g77 is not searching the include paths, via

      %  g77 -c code.f  -I/usr/include

Thus, fortran include statements of the form

                include 'mpif.h'                !   the lam package header
file "/usr/include/mpif.h" 

fail.  However, if the full path is typed in the fortran source file:

               include '/usr/include/mpif.h'

then g77 does include the file.