A Circuit Court jury today convicted a Maryland Penitentiary inmate of second-degree murder in the stabbing death of a prison guard in October, sparing the inmate from possible execution.

The jury of seven women and five men deliberated for more than 10 hours, beginning Friday evening, before finding Nathaniel Appleby guilty of the reduced charge in the death of Herman Toulson, 39, the first prison guard in the state to be killed in the line of duty. Appleby also was convicted of assault with intent to murder in the stabbing of guard Willie J. Newkirk, and on two weapons charges.

Prosecutors, who charged Appleby with first-degree, or premeditated, murder, had said they would seek the death penalty if Appleby were convicted of that crime.

The finding of second-degree murder indicates that jurors believed Appleby acted with malice, but without premeditation, in the Oct. 6 incident in the infamous South Wing of the maximum-security prison, called the "innermost circle of hell" by Maryland Attorney General Stephen H. Sachs.

Appleby, who turned 26 today, faces the possibility of an additional 51 years tacked onto the life-plus-16-year sentence that he is serving for murder and armed robbery.

Judge Arrie W. Davis set sentencing for April 22.

Appleby had testified that he stabbed Toulson and Newkirk with a homemade knife, or "shank," that he said he always carried with him for protection after a group of guards began beating him.

"I'm pleased that they rejected Mr. Appleby's defense of self-defense and rejected his entire story," said State's Attorney Kurt L. Schmoke. Schmoke had contended that Appleby, acting without provocation, stabbed Toulson in "a brutal and senseless act."

"It was the most senseless thing I've seen in 13 years working in the system . . . cold-blooded murder," Newkirk testified.

Defense lawyer Anton J.S. Keating, who breathed a sigh of relief when the jury foreman read the finding of not guilty in the first-degree murder charge, said that acquittal on that charge was "a great weight off my mind."

The trial, which featured 20 witnesses in 14 days, focused as much on conditions at the South Wing that houses the most violent and disruptive inmates from throughout the state and the actions of guards there as it did on the stabbings.

Among the witnesses were guards who said that they saw Appleby beaten by other guards after the stabbings and admitted that they later omitted that fact from their reports. Appleby was hospitalized with a broken arm and 108 stitches following the incident.

Schmoke said after the verdict that the beatings probably "did play some part in the decision, but I don't think that was the primary factor."

Keating said he wanted to educate jurors about the brutal reality of life in the South Wing, so they could understand the environment in which the incident occurred.

He had urged jurors not to credit the testimony of the guards, whom he charged had lied on the stand and covered up the beatings.

But Schmoke, who called Appleby "the predator of the South Wing," had asked the jurors not to balance the stabbings against the later misconduct by the guards.

"Mr. Appleby is choosing to turn this around to put the system on trial," Schmoke said during closing arguments. But, he said, referring to Toulson's injuries, "it wasn't the prison system whose guts were ripped out on Oct. 6, 1984."