A QUESTION OF FINANCIAL RESPONSIBILITY

Key Facts of The Case

Gustav Holtz is an active member of his Roman Catholic parish.  He has chaired the Parish Finance Committee for the last several years and has been a close financial advisor to the Pastor, Fr. Donne who has always valued, but not always taken the advice given by Mr. Holtz. 

A tornado strikes the town causing heavy damage locally and nearly destroys the entire roof of the church while Fr. Donne is on his annual one-month vacation.  Mr. Holtz immediately contacts the insurance company only to find that Fr. Donne had decided to cancel the insurance policy just before he left for vacation. 

Mr. Holtz tries to reach Fr. Donne at the emergency phone number he left with the secretary, but finds Fr. Donne is on a wilderness camping expedition and cannot be reached for several days.  Mr. Holtz decides he cannot wait to speak with Fr. Donne as heavy rains are predicted for the coming week necessitating immediate repairs to the roof.

He calls the three best roofing contractors in the area for estimates.  The bids for the emergency repairs range from $25,000-$40,000.  Since all three are reputable contractors Mr. Holtz selects the lowest bid and authorizes the contractor to begin the work.  He promises the contractor he will be paid upon Fr. Donne’s return.  Much to the relief of Mr. Holtz, the contractor finishes the roof repairs just as the rains begin to fall. 

Fr. Donne returns from vacation to find the $25,000 bill waiting to be paid.  He is horrified by the cost and refuses to authorize payment.  The contractor contacts Mr. Holtz regarding the problem who in turn discusses the matter with Fr. Donne, explaining the reasons for his actions.  Fr. Donne claims 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 is interested only in being paid and threatens to sue both Fr. Donne and Mr. Holtz if he does not receive payment for the job within two weeks’ time. 

Questions

1. Who, if anyone, was left in charge of the parish during Fr. Donne’s planned extended absence?  Why was the identity of this person not well known at the very least in the parish office (i.e., by the secretary)?
2. Why did Mr. Holtz feel he could act on his own?  Did he misunderstand his advisory role as Chairperson of the Parish Finance Council?  Was he perhaps the one left in charge of the parish in Fr. Donne’s absence?  Or did he simply make the best decision he could in the circumstance, knowing next to nothing about Canon Law and required procedures for such situations?
3. What was Fr. Donne thinking in canceling the existing insurance policy?  Why did he do so without the Finance Committee at least being aware of his taking this action?
4. 4)Why did Fr. Donne react so immediately and extremely?  Why did he not investigate the matter and discuss it with Mr. Holtz before antagonizing the contractor by telling him he would not pay the bill?  Why is he refusing to authorize payment?
5. Does this expenditure fall into the category of extraordinary administration for this parish?
6. Was there any ill-will between Fr. Donne and Mr. Holtz before this incident occurred?

Pastoral Issues

1. To a casual observer (which would include most parishioners), Mr. Holtz would seem to have taken, in good faith, reasonable and prudent steps in contracting for and ensuring completion of repairs to the damaged roof before the coming rains worsened the situation.  He most likely saved the parish a great deal of money, yet is being treated more like a criminal than a hero by Fr. Donne.  Such shoddy treatment would be bound to disappoint and anger Mr. Holtz who is a very active and influential member of the community.  The reverberations of such seemingly unjust behavior on the part of the pastor would likely be disruptive to the well being of the parish.
2. The failure to deal fairly with the contractor would be putting the reputation of the Church in peril and opening it to possible civil litigation.

