
    Nassau Trust Company, Respondent, v Montrose Concrete Products Corp., Appellant, et al., Defendants.
    Argued February 16, 1982;
    decided May 13, 1982
    
      POINTS OF COUNSEL
    
      Carter B. Simpson and Terence F. Gilheany for appellants.
    I. The court below failed to apply the proper legal standards in striking defendants’ affirmative defenses and in granting summary judgment to the bank. (Krantz v Garmise, 13 AD2d 426; Rosenstiel v Rosenstiel, 20 AD2d 71; Colella v Mahoney, 42 AD2d 773; Potter v Thomashow, 271 App Div 878; Veerhoff v Miller, 30 App Div 355; Station Improvement Corp. v Wychwood Holding Corp., 141 Misc 794; Ferlazzo v Riley, 278 NY 289; Wedab Corp. v Weinger, 283 App Div 877; Rotuba Extruders v Ceppos, 46 NY2d 223; Moskowitz v Garlock, 23 AD 2d 943.) II. Defendants have demonstrated that the bank and Montrose entered into a valid contract, whereby the bank agreed to forbear from instituting this foreclosure proceeding for a stated period of time. (Colella v Mahoney, 42 AD2d 773; Potter v Thomashow, 271 App Div 878; Veerhoff v Miller, 30 App Div 355; Station Improvement Corp. v Wychwood Holding Corp., 141 Misc 794; Strobe v Netherland Co., 245 App Div 573; Weiss v Weiss, 266 App Div 801; Richman v Brookhaven Servicing Corp., 80 Misc 2d 563; Mencher v Weiss, 306 NY 1.) III. The uncontroverted facts of record establish that the bank has waived its right to foreclosure. (Alsens Amer. Portland Cement Works v Degnon Contr. Co., 222 NY 34; Carfi v De Martino, 181 Misc 428; Matter of Sullivan v Taylor, 254 App Div 766, 279 NY 364; Arnot v Union Salt Co., 186 NY 501; Imperator Realty Co. v Tull, 228 NY 447; Veerhoff v Miller, 30 App Div 355.) IV. The uncontroverted facts of record establish that the bank is estopped from prosecuting this foreclosure proceeding. (Citibank [New York State] v Zibro Tire & Appliance Co., 72 AD2d 846; Royce v Rymkevitch, 29 AD2d 1029; Gray v Met Contr. Corp., 4 AD2d 495; Imperator Realty Co. v Tull, 228 NY 447; Marine Midland Bank — Western v Center ofWilliamsville, 48 AD2d 764; Witherell v Kelly, 195 App Div 227.) V. The uncontroverted facts of record establish that to permit resort to the equitable remedy of foreclosure would be unconscionable in the present case. (Bieber v Goldberg, 133 App Div 207; Federal Nat. Mtge. Assn. v Ricks, 83 Misc 2d 814; Domus Realty Corp. v 3440 Realty Co., 179 Misc 749, 266 App Div 725; Berman v Blooming Farms Joint Venture, 50 AD2d 558; Kaplan v 2108-2116 Walton Ave. Realty Co., 66 AD2d 668.) VI. Since the counterclaim pleaded by Montrose alleges the elements of breach of contract, fraud, negligent misrepresentation and interference with prospective advantage or precontractual relations, it was error to dismiss the counterclaim. (H. M. Brown, Inc. v Price, 38 AD2d 680; Allegheny Coll, v National Chautauqua County Bank of Jamestown, 246 NY 369; King & Son v De Santis Constr. No. 2 Corp., 97 Misc 2d 1063; Schmidt v McKay, 555 F2d 30.)
    
      Charles M. Schultzman for respondent.
    I. The order sought to be appealed from does not finally determine the action within the meaning of the Constitution. II. The order of the court below should be affirmed as no issues of fact were raised on the motion. (Maliad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285; Broadway Sav. v Rosenblat, 32 AD2d 773; Ferlazzo v Riley, 278 NY 289; Graf v Hope Bldg. Corp., 254 NY 1.)
    
