author: MONTEMURO, Judge:

text:
    499 A.2d 593
    OGONTZ CONTROLS COMPANY, A Corporation, Appellee, v. Frederick L. PIRKLE, Individually and T/A Controls Consulting Company, Appellant.
    Superior Court of Pennsylvania.
    Argued June 20, 1985.
    Filed Sept. 6, 1985.
    Reargument Denied Nov. 6, 1985.

      Thomas B. Kenworthy, Philadelphia,, for appellant.
    Fred T. Cadmus, III, Pottstown and Norman L. Norris, Philadelphia, for appellee.
    Before MONTEMURO, POPOVICH and WATKINS, JJ.
   MONTEMURO, Judge:

This case is before us for the second time. In the earlier appeal, we vacated the order of the trial court, which had continued a preliminary injunction against appellant (hereinafter Pirkle), because the court had denied Pirkle his right to a fair hearing pursuant to Pa.R.Civ.P. 1531(d). We then remanded the case in order to permit Pirkle the opportunity to present testimony or other evidence in his own behalf. Ogontz Controls Co. v. Pirkle, 329 Pa.Super. 8, 477 A.2d 876 (1984).

In accordance with this court’s directive, the trial court scheduled a hearing for June 21, 1984. At the hearing, appellee (hereinafter Ogontz) presented evidence consisting of the testimony of Ogontz’ president, Thomas M. Kenny, and Ogontz’ director of engineering, Nicholas J. Tallos. Pirkle’s counsel cross-examined both of these witnesses. Pirkle, however, produced no testimony or other evidence in his own behalf, informing the court that he could not properly do so until further discovery took place. Subsequently, by a letter dated July 5, 1984, Pirkle’s counsel informed the court that he intended to take no further discovery and would rely on the evidence as already presented. He also informed the court that Ogontz’ previously filed motion to reinstate the preliminary injunction was “ 'now ripe for disposition.’ ” Lower Court Opinion of May 9, 1985, at 2; Appellant’s brief, at 5. By order dated May 9, 1985, the trial court reinstated the preliminary injunction. This appeal followed.

The foregoing procedural history grew out of a complaint in equity, filed by Ogontz, alleging that Pirkle, a former Ogontz employee, had violated his employment contract and misappropriated trade secrets. Pirkle allegedly was manufacturing and selling a particular water valve, used in the railroad industry, in direct violation of his employment contract. Although Pirkle had left Ogontz’ employ prior to the filing of the complaint, Ogontz claimed that because the valve in question had been developed while Pirkle was still employed by Ogontz, Pirkle’s subsequent actions represented a violation of specific provisions of the employment contract.

The complaint sought to enjoin Pirkle from manufacturing and selling the valve, as well as to recover the total amount of sales of all valves sold by Pirkle, and other relief. A preliminary injunction was requested pending the outcome of the trial on the merits.

As his first assignment of error, Pirkle argues that the lower court lacked subject matter jurisdiction and therefore could not order the preliminary injunction. He claims the cause of action falls within the exclusive jurisdiction of the federal courts as a matter of federal patent law. We disagree.

The mere mention of a patent in a cause of action will not automatically vest the federal courts with exclusive jurisdiction. While this Commonwealth has long recognized the exclusive jurisdiction of the federal courts in civil actions arising under the patent laws, the Pennsylvania Supreme Court has held that where patent rights are only indirectly involved, “jurisdiction is properly in the courts of the Commonwealth.” Van Products Co. v. General Welding & Fabricating Co., 419 Pa. 248, 254, 213 A.2d 769, 772 (1965) (gravamen of the action was misappropriation of trade secret). Patent rights are incidental or indirectly involved when the “cause of action [is for] the breach of a contract or wrongful disregard of confidential relations,” and thus the state courts properly have jurisdiction over the matter. Becher v. Contoure Laboratories, Inc., 279 U.S. 388, 391, 49 S.Ct. 356, 357, 73 L.Ed. 752 (1929). The instant case, involving the alleged breach of an employment contract and misappropriation of trade secrets, is clearly within the jurisdiction of the court of common pleas.