Discussion of the Case

• Fr. Donne, as pastor of the parish, clearly has responsibility for administering the goods of the parish (cc 532, 1279 §1) while his diocesan bishop has a supervisory role in this administration with the ability to intervene in cases of negligence (cc1279 §1, 1276 §1, 1276 §2).  The role of the finance council is to assist the pastor in the administration of parish assets (cc 537, 1280).  They have no administrative authority on their own. 
• All priests, including pastors, are required to take one month’s vacation annually (c 533 §2, 533 §3).  If a pastor is to be absent from his parish for more than one week, the canons provide for various ways of assigning a temporary substitute (cc 549, 539, 540 §1, 540 §2, 541 §1, 547, 546, 517 §2).  The assignment would normally go to a priest, but could go to a deacon or lay person in the event a priest could not be found.  Particular law would come into play if an examination of the canons did not supply a definitive resolution in a specific instance.  The diocesan bishop is required to establish the norms to cover such a circumstance (c 533 §3).  It is the pastor’s obligation to inform the local ordinary of his impending absence (c 533 §2) and, likely, in reality, to provide or at least recommend his own substitute. 
• There was, therefore, nothing wrong with Fr. Donne being incommunicado while on vacation.  There does, however, seem to have been a failure on Fr. Donne’s part in either providing a substitute or making his choice known for given the circumstance, the secretary would surely have informed Mr. Holtz of the substitution in lieu of having Fr. Donne bothered on vacation.  Fr. Donne’ reaction upon his return bodes against the possibility that Mr. Holtz had been appointed as Fr. Donne’s temporary replacement.
• Fr. Donne, in canceling the insurance policy has failed to administer the goods entrusted to him ‘well and faithfully’ and has broken the oath he took to do so (c 1283 1°).  Further, this action is a blatant violation of canon 1284 §2 1° which states that administrators must “exercise vigilance so that the goods entrusted to their care are in no way lost or damaged, taking out insurance policies for this purpose insofar as necessary.”  This illegitimate if not illicit act resulted in the parish being damaged.  A $500 insurance deductible payment turned into a $25,000 repair bill that could have been much worse.  Fr. Donne could be held financially responsible for this damage, for, as canon 128 indicates, “whoever illegitimately inflicts damage upon someone by a juridic act or by any other act placed with malice or negligence is obliged to repair the damage inflicted.”  Additional support for this line of thinking can be found in the spirit of canon 1289 and in Huels who states that, “if anyone with financial responsibility causes financial harm to the parish due to their neglect, they are personally liable and bound to make restitution” (356).  Fr. Donne’s extreme reaction to the situation and his continued refusal to pay the contractor could be a direct result of his understanding this possibility.
• It would appear that Mr. Holtz had no authority to act on behalf of the parish.  He had not role that would give him such administrative power.  His only ancillary position in the parish was that of Finance Committee Chairperson which is a strictly advisory role.  He therefore entered into a contract which he had no authority to make; a matter handled by civil law.
• If per chance Mr. Holtz did have some kind of administrative authority, his actions would likely be invalid because it is very possible that they fall into the category of ‘extraordinary administration.’  This can differ from parish to parish, but guidance on what might fall into this category can be found in Huels; “extraordinary administration covers acts that do not occur periodically or which by their nature are of greater importance, e.g., any purchases over a certain amount established by the bishop…construction of new buildings or extensive repairs on old buildings…” (361-62).  Extraordinary administrative acts, to be valid, require the ‘written faculty’ of the bishop (c 1281 §1).  There is no indication that Mr. Holtz had such a faculty nor had any knowledge that it was required. 
• Canon 128 does not apply in the case of Mr. Holtz for his actions were not placed with either malice or negligence.  Canon 1281 §3 would apply if he had administrative authority, but can also be used for guidance if he did not.  It states that, “unless and to the extend that it is to its own advantage, a juridic person is not bound to answer for acts invalidly placed by its administrators.  A juridic person itself, however, will answer for acts illegitimately but validly placed by its administrators, without prejudice to its right of action or recourse against the administrators who have damaged it.” 

Resolution

Mr. Holtz’s actions were decidedly to the advantage of the parish, though he clearly acted without proper authority.  He truly seems to have acted in good faith with the best interests of the parish at heart, but in total ignorance of canon law.  It is possible that both canon and civil law might hold him financially responsible for his actions, but to actually do so would be both unjust and pastorally unsound.  

