A Baltimore judge has overruled the Maryland Board of Morticians and ruled that former Michigan congressman Charles C. Diggs Jr. should be granted an apprentice funeral director's license in Maryland.

The board rejected Diggs' application last December on the grounds that his convictions for mail fraud could affect his work as a funeral director. According to board records, it was the first time the board had denied a license because of questions about an applicant's character.

In a decision issued yesterday, Judge Solomon Baylor of the Baltimore Supreme Bench (circuit court) agreed with Diggs' lawyer that the morticians' board was improperly constituted. At the time of the 5-to-4 vote against Diggs, the board did not have two consumer members, as required, and included one member who is a funeral director, rather than a mortician, as the law required at the time.

"I'm happy about it because I think the congressman got unfortunate treatment," said his lawyer, Clarence Mitchell Jr., of Baltimore. "He really had paid his debt by serving time."

Diggs served 10 months in a federal prison camp in Alabama and remains on parole until July 23, 1983. Last August he moved to Fort Washington in Prince George's County and said he planned to open a funeral home in the county.

Under Maryland law, an apprentice must work for a year under the guidance of a licensed mortician before being eligible for a full license.

Diggs was a licensed funeral director and embalmer in Michigan and worked for his father's funeral home, House of Diggs, before and during his 12 terms in Congress. Last February, the Michigan Board of Mortuary Science rejected Diggs' application to be relicensed in that state because of his convictions.