G.R. No. L-71557 - NOVEMBER 1988 - PHILIPPINE JURISPRUDENCE CASE NUMBERCASE TITLE G.R. No. L-71557November 29, 1988Pablo S. Cruz vs. Commission on Audit G.R. No. L-72006November 29, 1988Florencio Reyes, Jr. vs. Leonardo M. Rivera G.R. No. L-73421November 29, 1988Group Developers vs. Lumen Policarpio G.R. No. L-75042November 29, 1988Republic of the Philippines vs. Intermediate Appellate Court G.R. No. L-77040November 29, 1988Alejandro Magtibay vs. Court of Appeals, et al, G.R. No. L-77395November 29, 1988Belyca Corporation vs. Pura Ferrer Calleja, et al, G.R. No. L-77541November 29, 1988Gregorio Tengco vs. Jose and Victoria Aliwalas G.R. No. L-78012November 29, 1988Delta Motors Corporation vs. Court of Appeals G.R. No. L-79552November 29, 1988Evelyn J. Sangrador vs. Francisco Valderrama G.R. No. L-34548November 29, 1988Rizal Commercial Banking Corporation vs. Pacifico P. De Castro G.R. No. L-46048November 29, 1988Republic of the Philippines vs. Court of Appeals G.R. No. L-46612November 29, 1988Silverio Godoy, et al. vs. Nino T. Ramirez, et al. G.R. No. L-48457November 29, 1988Perla Hernandez vs. Hon. Pedro C. Quitain., et al, G.R. No. L-55233November 29, 1988Crispulo Garol vs. Employees' Compensation Commission G.R. No. L-67229November 29, 1988Marcelino Mejia vs. Intermediate Appellate Court G.R. No. L-69870November 29, 1988National Service Corporation vs. National Labor Relations Commission G.R. No. L-74049November 29, 1988Macario Q. Falcon vs. Itermediate Appellate Court G.R. No. L-77227November 29, 1988Commander Realty, Inc. vs. Court of Appeals G.R. No. L-80382November 29, 1988Dionisia Antallan vs. Government Service Insurance System G.R. No. L-80838November 29, 1988Eleuterio C. Perez vs. Court of Appeals G.R. No. L-79677November 28, 1988People of the Philippines vs. Victor Mejias G.R. No. L-41014November 28, 1988Pacific Banking Corporation, vs. Court of Appeals G.R. No. L-59981November 28, 1988Salvador Sapugay vs. Natividad Capus Bobis, et al. G.R. No. L-69970November 28, 1988Felix Danguilan vs. Intermediate Appellate Court A.M. No. R-89-PNovember 24, 1988Dominga S. Cunanan vs. Jose L. Cruz. G.R. No. L-75755November 24, 1988Atlas Consolidated Mining & Development Corporation vs. National Labor Relations Commission, et al. G.R. No. L-76835November 24, 1988Luis M. Fuentes vs. National Labor Relations Commission, et al. G.R. No. L-77976November 24, 1988Maximo Gabrito, et al. vs. Court of Appeals G.R. Nos. L-82405-06November 24, 1988Banque Del' Indochine Et De Suez, et al. vs. Ramon Am. Torres, et al. G.R. No. L-84610November 24, 1988Medco Industrial Corporation, et al. vs. Court of Appeals, et al. G.R. No. L-34116November 24, 1988National Waterworks & Sewerage Authority vs. NWSA Consolidated Union G.R. No. L-36788November 24, 1988People of the Philippines vs. Sotero Luardo, et al. G.R. No. L-38884November 24, 1988Severino Mateo vs. Andres Plan, et al. G.R. No. L-45266November 24, 1988People of the Philippines vs. Leopoldo Pardilla, et al. G.R. No. L-46078November 24, 1988Romeo N. Portugal, et al. vs. Rodrigo R. Reantaso, et al. G.R. No. L-55960November 24, 1988Yao Kee, et al. vs. Aida Sy Gonzales, et al. G.R. No. L-69550November 24, 1988Maria Luisa O. Cojuangco, et al. vs. Manuel V. Romillo, Jr. et al. G.R. No. L-78061November 24, 1988Litton Mills Employees Association vs. Pura Ferrer Calleja G.R. Nos. L-82282-83November 24, 1988Antonio M. Garcia, Dynetics, Inc. vs. Court of