I, as bishop, will quietly and temporarily remove Fr. Donne from the parish while both his administrative and pastoral actions are investigated to determine if permanent removal and/or other penal actions are warranted.  I will personally meet with Mr. Holtz as soon as he is available in an attempt to begin to heal the damage caused by Fr. Donne’s treatment of him, profusely thanking him for his efforts and tactfully letting him know the correct process for handling such a situation.  Further, I will authorized immediate payment to the contractor and will personally phone him to advise him of same while thanking him for his exemplary service and offering my apologies for any problems caused by the misunderstanding between Mr. Holtz and Fr. Donne. 

Exhibit “A”

Pertinent Canons

• Administrative Responsibility
  • 515 §3 - A legitimately erected parish possesses juridic personality by the law itself.
  • 532 – In all juridic affairs the pastor represents the parish according to the norm of law.  He is to take care that the goods of the parish are administered according to the norm of cann. 1281-1288.
  • 1279 §1 – The administration of ecclesiastical goods pertains to the one who immediately governs the person to which the goods belong unless particular law, statutes, or legitimate custom determine otherwise and without prejudice to the right of the ordinary to intervene in case of negligence by an administrator.
  • 1276 §1 – It is for the ordinary to exercise careful vigilance over the administration of all the goods which belong to public juridic persons subject to him…
  • 1276 §2 – With due regard for rights, legitimate customs, and circumstances, ordinaries are to take care of the ordering of the entire matter of the administration of ecclesiastical goods by issuing special instructions within the limits of universal and particular law.
• Finance Councils
  • 1280 – Each juridic person is to have its own finance council or at least two counselors who, according to the norm of the statutes, are to assist the administrator in fulfilling his or her function. [the law of the Church does not favor financial administration by a single individual acting alone – Beal 1481]
  • 537 – In each parish there is to be a finance council which is governed, in addition to universal law, by norms issued by the diocesan bishop and in which the Christian faithful, selected according to these same norms, are to assist the pastor in the administration of the goods of the parish, without prejudice to the prescript of can. 532.
• Pastor Vacation and Provisions For Substitution
  • 533 §2 - Unless there is a grave reason to the contrary, a pastor is permitted to be absent from the parish each year for vacation for at most one continuous or interrupted month… In order to be absent from the parish for more than a week, however, a pastor is bound to inform the local ordinary.
  • 533 §3 - It is for the diocesan bishop to establish norms which see to it that during the absence of the pastor, a priest endowed with the necessary faculties provides for the care of the parish. [The diocesan bishop is to establish norms which see to it that a priest endowed with the necessary faculties provides for the pastoral care of the parish while the pastor is absent. – Beal 705]
  • 549 – Unless the diocesan bishop has provided otherwise according to the norm of can. 533, §3 and unless a parochial administrator has been appointed, the prescripts of can. 541, §1 are to be observed when the pastor is absent.  In this case, the vicar is also bound by all the obligations of the pastor, except the obligation of applying Mass for the people. 
  • 539 – When a parish becomes vacant or when a pastor is prevented from exercising his pastoral function in the parish by reason of captivity, exile or banishment, incapacity or ill health, or some other cause, the diocesan bishop is to designate as soon as possible a parochial administrator, that is, a priest who takes the place of the pastor according to the norm of can. 540.
  • 540 §1 – A parochial administrator is bound by the same duties and possesses the same rights as a pastor unless the diocesan bishop establishes otherwise.
  • 540 §2 – A parochial administrator is not permitted to do anything which prejudices the rights of the pastor or can harm parochial goods.
  • 541 §1 – When a parish becomes vacant or a pastor has been impeded from exercising his pastoral function and before the appointment of a parochial administrator, the parochial vicar is to assume the governance of the parish temporarily.  If there are several vicars, the one who is senior in appointment or, if there are no vicars, a pastor determined by particular law assumes this governance.
  • 547 – The diocesan bishop freely appoints a parochial vicar…