Having found that the lower court had subject matter jurisdiction, and before turning to Pirkle’s other assignments of error, we note preliminarily our standard of review in appeals from the grant or denial of a preliminary injunction. Our review has been rather narrowly defined, and it is well established that an appellate court will not inquire into the merits of the controversy but will only examine the record to determine if there were any apparently reasonable grounds for the trial court’s actions. Sidco Paper Co. v. Aaron, 465 Pa. 586, 351 A.2d 250 (1976); Three County Services, Inc. v. Philadelphia Inquirer, 337 Pa.Super. 241, 486 A.2d 997 (1985). Furthermore, our supreme court has stated:

... the essential prerequisites for the issuance of a preliminary injunction are: first, that it is necessary to prevent immediate and irreparable harm which could not be compensated by damages; second, that greater injury would result by refusing it than by granting it; and third, that it properly restores the parties to their status as it existed immediately prior to the alleged wrongful conduct. Alabama Binder & Chemical Corp. v. Pennsylvania Industrial Chemical Corp., [410 Pa. 214, 189 A.2d 180 (1963) ].
Even more essential, however, is the determination that the activity sought to be restrained is actionable, and that the injunction issued is reasonably suited to abate such activity. And unless the plaintiffs right is clear and the wrong is manifest, a preliminary injunction will not generally be awarded: Keystone Guild, Inc. v. Pappas, 399 Pa. 46, 159 A.2d 681 (1960), and Herman v. Dixon, 393 Pa. 33, 141 A.2d 576 (1958).

Albee Homes, Inc. v. Caddie Homes, Inc., 417 Pa. 177, 181, 207 A.2d 768, 770 (1965).

As his next assignment of error, Pirkle argues that preliminary injunctive relief is inappropriate in this case, where the lower court granted the requested relief based upon an eleven month old record. Because no evidence has been presented since the June 21, 1984 hearing, he claims Ogontz has failed to show any injury which is imminent. However, our review of the record leads us to conclude that there are apparently reasonable grounds to support the trial court’s finding of imminent injury.

The lower court based its conclusion upon the testimony of Thomas Kenny, Ogontz’ president. At the June 21, 1984 hearing, Kenny testified that the valve developed by Pirkle was one which “answered the problem that [Ogontz] had been seeking to solve for quite a few years; and in light of that fact, they were very interested in using it.” (N.T. June 21, 1984 at 32-33). “They”, referred to by Kenny, were the railroad industry generally, and CONRAIL especially. {Id. at 31). Kenny also testified that Pirkle was luring away Ogontz’ customers, forcing the company to embark on a crash program to develop a new valve of its own, while at the same time it was trying to reassure and hold on to its present customers. In short, he testified that Pirkle’s dealings with Ogontz’ clients created a serious credibility problem for his firm. {Id. at 33-40). Furthermore, Kenny testified that if no injunction was ordered, Ogontz would be in danger of losing CONRAIL’s business, which accounted in the previous year for $564,000 in revenues, making CONRAIL by far Ogontz’ largest customer. The loss of CONRAIL’s business would also require a substantial reduction in Ogontz’ work force. (Id. at 54-56).

We believe this uncontradicted testimony allows for the reasonable inference drawn by the lower court that Pirkle’s activities constituted an ongoing threat of imminent injury to Ogontz. Cf. John G. Bryant Co. v. Sling Testing & Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977) (“It is not the initial breach of a covenant which necessarily establishes the existence of irreparable harm but rather the threat of the unbridled continuation of the violation and the resultant incalculable damage to the former employer’s business that constitute the justification for equitable intervention”). Kenny’s testimony addressed the consequences accruing to Ogontz if no injunction were to issue, but he clearly was speaking in general terms, not just as of the moment he was on the stand. In addition, the whole theory of the case, and Pirkle’s defense, is premised on whether or not Pirkle should be allowed to compete, not whether or not he would compete if an injunction did not issue. Given these circumstances, and in light of our standard of review, we shall not disturb the lower court’s conclusion on this basis.

Appellant next argues that equity may not grant injunctive relief until the disputed property rights regarding the patent ownership are first determined by trial before a jury, citing Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959). While it is not clear from Pirkle’s brief just how the federal anti-trust case applies here, it is clear that our supreme court has held that “while patent laws may be involved, if they are purely incidental and collateral to the main issue of the case ... our courts are not precluded from acting under their general equity powers.” Van Products Co. v. General Welding & Fabricating Co., supra, 419 Pa. at 254, 213 A.2d at 773. Indeed, it has long been established, for example, that an assignment of patents or patent rights may be enforced in equity, and that the enforcement may be by means of an injunction. Hepworth v. Henshall, 153 Pa. 592, 25 A. 1103 (1893); see also, Quaker State Oil Refining Co. v. Talbot, 322 Pa. 155, 158, 185 A. 586, 587-88 (1936) (“equity once having properly assumed jurisdiction should retain it to fully determine the whole controversy and do justice to all parties involved”). We find no merit to Pirkle’s claim, which is essentially supported by general phrases gathered from cases which are inapposite. We find the lower court properly exercised its equity powers when it ordered the preliminary injunction pending the outcome on the merits, and therefore find no merit to this argument.

The next assignment of error advanced by Pirkle is that the lower court incorrectly found that greater harm would be done by refusing the preliminary injunction than by granting it. He claims the injuries to Ogontz from refusing the injunction are speculative at best, while Pirkle will be devastated and put out of business by the reinstatement of the injunction.