Appeals, et al. G.R. No. L-75364November 23, 1988Antonio Layug vs. Intermediate Appellate Court, et al. G.R. No. L-76290November 23, 1988Mamita Pardo De Tavera vs. Bonifacio A. Cacdac, Jr. G.R. No. L-77968November 23, 1988People of the Philippines vs. Demetrio Maravilla, Jr. G.R. No. L-31440November 23, 1988People of the Philippines vs. Alfredo Bandoquillo G.R. No. L-37048November 23, 1988Nicolas Laurente vs. Court of Appeals, et al. G.R. No. L-47726November 23, 1988Pan Realty Corporation vs. Court of Appeals, et al. G.R. No. L-48302November 23, 1988Arturo Del Pozo, et al. vs. Alfonso Penaco G.R. No. L-51996November 23, 1988Western Minolco Corporation vs. Court of Appeals, et al. G.R. No. L-61375November 23, 1988Trinidad S. Estonina vs. Southern Marketing Corporation, et al. G.R. No. L-65037November 23, 1988Cresencio M. Rocamora, et al. vs. Rtc, et al. G.R. Nos. L-78359-60November 23, 1988People of the Philippines vs. Desiderio G. Aliocod, et al. G.R. Nos. L-57005-07November 23, 1988Imperial Vegetable Workers Union, et al. vs. Benjamin A. Vega, et al. G.R. No. L-71110November 22, 1988Paz Villagonzalo, et al. vs. Intermediate Appellate Court, et al. G.R. No. L-77860November 22, 1988Boman Environmental Development Corporation vs. Court of Appeals, et al. G.R. No. L-47045November 22, 1988Nobio Sardane vs. Court of Appeals, et al. G.R. No. L-78794November 21, 1988People of the Philippines vs. Felipe Elizaga G.R. No. L-68857November 21, 1988People of the Philippines vs. Anacleto M. Montejo G.R. No. L-76974November 18, 1988Benito Lim vs. Rodolfo D. Rodrigo, et al. G.R. No. L-32242November 18, 1988People of the Philippines vs. Rodolfo T. Carido G.R. No. L-64656November 18, 1988People of the Philippines vs. Benito Ramos G.R. No. L-74834November 17, 1988Insular Bank of Asia vs. Intermediate Appellate Court, et al. G.R. No. L-74324November 17, 1988People of the Philippines vs. Fernando B. Pugay, et al. G.R. No. L-73828November 14, 1988Benjamin S. Aprieto, et al. vs. Intermediate Appellate Court G.R. No. L-73998November 14, 1988Pedro T. Layugan vs. Intermediate Appellate Court, et al. G.R. No. L-78848November 14, 1988Sherman Shafer vs. Regional Trial Court of Olongapo City, et al. G.R. No. L-82585November 14, 1988Maximo V. Soliven vs. Ramon P. Makasiar G.R. No. L-29420November 14, 1988Felix De Villa vs. Jose Jacob G.R. No. L-33084November 14, 1988Rose Packing Company, Inc vs. Court of Appeals G.R. No. L-39807November 14, 1988Heirs of E. B. Roxas, Inc., et al. vs. Macario Tolentino, et al. G.R. No. L-46474November 14, 1988Concordia M. De Leon vs. Employees' Compensation Commission, et al. G.R. Nos. 74387-90November 14, 1988Batangas Laguna Tayabas Bus Company, et al. vs. Intermediate Appellate Court, et al. G.R. Nos. L-38907-09November 14, 1988Nerio Belvis III vs. Court of Appeals G.R. Nos. L-61017-18November 14, 1988Felipe Fajelga vs. Romeo M. Escareal, et al. G.R. No. L-70270November 11, 1988People of the Philippines vs. Danilo B. Turla G.R. No. L-80485November 11, 1988Philippine National Construction Corporation vs. Pura Ferrer-Calleja, et al. G.R. Nos. 74297 & 74351November 11, 1988People of the Philippines vs. Cesar S. Cariño G.R. No. L-62386November 9, 1988Batangas-I Electric Cooperative Labor Union vs. Romeo A. Young G.R. No. L-70766November 9, 1988American Express International, Inc. vs. Intermediate Appellate Court, et al. G.R. No. L-72383November 9, 1988.Marcelo Soriano vs. Intermediate