  • 546 – To be appointed a parochial vicar validly, one must be in the sacred order of the presbyterate.
  • 517 §2 – If, because of a lack of priests, the diocesan bishop has decided that participation in the exercise of the pastoral care of a parish is to be entrusted to a deacon, to another person who is not a priest, or to a community of persons, he is to appoint some priest who, provided with the powers and faculties of a pastor, is to direct the pastoral care.
• Administrative Activity
  • 1282  - All clerics or lay persons who take part in the administration of ecclesiastical goods by a legitimate title are bound to fulfill their functions in the name of the Church according to the norm of law.
  • 1283 - Before administrators begin their function: 1° - they must take an oath before the ordinary or his delegate that they will administer well and faithfully;
  • 1284 §1 – All administrators are bound to fulfill their function with the diligence of a good householder.
  • 1284 §2 – Consequently they must:
    • 1° exercise vigilance so that the goods entrusted to their care are in no way lost or damaged, taking out insurance policies for this purpose insofar as necessary;
    • 3° observe the prescripts of both canon and civil law…and especially be on guard so that no damage comes to the Church from the non-observance of civil laws;
  • 1289 – Even if not bound to administration by the title of an ecclesiastical office, administrators cannot relinquishes their function on their own initiative; if the Church is harmed from an arbitrary withdrawal, moreover, they are bound to restitution.
• Invalid and Illicit Administrative Acts
  • 1281 §1 – Without prejudice to the prescripts of the statutes, administrators invalidly place acts which exceed the limits and manner of ordinary administration unless they have first obtained a written faculty from the ordinary.
  • 1281 §2 – The statues are to define the acts which exceed the limit and manner of ordinary administration; if the statues are silent in this regard, however, the diocesan bishop is competent to determine such acts for the persons subject to him, after having heard the finance council. 
  • 1281 §3 – Unless and to the extent that it is to its own advantage, a juridic person is not bound to answer for acts invalidly placed by its administrators.  A juridic person itself, however, will answer for acts illegitimately but validly placed by its administrators, without prejudice to its right of action or recourse against the administrators who have damaged it. [good paragraph p 1483]
  • 128 – Whoever illegitimately inflicts damage upon someone by a juridic act or by any other act placed with malice or negligence is obliged to repair the damage inflicted.
• Civil Law
• 1290 – The general and particular provisions which the civil law in a territory has established for contracts and their disposition are to be observed with the same effects in canon law insofar as the matters are subject to the power of governance of the Church unless the provisions are contrary to divine law or canon law provides otherwise…
• 22 – Civil laws to which the law of the Church yields are to be observed in canon law with the same effects, insofar as they are not contrary to divine law and unless canon law provides otherwise.
• Penalties For Administrative Acts
  • 1377 – A person who alienates ecclesiastical goods without the prescribed permission is to be punished with a just penalty.

Supporting Non-Canonical Data

•  “Pastors are administrators by title of office.  The members of the finance council participate in this administration although they do not have the principal responsibility for finances; thus, they are subject to this canon.  Likewise bound to this canon are any employees or even volunteers in the parish who have any kind of financial responsibility (CLSA Comm., 878).  If anyone with financial responsibility causes financial harm to the parish due to their neglect, they are personally liable and bound to make restitution” (Huels, 356).
• “Extraordinary administration covers acts that do not occur periodically or which by their nature are of greater importance, e.g., any purchases over a certain amount established by the bishop…construction of new buildings or extensive repairs on old buildings…Written permission from the Ordinary is needed for acts of extraordinary administration, namely, the diocesan bishop for diocesan owned parishes and the major superior for parishes owned by a clerical religious institute.  Without this permission, the act of administration is canonically invalid, though it may be civilly valid…The limits on acts of extraordinary administration typically are the amount above which permission is necessary for the act to be valid or licit” (Huels, 361–62).