The Maryland Board of Morticians rejected today the application of former congressman Charles C. Diggs Jr. for an apprentice license on grounds his convictions for mail fraud could affect his work as a funeral director.

It was the first time the board has denied a license because of questions about an applicant's moral character, according to George J. Gonce, board secretary.

Diggs, 59, who attended a morticians school, then worked for his father's funeral home in Detroit before and during his 12 terms as a Michigan congressman, called the 5-to-4 vote against his application "outrageous" and declared: "There appears to be a conspiracy deliberately trying to keep me from practicing in this state."

The vote followed an afternoon in which the board held a series of closed-door sessions. Diggs was accompanied by two lawyers, two funeral industry colleagues and his 83-year-old mother Mayme.

The matter is not closed since Maryland law requires a formal hearing whenever an occupational license is denied because of a conviction involving "moral turpitude." The hearing before the board is tentatively scheduled for Jan. 13, but Diggs' chief lawyer, Clarence Mitchell, said Diggs may file suit before then.

Mitchell had told the board he was "acutely aware of the fact this state has a history of denying opportunites to its black citizens that have traditionally been available to whites" and said that "Mr. Diggs is trying to rehabilitate himself." He also noted that the board had failed to act in a prior case involving a funeral director accused of arson.

The board acted after receiving an eight-page advisory from the Maryland attorney general's office that found "little doubt" that Diggs' mail fraud convictions in October 1978 "involve turpitude," defined as baseness, vileness or depravity in Webster's New World Dictionary.

Further, the report said, the convictions "are rationally related" to a mortician's work. Funerals involve significant sums of money, and arrangements usually are made by families at times of extreme anxiety, the report noted. "The potential for abuse and financial misdealing . . . is apparent," said the report, written by Jack Tranter, an assistant attorney general in charge of occupational licensing boards.

Diggs' convictions in U. S. District Court for the District of Columbia were for 11 counts of mail fraud as well as 18 counts of making false statements. The offenses were connected with a scheme in which his congressional employes kicked back part of their salaries to Diggs and the congressman's placement of two persons on the congressional payroll who worked for him or his family's funeral business, the House of Diggs in Detroit.

Diggs served 10 months in a federal prison camp in Alabama. Last August he moved to Fort Washington in Prince George's County and planned to open a funeral home in the county.

Following the vote, Mitchell, Diggs' attorney, pleaded to have the wording of the decision changed from "deny" to "refrain from granting at this time." After the board held another closed-door conference -- the fourth of the day -- the original language stood.

Diggs, whose Michigan funeral license expired Oct. 31, needs a year's apprenticeship before a full Maryland license can be granted. He holds a license in Ohio, due to expire Dec. 31, but Maryland customarily grants reciprocity only with the state that issued the original license, in this case Michigan. Michigan doesn't have a reciprocity agreement with Maryland.

Since Sept. 1, Diggs has worked for the Elizabeth L. Phillips Funeral Home in Baltimore. His sponsor, Phillips, said of Diggs, "He's doing paperwork for me, helping with the business things. He's not working as an apprentice now and won't be until he gets his license."

Morticians' board members who voted to deny that license were its president, Donald Borgwardt, John Merceron, Walter G. Dabrowski, Doris McCully and Richard Singleton. Supporting Diggs were Stanley Levinson, Calvin Scruggs, Leroy Dyett and Kenneth Law. Gonce, the board secretary, abstained.

Diggs, visibly upset following the vote, said he doesn't think his convictions "are related at all" to funeral work.