This court has held that “a person may be enjoined from engaging in employment where that employment is likely to result in the disclosure of information, held secret by a former employer, of which the employee gained knowledge as a result of his former employment situation.” Air Products and Chemicals, Inc. v. Johnson, 296 Pa.Super. 405, 416, 422, 442 A.2d 1114, 1120 (1982) (emphasis added). In the instant case, although Kenny testified that he could not be certain of the amount of business which Pirkle would garner from Ogontz if no injunction issued, it has never been contested in the history of these proceedings that Pirkle had sold valves to CONRAIL when no injunction was in effect. Indeed, Pirkle has consistently argued that the injunction unfairly puts him out of business — the business of selling the valve he designed to CONRAIL. See Appellant’s Brief at 16. There is not here the likelihood of harm to Ogontz, but rather, by virtue of Pirkle’s own argument, the certainty of it. We do not find the evidence too speculative to support the findings of the lower court.

The argument made by Pirkle also ignores the fact that his very presence in the market as a seller of the valve allegedly developed while he was employed at Ogontz, is precisely the harm sought to be avoided by Ogontz when both Pirkle and the company entered into the employment contract. In comparison to the immediate and irreparable harm which Ogontz would suffer, Pirkle, “[a]t worst, ... will be deprived of [possible earnings], which may be compensated by damages in the event it appears at final hearing that the injunction was improvidently granted.” Alabama Binder & Chemical Corp. v. Pennsylvania Industrial Chemical Corp., 410 Pa. 214, 221, 189 A.2d 180, 184 (1968) (A case involving, inter alia, an agreement between employer and employee that all products developed by employee were the property of employer).

In many respects, this case is similar to cases in which a former employer alleges that his former employee has violated an anti-competition provision of an employment contract. See, e.g., John G. Bryant Co. v. Sling Testing & Repair, Inc., supra; Sidco Paper Company v. Aaron, supra, (and cases cited therein). In those cases, the defendant can often claim great harm, because a preliminary injunction puts him out of business or out of a job. However, preliminary injunctions have been approved in those situations due to the very nature of the agreed upon restriction, to prevent the way in which the former employee goes about making his or her livelihood after leaving the former employer. Also, in those cases, the preliminary injunctions were carefully tailored to be reasonable, often limiting the scope of the restriction. Likewise, in the instant case, Pirkle is prohibited from manufacturing and selling only the valve allegedly developed at Ogontz. He is not precluded, in any other way, from making a living. We do not agree that the lower court incorrectly balanced the relative harm in this case.

Finally, Pirkle contends that it was error on the part of the lower court not to grant his motion for recusal. Pirkle argues that Judge Leonard Sugerman’s impartiality in the proceedings below has been drawn into serious question because of “findings of facts” expressed in his opinion dated December 7, 1983.

What Pirkle neglects to explain is that the section of Judge Sugerman’s opinion to which he refers, deals with one of the essential prerequisites to the issuance of a preliminary injunction, i.e., whether the plaintiff’s right to the relief sought is clear. Albee Home, Inc. v. Caddie Homes, Inc., supra; Courier Times, Inc. v. United Feature Syndicate, Inc., 300 Pa.Super. 40, 445 A.2d 1288 (1982). The lower court properly conducted this analysis in reviewing Pirkle’s earlier contention that the preliminary injunction was improper. We do not find this proper review by Judge Sugerman, a respected and distinguished trial judge, to have constituted a showing of partiality. We are confident that Judge Sugerman will continue to ably preside impartially in this cause of action which is now some twenty-two months old.

Having found that the lower court properly reinstated the preliminary injunction, we affirm.

Order affirmed. ;

      . After his employment with Ogontz terminated, Pirkle received patents for the valve.

      . The pertinent provisions of the contract, which both parties agree applies, are as follows:

        1. EMPLOYEE agrees to perform for COMPANY such duties as may be designated by COMPANY from time to time and agrees that any and all inventions or improvements which EMPLOYEE may at any time make, individually or jointly with others, during the continuance of EMPLOYEE’S employment which shall be within the existing or contemplated scope of COMPANY’S business or which may be useful in connection with said business, shall be the exclusive property of COMPANY, and EMPLOYEE further covenants and agrees to make full and prompt written disclosure to COMPANY of any and all such improvements and to execute and acknowledge, at the request and expense of COMPANY, any and all papers whatsoever necessary and proper for the applying and securing and assigning to COMPANY any and all Letters Patent for said inventions or improvements in the United States and foreign countries and for vesting full title to said inventions and Letters Patent to COMPANY.
      2. EMPLOYEE agrees to receive in confidence all information with reference to the work of COMPANY which is of technical, confidential or secret nature, other than routine mechanical skills, and will aid and assist COMPANY to maintain the secrecy of the same, and EMPLOYEE further agrees that he will not, as long as said employment shall continue not at any time thereafter, divulge or disclose to others, or make any use of, except for COMPANY, and such information which EMPLOYEE may gain in or by reason of said employment with respect to any product, process, device, machine or apparatus considered, made, used, installed, experimented upon or developed by or for COMPANY.

