It kind of reminds me of in Star Wars, when Han Solo is communicating with Greedo and they can somehow, understand each other's language.
http://www.cswap.com/1979/Rocky_II/cap/en/25fps/a/01_28
According to Google Translate, Father Carmine roughly says to Rocky in Italian:
- Who is?
- But sure. What favor? That?
It's not uncommon for someone to have an easier time understanding a language than speaking it.
Father Carmine could probably speak decent enough English, but is more comfortable in his native language of Italian. And he knew that Rocky understood enough Italian that he would know what he was saying. Whether Rocky could speak any Italian is unknown, but he probably grew around it enough that he could pick up most of what someone was saying.
Also it's not like either of them were saying anything that surprising. Even if you didn't speak either language, you could probably have a good sense of what was going in the conversation.