Appelate Court, et al. G.R. No. L-73304November 9, 1988Gloria Dela Cruz Vda. De Nabong vs. Quirino R. Sadang, et al. G.R. No. L-75433November 9, 1988People of the Philippines vs. Ruben P. Diaz, et al. G.R. No. L-76026November 9, 1988Porfirio Jopillo, Jr. vs. Court of Appeals, et al. G.R. No. L-76565November 9, 1988Bulletin Publishing Corporation, et al. vs. J. Edilberto Noel, et al. G.R. No. L-81948November 9, 1988Pan-Fil Company, Inc. vs. Gabriel I. Agujar, et al. G.R. No. L-35434November 9, 1988Israel Antonio vs. Court of Appeals G.R. No. L-62680November 9, 1988Republic of the Philippines vs. Court of Appeals, et al. G.R. Nos. L-70565-67November 9, 1988People of the Philippines vs. Robert Poculan G.R. Nos. L-63074-75November 9, 1988People of the Philippines vs. Andru Lapatha, et al. G.R. No. L-74051November 8, 1988People of the Philippines vs. Eugenio Rellon G.R. No. L-75583November 8, 1988Gregorio Araneta University Foundation vs. Antonio J. Teodoro G.R. No. L-77028November 8, 1988Republic of the Philippines vs. Court of Appeals, et al. G.R. No. L-77109November 8, 1988Eugene J. Kneebone vs. National Labor Relations Commission, et al. G.R. No. L-77115November 8, 1988People of the Philippines vs. Rufino L. Bantac, et al. G.R. No. L-48278November 8, 1988Aurora Tambunting, et al. vs. Court of Appeals, et al. G.R. No. L-51806November 8, 1988Civil Aeronautics Administration vs. Court of Appeals G.R. No. L-53798November 8, 1988Alberto C. Roxas, et al. vs. Marina Buan, et al. G.R. No. L-55230November 8, 1988Richard J. Gordon vs. Regino T. Veridiano II, et al. G.R. No. L-69778November 8, 1988People of the Philippines vs. Sixto Tabago G.R. No. L-77113November 8, 1988Delfin L. Gonzalez vs. National Labor Relations Commission G.R. No. L-78052November 8, 1988People of the Philippines vs. Ro0lando E. Roa G.R. No. L-37010November 7, 1988Jesus Manahan vs. People of the Philippines G.R. No. L-56464November 7, 1988People of the Philippines vs. Adriano Malmis, et al. The Lawphil Project - Arellano Law Foundation, Inc. Pablo S. Cruz vs. Commission on AuditFlorencio Reyes, Jr. vs. Leonardo M. RiveraGroup Developers vs. Lumen PolicarpioRepublic of the Philippines vs. Intermediate Appellate CourtAlejandro Magtibay vs. Court of Appeals, et al,Belyca Corporation vs. Pura Ferrer Calleja, et al,Gregorio Tengco vs. Jose and Victoria AliwalasDelta Motors Corporation vs. Court of AppealsEvelyn J. Sangrador vs. Francisco ValderramaRizal Commercial Banking Corporation vs. Pacifico P. De CastroRepublic of the Philippines vs. Court of AppealsSilverio Godoy, et al. vs. Nino T. Ramirez, et al.Perla Hernandez vs. Hon. Pedro C. Quitain., et al,Crispulo Garol vs. Employees' Compensation CommissionMarcelino Mejia vs. Intermediate Appellate CourtNational Service Corporation vs. National Labor Relations CommissionMacario Q. Falcon vs. Itermediate Appellate CourtCommander Realty, Inc. vs. Court of AppealsDionisia Antallan vs. Government Service Insurance SystemEleuterio C. Perez vs. Court of AppealsPeople of the Philippines vs. Victor MejiasPacific Banking Corporation, vs. Court of AppealsSalvador Sapugay vs. Natividad Capus Bobis, et al.Felix Danguilan vs. Intermediate Appellate CourtDominga S. Cunanan vs. Jose L. Cruz.Atlas Consolidated Mining & Development Corporation vs. National Labor Relations Commission, et al.Luis M. Fuentes vs. National Labor Relations Commission, et al.Maximo Gabrito, et al. vs. Court of AppealsBanque