   OPINION OF THE COURT

Meyer, J.

In a foreclosure action based upon nonpayment, the mortgagee’s oral waiver of the right to accelerate the principal and foreclose in order to give the delinquent mortgagor a reasonable opportunity to negotiate an unforced sale of the mortgaged premises constitutes a valid affirmative defense to foreclosure, absent withdrawal of the waiver upon reasonable notice to the mortgagor. Accordingly, because the pleadings and affidavits in this foreclosure action create a triable issue of fact concerning waiver by plaintiff mortgagee and present nothing other than the commencement of the foreclosure action to suggest that plaintiff gave notice of withdrawal, it was error for the Appellate Division to strike from defendant mortgagor’s answer the affirmative defense of waiver and to grant plaintiff summary judgment of foreclosure. It was likewise error to strike defendant Montrose’s counterclaim. The judgment appealed from and the nonfinal order of the Appellate Division brought up for review should, therefore, be reversed and the order of Special Term should be reinstated.

I

In February, 1976, defendant Montrose Concrete Products Corporation mortgaged certain property to plaintiff Nassau Trust Company as security for a $300,000 loan. Louis G. Imperato, president of Montrose, and Edna Imperato, his wife, guaranteed the loan. The loan documents required quarterly amortization payments of $3,000 plus interest and gave Nassau Trust the option to accelerate the entire principal upon failure to make payments required by the mortgage within 30 days after the due date.

In February, 1977, Montrose was delinquent in its scheduled payments. Rather than declare a default, however, Nassau Trust entered into a written extension agreement with Montrose which established a new payment schedule. Neither the mortgage nor the note prohibited oral modification of the terms of either, but the extension agreement, which modified the note and mortgage, included a provision that “This agreement may not be changed or terminated orally.” Montrose was unable to honor even the new payment schedule, and in March, 1979, default was declared and foreclosure begun against Montrose and the Imperatos.

Nassau Trust’s complaint relied quite simply upon Montrose’s delinquency under the payment terms of the February, 1977 extension agreement. Montrose and the Imperatos each admitted nonpayment and pleaded affirmative defenses of waiver, unconscionability and unclean hands. Montrose’s answer additionally pleaded a counterclaim for damages equal to the difference between the fair market value of the mortgaged premises at the time the action was commenced and the sale price ultimately received for the premises based upon the facts set forth in the affirmative defenses. The Imperatos’ answer contained no counterclaim but asserted a fourth affirmative defense of release by reason of the extension agreement of February, 1977.

Essentially, the three affirmative defenses common to both answers rested on alleged oral representations made by Nassau Trust officers at three meetings held in June, October and December, 1978. According to Montrose and the Imperatos, Nassau Trust agreed at those meetings to waive any default in payment. In addition, as a result of those meetings, Nassau Trust allegedly knew or should have known that the subsequently initiated foreclosure action would prevent Montrose from concluding a sale of the mortgaged property at a fair market price sufficient to satisfy the balance due on the loan.

Nassau Trust moved to strike the answers of Montrose and the Imperatos as “sham and frivolous,” “demonstrably untrue,” as “constituting] no defense” and for summary judgment of foreclosure. Montrose and the Imperatos jointly opposed the motion with an affidavit by Louis Imperato. That affidavit expanded considerably upon the oral representations allegedly made at the June, October and December, 1978 meetings referred to in the answers. Names of the bank officers present were given. In addition, the affidavit introduced into the litigation a letter dated January 12, 1979 from Nassau Trust Vice-President Stuart C. Saxton to Mr. Imperato. The letter granted Montrose an extension of payment until January 31, 1979 “[pursuant to our conversation this afternoon.” In the letter, Saxton also agreed to consider granting Montrose an additional extension for a “period of time necessary to complete a closing” on the mortgaged property to Imperia Brothers, Incorporated, a competitor of Montrose, if two conditions were met by January 31 — payment of one year’s worth of delinquent real estate taxes and receipt of a signed contract for the sale of all or a portion of the mortgaged property.