      . In response to questioning by the court, Kenny stated that Ogontz’ crash program had produced a product equivalent to Pirkle’s, and that Ogontz had applied for a patent on its new valve. Asked why he thought CONRAIL would choose Pirkle over Ogontz, Kenny explained it was his belief, based on his understanding of the industry, that Pirkle was considered something of a technical wunderkind because of his early appearance in the market with the much desired valve. He admitted he could not be certain of the outcome of the competition between Pirkle and Ogontz for CONRAIL business. (N.T. June 21, 1984, at 66-68).

      . Although the “irreparableness” of harm is not directly at issue in this appeal, we note that Ogontz, in its complaint and motion for preliminary injunction, alleged and sought nonmonetary as well as monetary damages. See Three County Services, Inc. v. Philadelphia Inquirer, 337 Pa.Super. 241, 249 n. 1, 486 A.2d 997, 1001 n. 1 (1985). Ogontz also alleged damages which are not fully compensable.

      . This opinion was written by Judge Sugerman in response to Pirkle’s first appeal to this court.


source: Caselaw Access Project

author: BROSKY, Judge: SPAETH, President Judge, MONTEMURO, Judge,

license: Public Domain

text:
    499 A.2d 598
    COMMONWEALTH of Pennsylvania v. Richard W. STOCKARD, Appellant.
    Superior Court of Pennsylvania.
    Argued Feb. 24, 1983.
    Filed Sept. 27, 1985.

      John Hooper, III, Pittsburgh, for appellant.
    David A. Hepting, Assistant District Attorney, Butler, for Com., appellee.
    Before SPAETH, BROSKY and MONTEMURO, JJ.
   BROSKY, Judge:

This appeal is from the dismissal of a Post Conviction Hearing Act (PCHA) petition. Appellant was convicted of theft by failure to make required disposition of funds received and for violating § l-401(b) of the Pennsylvania Securities Act. Appellant raises all of his issues in terms of the ineffectiveness of prior counsel. Three issues relate to the charge to the jury, three relate to the sentencing, one relates to his reliance upon counsel’s advice and one relates to a conflict of interest on the part of an Assistant District Attorney.

Appellant sold stock in a restaurant venture and then used almost all of the proceeds to pay off unrelated personal debts. Following his conviction, a direct appeal was brought and judgment of sentence affirmed by the Supreme Court. Commonwealth v. Stockard, 489 Pa. 209, 413 A.2d 1088 (1980). A PCHA petition was then filed and a hearing held. This appeal is from the dismissal of that petition.

I.

Among appellant’s arguments are that the trial court erred in its charge to the jury by not explaining the meaning of the term “material” as used in the Securities Act. This issue was not raised in the PCHA petition in this form and it is possible, therefore, that it is waived for purposes of our appellate review at this time. Commonwealth v. Pettus, 492 Pa. 558, 424 A.2d 1332 (1980). A broader, less specific issue was raised in the PCHA petition; and, consequently, may encompass this issue. We need not, however, decide this waiver issue, as appellant is herein being granted a new trial on other grounds.

Appellant also argues that it was error not to include in the charge to the jury that the interests of the prosecution witnesses may be taken into consideration by the jury in evaluating the credibility of their testimony. This was also not in the PCHA petition and is also waived.

A third issue is similarly waived through its absence in the PCHA petition. Appellant challenges the sentencing as it was allegedly undertaken without the use of a pre-sentence report. Sentencing errors such as the one alleged to have occurred here do not go to the illegality of the sentence imposed and can therefore be waived. Commonwealth v. Ellison, 293 Pa.Super. 329, 439 A.2d 136 (1981).

II.

Appellant argues that the trial court erred in not specifying the state of mind necessary to convict under the Securities Act. The PCHA court held that this issue was waived. We find that this issue was, to the contrary, presented in the PCHA petition in a form in which it should have been treated on its merits.

The PCHA court did not explain why it held that this and several other issues were waived. We note that no objections were made to the charge at trial nor did the post-verdict motions raise any charge-related issues. Consequently, on direct appeal this Court declined to address charge-related issues. Commonwealth v. Stoc/card, Superior Court Memorandum Opinion, No. 689 Pittsburgh, 1977, filed 3/16/79. This would normally constitute a waiver of all charge-related issues. However, in his PCHA petition appellant did plead the extraordinary circumstance of ineffective assistance of counsel. Moreover, his pleading of that ineffectiveness was faultless. He argued that appellate counsel was ineffective in not raising the ineffectiveness of trial counsel in not raising this issue. See Commonwealth v. Brown, 313 Pa.Super. 256 at 259, 459 A.2d 837 at 839 (1983) (Concurring Opinion by Brosky, J.). This issue was, therefore, properly before the PCHA court and is properly before us.