Del' Indochine Et De Suez, et al. vs. Ramon Am. Torres, et al.Medco Industrial Corporation, et al. vs. Court of Appeals, et al.National Waterworks & Sewerage Authority vs. NWSA Consolidated UnionPeople of the Philippines vs. Sotero Luardo, et al.Severino Mateo vs. Andres Plan, et al.People of the Philippines vs. Leopoldo Pardilla, et al.Romeo N. Portugal, et al. vs. Rodrigo R. Reantaso, et al.Yao Kee, et al. vs. Aida Sy Gonzales, et al.Maria Luisa O. Cojuangco, et al. vs. Manuel V. Romillo, Jr. et al.Litton Mills Employees Association vs. Pura Ferrer CallejaAntonio M. Garcia, Dynetics, Inc. vs. Court of Appeals, et al.Antonio Layug vs. Intermediate Appellate Court, et al.Mamita Pardo De Tavera vs. Bonifacio A. Cacdac, Jr.People of the Philippines vs. Demetrio Maravilla, Jr.People of the Philippines vs. Alfredo BandoquilloNicolas Laurente vs. Court of Appeals, et al.Pan Realty Corporation vs. Court of Appeals, et al.Arturo Del Pozo, et al. vs. Alfonso PenacoWestern Minolco Corporation vs. Court of Appeals, et al.Trinidad S. Estonina vs. Southern Marketing Corporation, et al.Cresencio M. Rocamora, et al. vs. Rtc, et al.People of the Philippines vs. Desiderio G. Aliocod, et al.Imperial Vegetable Workers Union, et al. vs. Benjamin A. Vega, et al.Paz Villagonzalo, et al. vs. Intermediate Appellate Court, et al.Boman Environmental Development Corporation vs. Court of Appeals, et al.Nobio Sardane vs. Court of Appeals, et al.People of the Philippines vs. Felipe ElizagaPeople of the Philippines vs. Anacleto M. MontejoBenito Lim vs. Rodolfo D. Rodrigo, et al.People of the Philippines vs. Rodolfo T. CaridoPeople of the Philippines vs. Benito RamosInsular Bank of Asia vs. Intermediate Appellate Court, et al.People of the Philippines vs. Fernando B. Pugay, et al.Benjamin S. Aprieto, et al. vs. Intermediate Appellate CourtPedro T. Layugan vs. Intermediate Appellate Court, et al.Sherman Shafer vs. Regional Trial Court of Olongapo City, et al.Maximo V. Soliven vs. Ramon P. MakasiarFelix De Villa vs. Jose JacobRose Packing Company, Inc vs. Court of AppealsHeirs of E. B. Roxas, Inc., et al. vs. Macario Tolentino, et al.Concordia M. De Leon vs. Employees' Compensation Commission, et al.Batangas Laguna Tayabas Bus Company, et al. vs. Intermediate Appellate Court, et al.Nerio Belvis III vs. Court of AppealsFelipe Fajelga vs. Romeo M. Escareal, et al.People of the Philippines vs. Danilo B. TurlaPhilippine National Construction Corporation vs. Pura Ferrer-Calleja, et al.People of the Philippines vs. Cesar S. CariñoBatangas-I Electric Cooperative Labor Union vs. Romeo A. YoungAmerican Express International, Inc. vs. Intermediate Appellate Court, et al.Marcelo Soriano vs. Intermediate Appelate Court, et al.Gloria Dela Cruz Vda. De Nabong vs. Quirino R. Sadang, et al.People of the Philippines vs. Ruben P. Diaz, et al.Porfirio Jopillo, Jr. vs. Court of Appeals, et al.Bulletin Publishing Corporation, et al. vs. J. Edilberto Noel, et al.Pan-Fil Company, Inc. vs. Gabriel I. Agujar, et al.Israel Antonio vs. Court of AppealsRepublic of the Philippines vs. Court of Appeals, et al.People of the Philippines vs. Robert PoculanPeople of the Philippines vs. Andru Lapatha, et al.People of the Philippines vs. Eugenio RellonGregorio Araneta University Foundation vs. Antonio J. TeodoroRepublic of the Philippines vs. Court of Appeals, et al.Eugene J. Kneebone vs. National Labor Relations Commission, et al.People of the