MACASAET VS.

COA

Facts:

Sometime on 15 September 1977, private respondent PTA entered into a

contract for project design and development of the proposed Zamboanga Gold and
Country Club in Zamboanga City with the petitioner company, but originally with Flavio
Macasaet alone. Under the contract, PTA has agreed to pay the petitioner a professional
fee of 7% of the actual construction cost.

However, upon the completion of the project, PTA paid Supra Construction
Company, the main contractor of the project the additional sum of Php 3,148,198.26 as
an escalation cost of the contract price due to the increase in the construction materials
price.

This escalation has come to the knowledge of the petitioner which urged the
latter to request from the respondent an additional professional fee. Respondent denied
such claim contending that the escalation has nothing to do with the additional work on
the part of the petitioner.

Issue:

WON petitioner is entitled for an additional professional fee.

Ruling:

Yes. Pursuant to the contract of the parties, it will be noticed that under Section
4 of the same, Petitioner shall be paid a 7% professional fee from the final actual
project cost. The court ruled that the price escalation must be deemed included in the
final actual project cost and that petitioner be entitled to the payment of its additional
professional fees.