Court Opinion

ID: 9454613
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:52:01.841427+00
Date Added: 2024-06-11T17:34:11.996817
License: Public Domain

On Petition for Rehearing
PER CURIAM.
The National Shawmut Bank brings this petition asking that we reconsider our earlier decision holding that a surety’s right of subrogation is not displaced by Article 9 of the Uniform Commercial Code. Petitioner’s argument is directed at the validity of our interpretation of the decision of the Massachusetts Supreme Judicial Court in French Lumber Co., Inc. v. Commercial Realty & Finance Co., Inc., 346 Mass. 716, 195 N.E.2d 507 (1964).*
Petitioner raises several points which we consider hereafter only to the extent that our opinion does not reflect them. Before, however, proceeding to a discussion of petitioner’s specific arguments, we note that while French Lumber as an expression of Massachusetts law is central to our holding, it is not inconsistent with existing authority on this issue. But even if it were, we must reject petitioner’s attempt to inter French Lumber by examining the briefs and discovering that the court’s statement was not based on any contention advanced therein.
Petitioner’s first argument is that whereas here subrogation is a substitute for a security interest, in French Lumber subrogation was employed as an adjunct of general equity principles. This purported distinction is in fact a comparison of the two entirely separate concepts of function and rationale. In both cases subrogation served as a substitute for a security interest, and in both cases the substitution is justified by the invocation of general equity principles. Indeed, subrogation is a creature of equity, and therefore always arises as an adjunct of equitable principles.
Petitioner’s second argument is that since all three lenders in French Lumber had recorded their security interests under the Code, that case involved subrogation within the Code. The important point is, however, that but for subrogation the third lender would have been subordinated to the second lender. In French Lumber subrogation was used to override the priorities of the Code — possibly exerting more force than here where, arguably at least, the surety’s interests are not covered by Article 9 of the Code.
Finally, petitioner asserts that the third lender in French Lumber was a “volunteer” and not entitled to subrogation rights. The general rule is that a mere volunteer is not entitled to subro-gation. That fact would not, of course, bar the Massachusetts Supreme Judicial Court from holding otherwise. But, in fact, the third lender does not fall under the volunteer doctrine, which refers to *850gratuitous or quasi-contractual undertakings. The third lender’s rights, as did the surety’s here, arose because of its contractual obligations.
Petition for rehearing denied.

 We discuss the argument ■without much enthusiasm for petitioner’s attempt to comply with our rule 6 by saying that it did not foresee the weight we would assign to that case, not relied upon by the district court. Whether selected for citation by that court or not, the unqualified language of French that “No provision of the Code (U.C.C.) purports to affect the fundamental equitable doctrine of subro-gation” posed an obvious problem for petitioner, then the appellant.