It remains for us to determine whether or not appellate counsel was ineffective in not raising the ineffectiveness of trial counsel in not objecting to the absence of a charge regarding the willful violation of the Securities statute.

The crime for which appellant was convicted reads:

Sales and purchases It is unlawful for any person, in connection with the offer, sale or purchase of any security in this State, directly or indirectly: ... (b) ... to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading .. ,

70 P.S. § 1-401.

As appellee notes, this statute does not include any mention of willful behavior. However, the section of the Securities Act which provides for criminal penalties does.

Criminal penalties
Any person who wilfully violates any material provision of this act, except section 407(a) for any rule under this act, or any order of which he has notice, or who violates section 407(a) knowing that the statement made was false or misleading in any material respect, may be fined not more than five thousand dollars ($5,000) or imprisoned not more than five years, or both.

70 P.S. § 1-511.

The mental state of willfulness is statutorily defined.
Requirement of willfulness satisfied by acting knowingly. —A requirement that an offense be committed willfully is satisfied if a person acts knowingly with respect to the material elements of the offense, unless a purpose to impose further requirements appears.

18 Pa.C.S.A. § 302(g).

“Knowingly” is in turn defined.
(2) A person acts knowingly with respect to a material element of an offense when:
(i) if the element involves the nature of his conduct or the attendant circumstances, he is aware that his conduct is of that nature or that such circumstances exist

18 Pa.C.S.A. § 302(b)(2)(i).

Thus, a proper charge would have included the requirement that appellant was aware that he was omitting “to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.” That awareness must not merely go to the fact that he was omitting to make a statement but must also go to the nature of the statement he was omitting. The former without the latter is meaningless.

This is a significant requirement. Without it, one could be convicted of having violated the statute with a lesser degree of culpability — recklessness. 18 Pa.C.S.A. § 302(c). Under an identically worded statute, the Washington Supreme Court noted:

The instructions do not leave the impression that mere suspicious circumstances, use of high pressure tactics or the fact that the defendants might have known the facts indicating the falsity of the representation would be sufficient circumstantial evidence to warrant a conviction.

State v. Hynds, 84 Wash.2d 657, 529 P.2d 829 at 834 (1974).

A Kentucky case, also reviewing an identically worded statute, held that it was error to have omitted the willful element from the charge. Queen v. Commonwealth, 434 S.W.2d 318 at 323 Ky., (1968). See also Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976).

While none of these three non-Pennsylvania cases govern our interpretation of the state statute before us, it is at least marginally desirable that the same statute be given the same interpretation in different states. More importantly, we find them persuasive. In any event, a plain reading of the relevant Pennsylvania statutes leads inescapably to this conclusion: a proper charge to the jury should have included the willful element.

Normally, the next point in our disposition of this issue would be whether trial counsel had “some reasonable basis designed to effectuate his client’s interests” in not objecting to the faulty charge — and whether appellate counsel had “some reasonable basis” in not raising trial counsel’s ineffectiveness in this regard. Commonwealth ex rel. Wash ington v. Maroney, 427 Pa. 599 at 604-5, 235 A.2d 349 at 352 (1967).

Since there was no PCHA hearing on the subject, it would also normally be the next step to remand for a hearing on this question. However, in this case, we will not do so.

We hold, as a matter of law, that there could be no “reasonable basis” for trial and appellate counsel’s failure to act with regard to this issue. The inclusion of the higher degree of intent — willfulness—could not have had any but a salutory effect for the appellant. Therefore, we vacate judgment of sentence and remand for a new trial.

III.

Another issue raised by appellant relates to the charge given to the jury. He argues that the trial court erred in not stating that each of the elements of each count of the Securities Act crime must be proven beyond a reasonable doubt.

The disposition of this issue is governed by the Pennsylvania Supreme Court case of Commonwealth v. Bishop, 472 Pa. 485 at 490-1, 372 A.2d 794 at 796 (1977).

Nowhere, however, in the entire charge did the court explain that the presence of each of the elements of the conduct charged must be proven by the Commonwealth beyond a reasonable doubt____ The defense had an absolute right to have the jury instructed not only as to the quantum of proof required to establish guilt, but also that the requirement extended to each of the material elements of the offense. The function of elucidating the relevant legal principles belongs to the Judge, and the failure to fulfill this function deprives the defendant of a fair trial. (Citation omitted) It is entirely possible that, as a result of the charge, as it was given, the jury concluded that the Commonwealth might meet its ,burden if the cumulative evidence of guilt was such that they were convinced beyond a reasonable doubt although they were not convinced beyond a reasonable doubt as to one or more of the elements of the offense. This is not the correct standard and differs significantly from the requirement that each and each element of the crime meet this same measure of substantiation. (Emphasis in original.)