The Imperato affidavit, however, set forth in specific detail his version of the telephone conversation of January 12 to which Saxton’s letter referred. According to Imperato, Saxton read him a draft of the letter and Imperato then informed Saxton that under no circumstances could the two conditions for an additional extension be met, and stated that the letter denied him adequate freedom to continue pending negotiations concerning the sale of the mortgaged premises and would require an immediate sale at a distress price. That the affidavit stated facts not conclusions is evident from the quotation following: “Mr. Saxton told me not to lower my asking price. Mr. Saxton said that I should not worry about the terms of the letter and that Nassau Trust would waive any default in meeting its terms until Montrose was able to close a sale to Imperia. I told Mr. Saxton that I would disregard his letter of January 12, 1979 and would contact him as soon as I had more details on the terms of the proposed sale to Imperia. Mr. Saxton agreed to this arrangement on behalf of Nassau Trust. I continued to negotiate with Imperia regarding the terms of the sale with the belief and understanding that Nassau Trust had waived any default during this period.” It also alleged the filing of a lis pendens and the initiation of foreclosure proceedings in March, 1979 by Nassau Trust had caused Imperia to withdraw from then pending negotiations in the expectation that the mortgaged property could be acquired on foreclosure at a far lower price than through negotiation and ended with the accusation that Nassau Trust had breached its agreement “to waive any defaults until the end of 1979.” No reply papers denying or disputing Mr. Imperato’s allegations were submitted by Nassau Trust.

Special Term denied the motion in its entirety reasoning that summary judgment was inappropriate, Nassau Trust having failed to refute the allegations of the Imperato affidavit, which raised issues of fact “the most important of which is whether plaintiff waived the defaults of defendants and its right to commence this action, at least until defendant owners could negotiate an unforced sale of the property.”

The Appellate Division modified the order of Special Term by striking the three common affirmative defenses as well as Montrose’s separate counterclaim and granting summary judgment of foreclosure aganst Montrose. It reasoned that any waiver by oral representation was invalid for want of consideration and that though section 5-1103 of the General Obligations Law dispensed with the need for consideration to support a written waiver signed by the party to be charged, the only such writing was Saxton’s January 12 letter which was subject to the conditions stated in it which concededly had not been complied with. As against the Imperatos it directed that the action be severed for trial of their fourth affirmative defense.

Final judgment of foreclosure having been entered by Special Term on remand to that court, Montrose appeals. The appeal brings up for our review the prior nonfinal Appellate Division order (CPLR 5601, subd [d]). For the reasons which follow, we reverse and reinstate the Special Term order.

II

When a plaintiff moves for summary judgment, it is proper for the court to look beyond the defendant’s answer and deny summary judgment if facts are alleged in opposition to the motion which, if true, constitute a meritorious defense (see Curry v Mackenzie, 239 NY 267; Gem Drywall Corp. u Scialdo & Sons, 34 AD2d 1063, app dsmd 27 NY2d 739; Alside Aluminum Supply Co. v Berliner, 32 AD2d 731; 4 Weinstein-Korn-Miller, NY Civ Prac, par 3212.10, at n 53).

Here, although the answers rest the first three affirmative defenses upon claimed meetings in June, October and December, 1978 and make no reference to the letter and telephone conversation of January 12, 1979, the unrefuted allegations of Louis Imperato’s affidavit are sufficient to establish triable issues of fact concerning whether plaintiff’s Vice-President Saxton orally assured Imperato that, notwithstanding the contrary written conditions contained in Saxton’s January 12 extension letter, Montrose had up to one year to conclude an unforced sale of the mortgaged property, whether Montrose acted in justifiable reliance upon that assurance to its detriment and whether in consequence of the bank’s withdrawal of that assurance without notice Montrose lost the opportunity to conclude a negotiated sale at a price more favorable than could be obtained in foreclosure. Because, as is hereafter developed, it cannot be said that these factual issues, if resolved in Montrose’s favor, would nonetheless fail as a matter of law to constitute an affirmative defense to foreclosure, summary judgment should not have been granted to Nassau Trust.