Philippines vs. Rufino L. Bantac, et al.Aurora Tambunting, et al. vs. Court of Appeals, et al.Civil Aeronautics Administration vs. Court of AppealsAlberto C. Roxas, et al. vs. Marina Buan, et al.Richard J. Gordon vs. Regino T. Veridiano II, et al.People of the Philippines vs. Sixto TabagoDelfin L. Gonzalez vs. National Labor Relations CommissionPeople of the Philippines vs. Ro0lando E. RoaJesus Manahan vs. People of the PhilippinesPeople of the Philippines vs. Adriano Malmis, et al.The Lawphil Project - Arellano Law Foundation, Inc.
Manila
SECOND DIVISION
G.R. No. L-71557 November 29, 1988
PABLO S. CRUZ,petitioner,
vs.
COMMISSION ON AUDIT,respondent.
Epifanio P. Arias for petitioner.
The Solicitor General for respondent.
PADILLA,J.:
In this petition for review on certiorari, petitioner seeks to annul and set aside Commission on Audit Decision No. 358,1dated 20 May 1985, which denied his request to include in the computation of additional architect's fees the cost of some equipments, specifically, "Items "F", "G" and "H" of Group I-Built-in equipment of Phase "C" in the construction of the GSIS hospital building.
The controversy arose from the following antecedents:
On 27 September 1960, Pablo S. Cruz (herein petitioner), a duly licensed architect, entered into a "Contract of Services"2with the Government Service Insurance System (hereinafter, GSIS) for the construction of the GSIS Hospital (also known as Hospital ng Bagong Lipunan). Under such contract, petitioner agreed to perform preliminary, contract documents and supervision services, for which GSIS agreed to pay "3.65% (3.50% for preliminary and contract documents services and .15% for supervision services) of Ten Million Pesos (P10,000,000.00)."3The contract further provided that should there be an increase or decrease in the cost of the construction, the architect's fees would be adjusted accordingly.4
1. After the delivery of services has been commenced by petitioner, the total project cost was finally agreed upon by the parties and approved by GSIS at Fifteen Million Pesos (P15,000,000.00), allocated at Thirteen Million Pesos (P13,000,000.00) for building and Two Million Pesos (P2,000,000.00) for equipment. Based on such increased cost of construction, petitioner made a claim for the corresponding increase in his architect's fees. The amount of P232,091.96 was requested corresponding to all equipment Items in Group I of Phase "C", specifically Items "A" to "H". When the voucher for the claim of petitioner was presented to the office of the Auditor, GSIS, Manila, for pre-audit, the aforesaid amount was reduced to only P140,737.49 corresponding to the cost of Items "A" to "E" of Phase "C". The disapproved difference of P91,354.47 corresponds to the cost of Items "F", "G" and "H" of Phase "C". The disallowance was based on the ruling5of the Honorable, the Chairman of the Commission on Audit (hereinafter, COA or Commission) that, "... the claim of Mr. Pablo Cruz for payment of additional architect's fees may be given due course provided however that the amounts under Items "F", "G" and "H" of the Group I-Built-in equipment covered by Phase "C" should be deducted from the total cost of equipment in the computation of the percentage fee ...6The said decision of COA was based mainly on the principle that equipments are not part of construction materials and therefore cost of equipment is not considered part of construction cost.
