1. Do you think the Church or the mortgage holders should pay?

2. What specific conduct does the court point to as constituting the ratification?

The First Parish Unitarian Church of East Bridgewater hired Rich as its minister. At this time a Church Committee ran the church. As Rich’s role in the Church expanded, he began to perform many of the duties of the Committee. The Church also expanded, from 12 families to more than 400. After about 10 years the Committee stopped meeting. Rich then ventured into real estate and other unrelated business ventures. To finance these, he gave mortgages on the church property which he, but not the Church Committee, executed. When the businesses he established failed, the creditor sought to foreclose on the mortgages. Church members claimed the mortgages were invalid because the Committee did not authorize them. The lower court found for the mortgage holders and the Church appealed. The Committee claims that it did not know of the existence of the mortgages. Thus its failure to repudiate the mortgages resulted not from a ratification of the transactions but from ignorance of essential facts. Generally, in order to establish ratification of unauthorized acts of an agent, a principal must have “knowledge of all material facts . . .” However, a qualification to this rule is that one cannot “purposefully shut his eyes to means of information within his own possession and control.” This is especially true of the Committee that functioned as the “business center” of the Church and had a duty to keep itself informed of Church business. Further, the Committee was not totally ignorant of Rich’s actions. From the many indications of the radical physical and structural changes to the Church and surroundings, it should have been obvious to the Church that “something was afoot.” The very nature of the construction and renovation indicated that large expenditures were being made. Although Rich was far from candid in his disclosures, he did inform Church members of various projects at Church events through annual reports and publications. We conclude that the Committee’s knowledge of substantial and costly physical changes at the Church should have provoked an investigation by the Committee which would have led to the discovery of the mortgages. In these circumstances, the Committee’s failure to act “will be deemed to constitute actual knowledge.” By failing to disavow the mortgages, the Church ratified the transactions, a ratification that may be inferred without a vote by the Committee. The mortgages are valid. The decision of the lower court is affirmed.