Ill

Although the defenses pleaded are waiver, unconscionability and unclean hands, defendants’ brief argues waiver, estoppel and unconscionability and makes no mention of unclean hands. The cases are not always clear concerning whether what is being discussed is waiver, estoppel, bad faith or unconscionable conduct. They do establish, however, “that a mortgagor is bound by the terms of his contract as made and cannot be relieved from his default, if one exists, in the absence of waiver by the mortgagee, or estoppel, or bad faith, fraud, oppressive or unconscionable conduct on the latter’s part” (Ferlazzo v Riley, 278 NY 289, 292). Consistent with the rule referred to above that a defense established by the papers is sufficient though unpleaded to warrant denial of a motion for summary judgment, we consider not only the defenses pleaded but estoppel as well. We conclude that on the facts alleged the defenses should not have been stricken nor should the counterclaim have been dismissed.

The Appellate Division erred in failing to distinguish between an oral agreement that purports to modify the terms of a prior written agreement and an oral waiver by one party to a written agreement of a right to require of the other party certain performance in compliance with that agreement (see Imperator Realty Co. v Tull, 228 NY 447; Arnot v Union Salt Co., 186 NY 501; Toplitz v Bauer, 161 NY 325; Thomson v Poor, 147 NY 402), and in failing to consider whether the facts set forth in the Imperato affidavit were sufficient to sustain Montrose’s claims of waiver, estoppel, bad faith or unconscionability. Modification of the terms of a mortgage requires consideration except when a statute, such as section 5-1103 of the General Obligations Law dispenses with the need for consideration when a writing (such as the Feb., 1977 extension agreement) exists. Neither waiver (Alsens Amer. Portland Cement Works v Degnon Contr. Co., 222 NY 34, 37; Arnot v Union Salt Co., 186 NY 501, 511, supra; Prentice v Knickerbocker Life Ins. Co., 77 NY 483) nor estoppel (Rothschild v Title Guar. & Trust Co., 204 NY 458, 464; Witherell v Kelly, 195 App Div 227, 233) rests upon consideration or agreement. A modification, because it is an agreement based upon consideration, is binding according to its terms and may only be withdrawn by agreement. An estoppel “ ‘rests upon the word or deed of one party upon which another rightfully relies and so relying changes his position to his injury’ ” (Triple Cities Constr. Co. v Maryland Cas. Co., 4 NY2d 443, 448; Lynn v Lynn, 302 NY 193, 205; Metropolitan Life Ins. Co. v Childs Co., 230 NY 285, 292). It is imposed by law in the interest of fairness to prevent the enforcement of rights which would work fraud or injustice upon the person against whom enforcement is sought and who, in justifiable reliance upon the opposing party’s words or conduct, has been misled into acting upon the belief that such enforcement would not be sought (White v La Due & Fitch, 303 NY 122,128). While estoppel requires detriment to the party claiming to have been misled, waiver requires no more than the voluntary and intentional abandonment of a known right which, but for the waiver, would have been enforceable (City of New York v State of New York, 40 NY2d 659; Davison v Klaess, 280 NY 252). A waiver, to the extent that it has been executed, cannot be expunged or recalled (see Alsens Amer. Portland Cement Works v Degnon Contr. Co., 222 NY 34, supra), but, not being a binding agreement, can, to the extent that it is executory, be withdrawn, provided the party whose performance has been waived is given notice of withdrawal and a reasonable time after notice within which to perform (Imperator Realty Co. v Tull, 228 NY 447, 456, supra; Arnot v Union Salt Co., 186 NY 501, 511, supra; Toplitz v Bauer, 161 NY 325, 333, supra; Thomson v Poor, 147 NY 402, 409, supra).