We conclude that the trial court erred in not having charged that every element of the Securities Act violation had to be proved beyond a reasonable doubt. The PCHA court erroneously considered this issue to have been waived and therefore no evidentiary hearing was held on this issue.

But, at this juncture, it is not, strictly speaking, the trial court’s error which is before us; rather it is appellate counsel’s ineffectiveness in not objecting to the faulty charge. We find, as a matter of law, that there could be no reasonable basis for counsel’s failure to act and thus, notwithstanding the absence of a hearing on this matter, we hold that counsel was ineffective in this regard.

IV.

The next issue is an alleged sentencing error. Appellant argues that his sentence was improperly imposed in that the sentencing court did not state its reasons for the sentence imposed on the record at the time of sentencing. We agree.

The only comments made by the sentencing court other than the imposition of sentence are:

Very sorry, Mr. Stockard. You deceived these people. You deceived the Pennsylvania Securities Commission. This in no way complies with the requirements laid down

in Commonwealth v. Riggins, 474 Pa. 115 at 134-5, 377 A.2d 140 at 149-50 (1977).

The Legislature, in recognizing the need for sentencing guidelines, has enacted the Sentencing Code. Section 1321(a) of the Code provides for five possible dispositions —probations, guilt without further penalty, partial confinement, total confinement, and a fine. The Legislature has adopted the following basic policy to guide the trial court in imposing sentence: “[T]he sentence imposed should call for the minimum amount of confinement that is consistent with the protection of the public, the gravity of the offense, and the rehabilitative need of the defendant.” The Legislature has also enumerated specific factors which the trial court should consider in determining which of the five possible dispositions is appropriate for a particular defendant. These factors provide the sentencing court with guidelines for the articulation of the reasons for its sentencing decision. Absent a statement of reason, the record will not reveal whether the legislatively mandated factors have been considered, (footnotes omitted)

Riggins had not been filed at the time of sentencing herein. However, in Commonwealth v. Kostka, 475 Pa. 85, 379 A.2d 884 (1977), the Supreme Court of this Commonwealth made the requirements of Riggins retroactive. There was, therefore, error in the sentencing.

As such, that issue has been waived. It is before us only in terms of the ineffectiveness of counsel. In this instance, there is no need for us to remand for an evidentiary hearing. As a matter of law, neither trial nor appellate counsel could have had a rational basis for failing to raise this issue. Commonwealth v. Terrell, 276 Pa.Super. 136 at 141, 419 A.2d 133 at 135 (1980); Commonwealth v. Gaito, 277 Pa.Super. 404 at 412, 419 A.2d 1208 at 1213 (1980).

As we have already vacated judgment of sentence and remanded for a new trial, it is doubly unnecessary for us to remand for an evidentiary hearing. Once again, we reach this issue only for the guidance of the court below after retrial.

v.

Even if it were not moot, in light of the paucity of facts supporting appellant’s sentence, we could not rule on appellant’s claim that the sentence imposed was excessive. Commonwealth v. Cruz, 291 Pa.Super. 486 at 490, n.3, 436 A.2d 220 at 222, n.3 (1981).

VI.

Appellant next argues that appellate counsel was ineffective in not raising the ineffectiveness of trial counsel in not calling as a witness Mr. Hawk. In an affidavit submitted to the PCHA Court, appellant alleged that he had relied upon Mr. Hawk’s advice as his counsel in committing the acts for which he was convicted. He states further that trial counsel declined to call Mr. Hawk on the ground that Mr. Hawk was a member of the District Attorney’s Office.

First, ineffective assistance of counsel can be established through the failure to call a witness about which counsel had been informed, absent investigation or adequate explanation. Commonwealth v. Williams, 274 Pa. Super. 464, 418 A.2d 499 (1980).

Second, we find utterly without merit trial counsel’s purported explanation that he could not call Mr. Hawk as a witness because he was a member of the District Attorney’s staff. His employment by the District Attorney would not have conferred upon Mr. Hawk any immunity from his duty as a citizen to testify in a criminal case.

Thus, if established factually and not justified in some way, this issue could establish ineffective assistance and mandate a new trial. While this argument is legally sound, we are unable once again to rule on the factual applicability of this argument to the case before us. This is the result of no evidentiary hearing having been held on this matter before the PCHA Court.

However, since a new trial has been granted on other grounds, it is unnecessary for us to remand for an evidentiary hearing on this issue.

VII.