Petitioner filed a motion to reconsider COA Decision No. 155. The motion was denied in COA Decision No. 358, dated 20 May 1985, subject of the present petition for review.
It is COA's position that cost of Item "F" (laundry equipment), Item "G" (x-ray equipment) and Item "H" (stills, sterilizers and special lighting equipment) is not part of the construction cost for purposes of computing architect's fees, on the premise that their inclusion in the construction did not entail exercise of architect's skill or expertise and that these equipments are not really integral parts of the building. The Commission further states that architect's fees should be dependent on the nature of equipment installed and since Item "F", "G" and "H" are merely additional features, they should not be deemed part of the construction cost, following thedictumlaid down in the U.S. case ofAlabama Great Southern Railroad Company v. Davenport and Co.7that "equipment is distinct from and does not include construction."
Upon the other hand, petitioner insists that the items in controversy are integral parts of the hospital building. In his letter of 19 December 1983 to the GSIS, he quotes a portion of the opinion of the Board of Examiners for Architects dated 2 October 1972 as follows:8
NOT PART OF THE CONSTRUCTION
ITEM F—(LAUNDRY EQUIPMENT)
IF SOLD TO THE OWNER AS A PACKAGE TYPE WHEREIN THE ARCHITECT DOES NOT HAVE TO DETERMINE ITS CAPACITY, SIZE, ETC., THEN IT SHOULD NOT BE PART OF THE BUILDING.
ITEM G—(X-RAY EQUIPMENT) SAME AS ITEM "F"
ITEM H—SAME AS ITEM "F".
In short, Items "F", "G" and "H" are, according to petitioner, considered not parts of the construction cost if they were sold to the owner as package type units, where the architect did not have to determine the capacity, size, etc. of the equipment in relation to plans and specifications prepared by him; otherwise, they should be considered part of the construction cost of the building for purposes of determining architect's fees. The petitioner argues in this connection, that the aforesaid items, not having been sold to the GSIS as package units but subjected to public bidding, in accordance with specifications determined by him (architect), should be considered part of the construction cost along with Items "A", "B", "C", "D" and "E" of Phase "C" of the Contract, which are specifically the following:
Item "A"—Emergency Power Plant.
Item "B"—Signal and Communication Unit.
Item "C"—Elevator and Dumb Waiters. Item
Item "D"—Boilers.
Item "E"—Pumps and Fire Fighting Equipments.9
Petitioner's contention in this regard is supported by the Chairman of the Board of Architecture in his clarificatory letter dated 8 November 1983.10
Furthermore, the petitioner points to the inapplicability of the Alabama case upon which the respondent Commission appears to have relied heavily in denying petitioner's claim. The cited case, according to petitioner, involved railroad construction costs merely as an incident in a situation where the defendant railroad company was sued for damages to plaintiffs storeroom caused by sparks emitting from defendant's locomotive engine. Judgment had been rendered for the railroad company, but plaintiff moved for new trial and this was affirmed on appeal.
The petitioner refers also to Republic Act No. 545, particularly Section 14, paragraph (c) which provides: "General Practice of Architecture—The practice of architecture is hereby defined to be the act of planning, architectural designing, specifying, supervising and direction to the erection ... which enter into the production of a complete building or structures performed thru the medium of unbiased preliminary studies of plans, consultations, specifications ... contract documents ..." The term "complete building" connotes, according to petitioner, the inclusion of equipments as integral parts of the building since, without such equipments, the building can not function in accordance with the purpose for which it was intended.