We have applied these principles to extensions of time for the payment of past due interest coupons on mortgage bonds (Arnot v Union Salt Co., supra); for the redemption of an insurance policy pledged for a loan past due (Toplitz v Bauer, supra); for the performance of a contract to peel bark from hemlock trees (Thomson v Poor, supra); and for the removal of violations which would otherwise constitute an objection to title of the real estate contracted to be conveyed (Imperator Realty Co. v Tull, supra), in each case finding that though no legally binding modification existed, an unwithdrawn waiver or waiver and estoppel stood in the way of enforcement of the original agreement. Moreover, lower courts using language of estoppel have upheld an affirmative defense and counterclaim predicated upon a mortgagee’s agreement after a mortgagor’s default to give the mortgagor adequate time to liquidate the mortgaged real property in an orderly fashion (Manufacturers & Traders Trust Co. v Cottrell, 71 AD2d 538) and have also upheld an affirmative defense and counterclaim based upon an alleged agreement by a mortgagee to give the mortgagor additional time to obtain substitute financing (Marine Midland Bank — Western v Center of Williamsville, 48 AD2d 764). The legal principles at work are perhaps best summarized by Judge Cardozo, as he then was, concurring in the Imperator Realty Co. case. To the contention that the Statute of Frauds prohibited enforcement of the agreement to accept a cash deposit in lieu of removal of building violations because the agreement was oral, he responded (228 NY, at p 457): “I do not think we are driven by any requirement of the Statute of Frauds to sustain as lawful and effective this precipitate rescission, this attempt by an ex post facto revocation, after closing day had come and gone, to put the plaintiff [seller] in the wrong. ‘He who prevents a thing from being done may not avail himself of the non-performance which he has, himself, occasioned, for the law says to him, in effect; “This is your own act, and, therefore, you are not damnified” ’. The principle is fundamental and unquestioned. Sometimes the resulting disability has been characterized as an estoppel, sometimes as a waiver. We need not go into the question of the accuracy of the description. The truth is that we are facing a principle more nearly ultimate than either waiver or estoppel, one with roots in the yet larger principle that no one shall be permitted to found any claim upon his own inequity or take advantage of his own wrong. The Statute of Frauds was not intended to offer an asylum of escape from that fundamental principle of justice.” (Citations omitted.)

Against this background of decisional law it is evident that even if there were no consideration for Saxton’s alleged assurances made in the telephone conversation of January 12, 1979, the Imperato affidavit sets forth unrefuted facts from which, notwithstanding Montrose’s admitted delinquencies, a waiver of the right to declare a default and foreclose may be found by the trier of fact. Upon the basis of the affidavit may also be found reliance, justifiable by reason of the past history of extension, by Montrose to its detriment in that it continued to negotiate with Imperia rather than to seek other ways out of its dilemma only to have Imperia withdraw from those negotiations when foreclosure was instituted without notice or any reasonable opportunity to cure its defaults or conclude a negotiated sale of the mortgaged premises. Whether Montrose can convince the trier of fact of those facts, or whether Nassau Trust can show that the giving of notice would “have been but an idle ceremony, and could not have changed the situation” (Toplitz v Bauer, 161 NY 325, 335, supra) are questions not before us.

Nor does the provision in the extension agreement against oral change or termination foreclose the defense Montrose now asserts, for subdivision 1 of section 15-301 of the General Obligations Law speaks only to a change by agreement (that is, a modification) and not to a waiver, as is evident from the explicit reference to waiver in subdivisions 4 and 5 of the same section (cf. Rose v Spa Realty Assoc., 42 NY2d 338, 343; General Obligations Law, § 5-1103; Uniform Commercial Code, § 2-209, subd [4]; par 2 of NY Anns to subd [4] [McKinney’s Cons Laws of NY, Book 62-1/2, Part 1, p 183]; 1956 Report of NY Law Rev Comm, pp 371-372).