Appellant’s last argument is that appellate counsel was ineffective in not objecting to Mr. Hawk having argued for the prosecution in the appeal of this case before the Supreme Court.

Mr. Hawk was allegedly appellant’s counsel in the business transactions which formed the basis for the convictions before us. According to appellant, he had followed Mr. Hawk’s advice in committing the acts for which he was prosecuted.

The PCHA Court, without benefit of an evidentiary hearing on this issue, found against appellant stating: “The Court can see no prejudice to the defendant by Mr. Hawk’s argument from the record before the Supreme Court.”

The problem with this conclusion is that the PCHA Court arrived at it without the benefit of an evidentiary hearing. We fail to comprehend how that Court could assume the resolution of this issue without any evidence before it. We understand that appellate cases are to be argued only on the basis of the pre-existing record and that the record was closed prior to Mr. Hawk’s appearance before the Supreme Court. On the other hand, we are also acutely conscious of potential improprieties.

The possibility certainly exists of an impermissible use of information which Mr. Hawk was privy to as appellant’s counsel. Indeed, this may have occurred without any awareness of it on Mr. Hawk’s part. In order to prevent such a forbidden flow of information, Mr. Hawk would have had to consciously separate everything that he knew about the case into two categories: that obtained solely as a result of having been appellant’s counsel and that obtained as a member of the prosecution on appeal. Then, he would have had to use only the latter category in his participation on appeal. The difficulty of the successful performance of these mental gymnastics indicates that the issue merited an evidentiary hearing.

While it is not necessary for us to address this issue on its merits, we are moved to comment on Mr. Hawk’s alleged behavior in arguing for the prosecution after serving as appellant’s counsel in the transactions for which he was convicted. If appellant’s allegations as to Mr. Hawk’s consecutive involvement are true, they portray a most unfortunate situation. If true, these actions would demonstrate a serious lack of good judgment and a reprehensible violation of professional ethics.

This would be our observation even if no misuse of privileged information occurred — if the consecutive representation occurred as appellant alleges. The Code of Professional Responsibility states that:

Every lawyer owes a solemn duty to uphold the integrity and honor of his profession; ... and to strive to avoid not only professional impropriety but also the appearance of impropriety.

Code of Professional Responsibility, Canon 9, Ethical Consideration 9-6.

It would be hard to conceive of a situation more repugnant to our national sense of decency and fair play than a lawyer who had served as a legal advisor to a client in a matter later arguing for the prosecution in a case arising out of that same matter.

Judgment of sentence is vacated and the case is remanded for a new trial.

SPAETH, President Judge, files a concurring opinion.

MONTEMURO, J., files a concurring statement.

SPAETH, President Judge,

concurring:

I agree that we should remand for a new trial and I write separately only to respond to the question, raised but not answered by the majority, whether the claim that counsel was ineffective in failing to object when the trial court did not define the term “material” in its charge has been waived.

The majority states, see its at p. 600 that it need not decide whether appellant has waived the right (1) to challenge trial counsel’s effectiveness in failing to object that the charge to the jury did not include a definition of the term “material” as contained in the Pennsylvania Securities Act of 1972, 70 P.S. § l-401(b), and (2) to challenge appellate counsel’s failure to raise this issue on direct appeal. I find no waiver. Appellant’s petition for relief under the Post-Conviction Hearing Act, 42 Pa.C.S.A. § 9541 et seq., alleges that trial and appellate counsel were ineffective in failing to object to the trial court’s failure “to instruct the jury on the essential elements of the Securities Act violations, including but not limited to the requirement that the Defendant must have had a specific intent to defraud the shareholders, in order to convict.” PCHA Petition at ¶ 8(i). See id. at íííí's 8(o) & (r). Section 401(b) of the Securities Act provides:

It is unlawful for any person, in connection with the offer, sale or purchase of any security in this State, directly or indirectly:
(b) To make any untrue statement of a material fact or to omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they are made, not misleading.
70 P.S. § l-401(b).

Section 511 of the Act makes a willful violation of any material provision of the Act subject to criminal penalties. Thus, an essential element of the offense appellant was charged with committing is the “making [of] an[] untrue statement of a material fact or [the] omi[ssion of] a material fact.” 70 P.S. § l-401(b). The trial court should therefore have instructed the jury that without proof beyond a reasonable doubt that appellant had misstated or omitted to state a “material fact,” he could not be convicted of violating the Act. By alleging in his petition for post-conviction relief that trial and appellate counsel were ineffective in failing to object to the trial court’s failure “to instruct the jury on the essential elements of the Securities Act violations,” appellant preserved the argument he now makes. Since I can imagine no reasonable basis for counsels’ failure to object, I should hold counsel ineffective, and remand for a new trial on that basis alone, i.e., even if there were no other basis.

