There is a way to keep their credibility by canceling the quest, but they will lose 10 percent of the deposited money. They could also reported it and upgrade the quest by paying another 10 percent of the total rewards. Or they could just post a new quest in case of emergency, but this way, they need to deposits the rewards once again. Although, from the outlook of this village and the furious chief, it seems like they don't have the monetary power to do so. In conclusion, as an adventurer, I shouldn't get involved in this and report it to the guild.