Montrose argues that, apart from the foregoing equitable principles, there was, indeed, consideration for the January 12, 1979 oral agreement to extend which bound Nassau Trust not to foreclose. The Imperato affidavit states the forbearance period variously as “for one year” (which would mean until January 12, 1980), “until Montrose was able to close a sale of the property to Imperia,” and “until the end of 1979,” but those discrepancies simply create a credibility issue for the trier of fact. Defendants may be able to show detriment to themselves or benefit to Montrose through the continued negotiations with Imperia (Holt v Feigenbaum, 52 NY2d 291, 299; see Raedeke v Gibraltar Sav. & Loan Assn., 10 Cal 3d 665). If consideration is established by the proof there would then be a modification, as distinct from waiver or estoppel. If so Montrose may, in light of the provision in the extension agreement against oral change and of subdivision 1 of section 15-301 of the General Obligations Law, have proved itself out of court, unless it can prove a writing or an estoppel. At the present stage of the action, however, the unrefuted Imperato affidavit is sufficient to require a trial, though, as above noted, the answers will have to be amended to conform the defenses and counterclaims alleged to the allegations and arguments of defendants’ affidavit and brief.

For the foregoing reasons, the judgment appealed from and the nonfinal order of the Appellate Division brought up for review should be reversed and the order of Special Term dated October 31, 1979 reinstated, with costs.

Jasen, J.

(dissenting). The majority holds today that in a mortgage foreclosure action based upon nonpayment of interest and principal, an alleged oral waiver by the mortgagee of the right to accelerate the principal and foreclose constitutes a valid affirmative defense to foreclosure. Since sound legal principles and the record in this case make such a result unreasonable and untenable, I disagree with the majority’s holding and would affirm the order of the Appellate Division.

Plaintiff, who had loaned the defendant $300,000, agreed to enter into an extension agreement rather than foreclose on the property defendant had mortgaged to secure the loan. That extension agreement established a new payment schedule, provided that the agreement could not be changed or terminated orally, and also provided that all the rights and obligations specified by the parties under the prior agreement would be continued under the terms of the extension agreement. Particularly pertinent to this case is paragraph 8 of the mortgage which provides that the whole principal will become due and payable upon the failure of Montrose to “pay any installment of principal or interest within thirty days from the date same became due and payable.” Except for its obvious obligation to repay the loan, the defendant had no responsibilities under the contract other than to continue to pay certain real property taxes.

It is not disputed that the defendant also defaulted on its responsibilities under the extension agreement. Even then, the bank did not immediately exercise its right to foreclose, but rather continued, in good faith, to work out an arrangement whereby the defendant could make the required payments.

When it appeared that no satisfactory arrangement would be reached, Mr. Saxton, a vice-president of the bank, according to affidavits filed by the defendant, called and informed Mr. Imperato, president of the defendant company, that certain payments had to be made by the end of the month or the bank would be forced to proceed with the foreclosure action. He also informed Mr. Imperato that the bank would be forwarding a letter to that effect. Obviously upset with this action, Mr. Imperato argued for additional time to complete the negotiations for the sale of defendant Montrose to its competitor, Imperia Brothers, Inc., and, according to the affidavit, Mr. Saxton agreed “to waive any default in meeting its terms until Montrose was able to close a sale to Imperia.”

Along with his affidavit, Mr. Imperato filed a copy of the letter dated January 12, 1979, which he received from the bank. That letter indicated the bank was allowing Montrose until January 31, 1979 to pay the delinquent real estate taxes and present the bank with a signed contract of sale to Imperia. That letter stated that these conditions were set forth on the basis of the telephone conversation between the parties. It further stated that: “If these conditions are met, Nassau Trust Company will consider extending for an additional period of time necessary to complete a closing on said contract.” In closing the letter, Mr. Saxton reiterated the bank’s position that if the terms of the letter were not met, Nassau Trust would begin immediate foreclosure proceedings. Despite the clear language of the letter, Mr. Imperato states that he ignored the letter and relied on the prior oral waiver. He did so without so much as double-checking his understanding of the telephone conversation, to which the letter made specific reference, with Mr. Saxton or anyone at the bank.