The Pennsylvania Securities Act does not define “material fact,” and case law under the Act to date has not developed a definition, but it is clear that in the context of a transaction in securities, “material fact” has a specialized meaning. The Second Circuit has defined “material fact” as follows:

As we said in List v. Fashion Park, Inc., 340 F.2d 457, 462 (2nd Cir.1965), “The basic test of materiality ... is whether a reasonable man would attach importance ... in determining his choice of action in the transaction in question. Restatement, Torts § 538(2)(a); accord Prosser, Torts 554-55; I Harper & James, Torts, 565-66.” (Emphasis supplied.) This, of course, encompasses any fact “... which in reasonable and objective contemplation might affect the value of the corporation’s stock or securities____” List v. Fashion Park, Inc., supra at 462, quoting from Kohler v. Kohler Co., 319 F.2d 634, 642, 7 A.L.R.3d 486 (7 Cir.1963). (Emphasis supplied.) Securities and Exchange Commission v. Texas Gulf Sulphur Co., 401 F.2d 833, 849 (2d Cir.1968), cert, denied sub. nom. Coates v. Securities and Exchange Commission, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969).

See also Affiliated Ute Citizens v. United States, 406 U.S. 128, 153-54, 92 S.Ct. 1456, 1472, 31 L.Ed.2d 741 (1972) (“All that is necessary is that the facts withheld be material in the sense that a reasonable investor might have considered them important in the making of this decision.”) I should therefore hold that at appellant’s new trial the trial court should instruct the jury that “the Commonwealth must prove beyond a reasonable doubt that appellant failed to disclose a fact to which a reasonable man would attach importance in determining his choice of action in the transaction in question, and this includes any fact that in reasonable and objective contemplation might affect the value of the corporation’s stock.” See Securities and Exchange Commission v. Texas Gulf Sulphur Co., supra.

MONTEMURO, Judge,

concurring:

I agree with the majority that we should remand for a new trial. While the majority decided not to reach the issue of waiver regarding the claim of ineffectiveness of counsel in failing to object when the trial court did not define the term “material” as used in the Securities Act, had that issue been reached, I would agree with the analysis of “materiality” put forth by President Judge Spaeth in his concurring opinion.

      . Contrary to the assertion made in the concurrence, we are not holding here that this issue was waived. Rather, as stated above, we are merely noting that we need not decide the waiver issue. We add, for purposes of re-trial, however, that if we were to treat this issue on its merits we would find it to be meritorious.
      Appellant also contends that the charge on the Theft by Failure to Make Required Disposition of Funds Received was deficient. We find his argument on this issue to be without merit.

      . Included in the charge was a similar reference to considering appellant’s interest in the outcome of the case in appraising his credibility as a witness.

      . The PCHA petition only included an item objecting to the reference about appellant’s interest and credibility. That is not raised on appeal.

      . No charge-related issues were brought before the Supreme Court on direct appeal.

      . The consequences of the PCHA court not having considered this issue will be examined infra.

      . Here it was the prosecution theory that appellant omitted to state the material fact that the proceeds of the sale of the securities were to be used to pay his non-corporate debts.

      . This issue is also properly phrased in terms of the ineffectiveness of appellate counsel in not raising the ineffectiveness of trial counsel in not objecting to this omission.

      . Again, this issue was properly pleaded in terms of ineffectiveness of prior counsel.

      . The PCHA court also erroneously found this issue to be waived.

      . While not making a decision on this issue, some comments are in order. Considering that this was appellant’s first criminal conviction and considering the non-violent nature of the crimes involved, it would appear that the sentence imposed — five to ten years — was excessive. Other factors, unknown to us, may, nonetheless, justify this sentence. We reemphasize that this is not our holding, merely an observation based on what limited facts are before us. Any appellate decision on the issue of excessiveness must await retrial, conviction, resentencing and appeal therefrom.

      . An allied allegation of ineffectiveness was that trial counsel erred in not raising the issue of reliance upon advice of counsel. The PCHA Court's opinion correctly notes in this regard that trial counsel did argue such reliance to the jury. This particular claim is, therefore, without merit as a factual matter.

      . The PCHA Court did not treat this claim in its opinion.

      . It is not apparent from the record before us whether Mr. Hawk also wrote the prosecution’s brief for the Supreme Court appeal.

      . Section 511 provides:
      Any person who wilfully violates any material provision of this act, except section 407(a) for any rule under this act, or any order of which he has notice, or who violates section 407(a) knowing that the statement made was false or misleading in any material respect, may be fined not more than five thousand dollars ($5,000) or imprisoned not more than five years, or both. Each of the acts specified shall constitute a separate offense and a prosecution or conviction for any one of such offenses shall not bar prosecution or conviction for any other offense. No indictment or information may be returned under this act more than five years after the alleged violation.
      70 P.S. § 1-511.