers to the Boston Red Sox for $1 million each and pitcher Vida Blue to the New York Yankees for $1.5 million.

"The fact that this case has commanded a great deal of attention in the vociferous world of baseball fans and has provoked widespread and not always unemotional discussions, tends to obscure the relative simplicity of the legal issues involved," McGarr wrote.

The central point of the case, the judge said, was the Major League Agreement and its history. "All (are) to the effect that the commissioner has the authority to determine whether any act . . . is "not in the best interests of baseball" and . . . to take whatever preventive and remedial action he deems appropriate.

"The questionable wisdom of this broad delegation of power is not before the court. What the parties intended is. And what the parties clearly intended was that the commissioner was to have jurisdiction to prevent any conduct destructive of the confidence of the public in integrity of baseball.

"So broad and unfettered was this discretion intended to be that they provided no right of appeal and even took the extreme step of foreclosing their own access to the courts."

Kuhn vetoed the sales because he said he believed they would upset competitive balance and undermine the public's confidence in the game. Kuhn contended that the sale of three star players to pennant-contending clubs in midseason at such high prices would raise suspicions tha clubs were buying pennants.

The commissioner also said he doubted that Finley would use the money to rebuild the club as he said he would.

Finley accused Kuhn of maliciously depriving him of getting a return on his investment in the players since they were to become free agents at the season's end.

During the 15-day trial in Chicago, Kuhn's attorneys - Peter K. Bleakley, Irvin B. Nathan and Paul S. Reichler - presented testimony from 21 of the 24 owners who said they intended to vest unlimited powers in the commissioner for the good of the game.

Finley's lawyer, Neil Papiano, contended that the commissioner's powers were limited to cases involving moral turpitude and dishonesty in the game. Since Finley had broken no rules in his attempted sale, Papiano charged that Kuhn had acted arbitrarily and capriciously.

Asked yesterday what points he thought most influenced the judge's decision, Bleakley cited testimony from 19 club owners and the two league presidents on the evolution of the commissioner's powers.

The three-man commission that ruled baseball in the 1920s reduced the game in chaos because of their constant bickering. But it was the Black Sox (1919 Chicago White Sox) cheating scandal that unfolded in 1921 that finally prompted the owners to replace the commission with a sinlge commissioner.

The owners vested unlimited powers in the first commissioner, Judge Kenesaw Mountain Landis, who ruled with an iron hand until his death in 1944. The commissioner's powers were considerably weakened until 1964 when the clubs, prodded by outgoing commissioner Ford Frick, restored those sweeping powers.

Bleakley also said that examples of previous commissioners' voiding of somewhat similar sales helped establish that there was precedent for Kuhn's action.

Left undetermined in McGarr's decision was the validity of a clause in the Major League Agreement, baseball's constitution, in which owners waive their right to appeal a commissioner's decision to the courts.

Noting that the owners had agreed to give the commissioner unfettered power, McGarr said he did not have to decide whether that part of the agreement was valid.

A further test of that clause could be made during an April 25 hearing on a suit brought by Atlanta Braves owner Ted Turner against Kuhn for suspending the owner for a year for tampering with a player's contract.

McGarr's decision raised anew speculation that Finley would be pressured to sell his once championship club.

Kansas City Royals owner Ewing Kauffman praised the decision and added, "I think now Mr. Finley will got out of baseball."

Fingers, now with the San Diego Padres, reacted with one word: "Outstanding."

Rudi, now with the California Angels, said facetiously, "That breaks may heart . . . He made his bed and now he has to lie in it."

Blue, still with the A's said, "Today is Nat Cole's birthday and I can relate more to that than what happened to Charlie."