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Ruling:In regard to adjudicating between two litigants and ruling on questions of ritual matters, the matter certainly has nothing to do with appointments. The only requirement is that a recognized rabbi bestowed upon him permission to deal with those matters and that he is fit to do so. This is based on Piskei Maharay (126-128), which says that even if there is a great scholar who was chosen to be the rabbi of the city, this does not prevent someone else from making rulings. The rationale is "let the Torah be great and adorned" and "the jealousy among scholars increases wisdom." In the case where the second rabbi is just a temporary visitor, the former reason does not apply, and the Maharik (169) says that he cannot rule on ritual matters. However, he can adjudicate monetary matters, as maybe he is more acceptable in the eyes of the litigants, and the Maharik says that he can also be a mesader kiddushin, as the chatan has the right to choose his "agent" for the berachot (see also Rama, Yoreh Deah 245). The matter is only if the rabbi is qualified to carry out the tasks. It is even more obviously permitted for a talmid chacham who is in a place where there is no official rabbi.
The importance of appointment as the community’s rabbi is regarding communal matters, especially monetary ones that affect the constituency, such as taxes, charity funds, sifrei Torah, shuls, and public bath houses. Fundamentally, the city’s dayanim should have been unfit to rule on these matters because of their interests in them, but it has legitimately become customary to allow it (see Shulchan Aruch, Choshen Mishpat 7:12). It is best if the rabbi is excluded from all responsibilities in these regards and is paid from the joint communal fund, in which case he is not impacted by these decisions. Another talmid chacham in the community, who has not been chosen and is likely to have financial connections to people, is unfit to have a hand in the decision-making process without special permission.
What is more problematic is the lesser titles of "Moreinu" and "Chaver." They do not have a source in the gemara; it is just an Ashkenazi minhag from the time of the Maharil and the Mahari Weil. My rebbe told me that there was a cherem to not allow these titles to be used without the local rabbi’s permission. The Mahari Weil even said that only a community rabbi with 10 full-time students may bestow those titles. Apparently, there was a concern that unqualified people will get involved in gittin and kiddushin.
However, our problems apparently help us. There used to be great care in giving out these titles only to very learned people. It has now become popular to give these titles to unlearned wealthy people who help support talmidei chachamim and their families. There are indeed sources that such people deserve honor. In any case, these titles no longer cause people to rely on their holders’ scholarship. Therefore any community rabbi or beit din can grant them, just that a total farce should not be made of the matter. I will not go into more detail on such issues, which do not have Talmudic sources.
P'ninat Mishpat (832)
Various Rabbis
359 - Bribery in Rabbinate Election
360 - Rabbinic Functions Without Being Appointed
361 - Passively Taking from Another’s Franchise
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P'ninat Mishpat P'ninat Mishpat: To Whom Do the Payments Go? – part I
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P'ninat Mishpat P'ninat Mishpat: Agricultural Water Rights – part I
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