The affirmative defense which these papers allegedly raise is that the bank orally waived its right to foreclose for one year and that because he relied on that waiver in continuing to negotiate with Imperia, the bank is now estopped from asserting its right to foreclose. (Imperator Realty Co. v Tull, 228 NY 447.) Defendant’s brief, however, also argues that there was an oral modification of the agreement because the bank agreed to defer its right to foreclose for one year in exchange for the defendant securing a buyer for the property and paying off the loan with the proceeds of the sale. Any construction of these allegations, I believe, can only lead one to conclude that there is no basis, applying sound commercial and contract law principles, on which to hold that a valid affirmative defense has been asserted.

The clear language of the extension agreement states that “[tjhis agreement may not be changed or terminated orally.” On the face of that provision and subdivision 1 of section 15-301 of the General Obligations Law, it appears clear that the parties intended that all changes, be they terminations, waivers or modifications, would be required to be in writing. Certainly, contracting parties have the discretion to require that all further changes, of any variety, be in writing. Indeed, such provisions are designed precisely to avoid litigation, such as presented by this case, which is based on mere bare allegations of oral waivers, to which no defense except the assertion that the oral waiver was never made can be raised.

Nor was it unreasonable for the parties to this agreement to assume that the broad “no changes” language used in this agreement would bar allegations of all forms of changes under section 15-301 of the General Obligations Law. The majority states that “subdivision 1 of section 15-301 of the General Obligations Law speaks only to a change by agreement (that is, a modification) and not to a waiver,” but the language of that statute states only that “[a] written agreement * * * which contains a provision to the effect that it cannot be changed orally, cannot be changed by executory agreement unless such executory agreement is in writing and signed by the party against whom enforcement of the change is sought”. (Emphasis supplied.) Thus, it seems clear to me that when the parties agree, as it is alleged by the defendant that they did in this case, that there will be a new payment date (be it one year hence or at the time of sale) that new agreement is required by section 15-301 of the General Obligations Law to be in writing. Indeed, subdivision 4 cited by the majority indicates that the bank could not have initially waived the contract provision barring oral changes which would have been necessary to enable it to orally change the provisions concerning the payment schedule.

Furthermore, the specific language exempting waivers used in section 2-209 of the Uniform Commercial Code, also cited by the majority, indicates that the Legislature did not intend to so exempt waivers from the coverage of the General Obligations Law. If it had so intended, there is no reason why the specific language referring to waivers used in section 2-209 of the Uniform Commercial Code could not have been used in this statute also. But instead, the statute forbids all changes by executory agreement — that is, agreements yet to be performed. Since Mr. Imperato’s affidavit alleges only future obligations on the part of either party, this is clearly an executory agreement. (East Riv. Sav. Bank v 245 Broadway Corp., 284 NY 470, 476.)

But even if one construes section 15-301 of the General Obligations Law, as does the majority, not to cover waivers, there is no support for terming this new agreement to be a waiver. Although the defendant asserts that this is a waiver, the facts presented allege not a waiver (Clark v West, 193 NY 349, 360), but an oral modification of the contract. A modification, which he argues, is supported by an exchange of promises: the bank promising not to foreclose and the defendant promising to secure a buyer for the property. Such a modification, even the majority would agree, is clearly barred by section 15-301 of the General Obligations Law. (Chemical Bank v Wasserman, 45 AD2d 703, affd 37 NY2d 249.) To construe this as a waiver, rather than a modification of the contract, ignores the fact that substantial rights and obligations of both parties are affected by this change in the contract. The bank has deferred certain rights for at least one year and the defendant has assumed a new obligation — to find a purchaser. The fact that he already was negotiating with a purchaser did not make this any less of an obligation.