We rule for petitioner. The respondent Commission's argument that, while it may be assumed that cost of equipment forms part of construction cost, yet, such cost should not be considered in computing additional architect's fees, cannot be sustained.
To begin with, COA itself admitted that the computation of architect's fees is consequent or dependent upon thenatureof some equipment, i.e., like those "of a fixed nature, more or less so that they are very necessary to put the building into operation" and that "these equipments (other than Items "F", "G" and "H") demanded the use of architect's technical skills ...11What respondent COA failed to recognize is the fact that Items "F", "G" and "H" fall also under this type of equipment to warrant their inclusion in the construction cost, and to form part of the basis for computing petitioner's professional fees. In the case of Item "F" (laundry equipment), the architect had to estimate the linen loads in order to determine the number of units of laundry equipment required, their capacities, sizes and other characteristics, in relation to the fact that it is not unusual for a hospital to have laundry service. It is also inconceivable for the GSIS Hospital with a capacity of 800 beds to function as a Medical Center without x-ray equipments, stills, sterilizers and special lighting fixtures; their integration into the plans, as prepared by the architect, was necessary to put the building into operation as a hospital building. Items "F", "G" and "H" which were subjected to public bidding were, as even the COA itself admitted in its earlier Decision No. 155, dated 6 January 1977,12in Group I-Built-in equipment covered by Phase "C". It would, therefore, be unfair and unreasonable to claim that said items are not an integral part of the hospital building.
Moreover, in determining the meaning of actual construction cost, distinction should be made between hospital and residential or office buildings.ℒαwρhi৷A hospital building requires specialized equipment and facilities for its occupancy and use because of its nature and purpose which are obviously different from those of a residence or office building. It is also because of these differences that the U.S. Public Health Service expressly recognizes initial equipment as part of the construction cost.13This likewise explains why the Alabama case dictum, previously referred to, is not relevant because, the statement that "equipment is different from construction," may refer particularly to a railroad construction.
In deciding this controversy, it is necessary that we refer to the written agreement between GSIS and petitioner. Unfortunately, in the "Contract of Services" the scope of "total construction cost" is not defined with precision and so recourse may be had to the well-settled principle that, in the construction and interpretation of a contract, the intention of the parties must be sought. In the case at bar, of note is the fact that two (2) affidavits were executed, one by Mr. Archimedes Villanueva, former Chairman of the GSIS Hospital Committee14and the other by Mr. Mauro Almazar former GSIS Hospital Committee member15to show that the architect's fees that had been agreed upon and approved by the GSIS are based ontotal cost of construction which includes cost affixed or built-in equipment.This leads to the conclusion that, when petitioner submitted the schedule of Group I-Built-in equipment,16the intention of the parties was to include such equipment and thus settle whatever ambiguity there may have been as to the scope of the professional services, subject to architect's fees. It is basic that when the provisions of a written contract are ambiguous and there is sufficient evidence showing the existence of other agreements collateral thereto, parol evidence is admissible to prove the real agreement of the parties.17
But, even assumingarguendothat the contract's ambiguity by reason of the vagueness of the term "total construction cost" is unremedied by any clear evidence of the intention of the contracting parties, we are still left with the option of applying the general usage of the phrase in question in the standard practice of the architectural profession. Again, the view of no other than the Chairman of the Board of Architecture, earlier mentioned, lends support to the stand of the petitioner that cost of built-in equipment in buildings designed by architects should be considered part of the construction for purposes of determining construction cost and, hence, architect's fees.
WHEREFORE,COA Decision No. 358, dated 20 May 1985, isSET ASIDEand the claim of petitioner in the total amount of P91,354.47 representing the balance of his architect's fees, for Items "F", "G" and "H", Phase "C", in the construction of the GSIS hospital, is given due course.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Sarmiento and Regalado, JJ., concur.
Footnotes