A Question of Financial Reponsibility

Gustav Holtz is a Roman Catholic, active in his parish of St. Rose of Lima. For the last few years, he has been the Chairperson of the Parish Finance Committee and has been a close financial advisor to the pastor, Fr. John Donne, on parish matters. On occasion, Fr. Donne has chosen not to follow the advice of Mr. Holtz, but he has valued his contribution to the discussion of parish financial matters.

Fr. Donne is in the middle of his annual one-month vacation when a tornado strikes the town of Pleasantville, where St. Rose of Lima is located. There is a tremendous amount of damage to the town, and nearly the entire roof of the church is destroyed. Mr. Holtz immediately contacts the insurance agent for the parish, only to find out that Fr. Donne had decided to cancel the insurance policy just before he left for vacation.

Mr. Holtz tries to reach Fr. Donne by telephone to tell him the terrible news and discuss plans for repairing the church. When he calls the emergency number Fr. Donne left with the secretary, Mr. Holtz discovers that Fr. Donne is gone on a wilderness camping expedition and cannot be reached for several days.

While he is thinking of other alternatives, Mr. Holtz hears the weather report on the radio. Heavy rain is predicted for the coming week. He decides that the roof needs to be replaced post-haste, and calls the three best roofing contractors in the area for estimates. When he explains the emergency situation, they come immediately to view the situation and give estimates for the work. The estimates range between $25,000-40,000. Since they are all experienced and reliable contractors, Mr. Holtz selects the lowest bid, and authorizes the contractor to begin immediate replacement of the church roof. Mr. Holtz promises the contractor that he will be paid for the job as soon as Fr. Donne returns from vacation. To the great relief of Mr. Holtz, the contractor finishes the work just as the rains begin to fall in Pleasantville.

A few days later, Fr. Donne returns from vacation to find the roofer's bill for $25,000 waiting for him to pay it. Fr. Donne is horrified at the cost, and refuses to authorize the payment. The contractor, understandably upset at the possibility of not being able to collect what is due him, contacts Mr. Holtz about the problem. Mr. Holtz discusses the bill with Fr. Donne, and explains the reasons why he arranged for this emergency repair. Fr. Donne claims that Mr. Holtz did not have the authority to enter into a contract on behalf of the parish, and adamantly refuses to honor the bill. Fr. Donne argues that, since Mr. Holtz is the one who authorized the work, he also must be personally responsible for its cost. The contractor does not care who pays him for the work, but he threatens to sue both Fr. Donne and Mr. Holtz if he does not receive payment for the job within two weeks' time.

How would you resolve this dispute between Fr. Donne and Mr. Holtz? Is Fr. Donne right about Mr. Holtz not having authority to contract work on behalf of the parish? Who is financially responsible for this roofing job, the parish or Mr. Holtz?

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