Assuming, however, that it is reasonable to construe Mr. Imperato’s allegations to assert a waiver by the bank, the affidavit and the letter submitted indicate that the bank adequately notified Mr. Imperato of its intention to withdraw any prior waivers. Even crediting Mr. Imperato’s statement to the effect that the bank waived its right to foreclose during the telephone conversation, the letter submitted by the defendant indicates that the bank was withdrawing all previously made waivers, including any made in the course of that telephone conversation. Thus, it is clear that this affirmative defense cannot stand because, as stated by the majority, “[in] a foreclosure action based on nonpayment, the mortgagee’s oral waiver of the right to accelerate the principal and foreclose * * * constitutes a valid affirmative defense to foreclosure, absent withdrawal of the waiver upon reasonable notice to the mortgagor.” I fail to perceive what more notification would or should be necessary to withdraw this alleged waiver.

Viewed in any of these postures, the allegations of the defendant assert an oral executory agreement which either violates the no oral change provision in the agreement or violates section 15-301 of the General Obligations Law because it constitutes a modification of the contract. To hold, as the majority does, defeats both the intent of the parties and that of the Legislature. But even if the majority’s interpretation is to be totally adopted, the facts presented by the defendant clearly indicate that he was notified of the bank’s withdrawal of any and all previous waivers. The majority’s interpretation means that, in the future, no lending institution, however carefully and precisely it may word its mortgage documents, will be able to protect itself against claims that one of its sympathetic officers has orally waived its right to foreclose the mortgage, no matter how specious the claim may be. I believe today’s holding will have a profound effect in the sphere of commercial and contractual transactions and will, I trust, invoke immediate legislative reply.

Chief Judge Cooke and Judges Gabrielli, Wachtler and Fuchsberg concur with Judge Meyer; Judge Jasen dissents and votes to affirm in a separate opinion in which Judge Jones concurs.

Judgment appealed from and order of the Appellate Division brought up for review reversed, with costs, and the order of Supreme Court, Westchester County, dated October 31, 1979, reinstated. 
      
      . The section provides: “An agreement, promise or undertaking to change or modify, or to discharge in whole or in part, any contract, obligation, or lease, or any mortgage or other security interest in personal or real property, shall not be invalid because of the absence of consideration, provided that the agreement, promise or undertaking changing, modifying, or discharging such contract, obligation, lease, mortgage or security interest, shall be in writing and signed by the party against whom it is sought to enforce the change, modification or discharge, or by his agent.”
     
      
      . The contention in the dissent that a contracting party has no way to protect himself against a specious claim of waiver is only partially true, for on a trial the fact finder will determine the credibility of the waiver claim. Any argument that the provision of the extension agreement should be sufficient to bar an oral waiver as well as oral modification or termination should be addressed to the Legislature. The Uniform Commercial Code provision above referred to suggests that legislative policy is to the contrary, however, and in light of that fact we certainly would not be warranted in extending subdivision 1 of section 15-301 as the dissent argues. The suggestion in the dissent (pp 191-192) that the January 12, 1979 letter indicated that the bank was withdrawing all waivers including any in the course of the telephone conversation it referred to is not borne out by the letter which speaks of the bank’s patience but uses no language of waiver. Incorrect also is the'dissent’s characterization of subdivision 4 of section 15-301 of the General Obligations Law (p 190); that subdivision speaks not to “oral changes” but only to “termination or discharge.”
     
      
      . The Montrose brief suggests that once it has had the opportunity for discovery it may be able to turn up a writing meeting the requirements of the subdivision.
     
      
      . Although costs are awarded, we take the occasion to note that they could well have been denied by reason of appellants’ failure to comply with CPLR 5529 (subd [al, par 3). That paragraph requires that reproduction by facsimile be “in clear type of no less than elite in size.” The guarantees reproduced at pages 50-53 of the record are in very much smaller type and reproduced so poorly as to be in good part unreadable. The extension agreement at pages 54-56 of the record while slightly larger and partly readable do not conform with the rule. We point out the problem not only for the guidance of counsel in this case but also for the attention of the Bar and legal printers in general and to make known that future such cases may result in denial or imposition of costs, as appropriate, or in extreme cases in refusal to receive the record or brief for filing (cf. Slater v Gallman, 38 NY2d 1, 4-5).
     