## Facts

- William M. Stem, Jr. bought a used BMW from Grady W. Braden for $6,600 after Braden stated, to the best of his knowledge, the car had not been wrecked and was in good condition.
- Within about a week, Stem found a disconnected plug under the dashboard; reconnecting it activated an oil sensor warning light.
- An inspection revealed serious undisclosed defects, including that the vehicle was welded from the front end of a 1979 BMW and the rear end of a 1975 BMW, the oil sensor light had been disabled, and the speedometer had been inoperative for about three and one-half months during Braden’s ownership.
- Further investigation indicated the front half had been driven about 170,000 miles, though Stem believed the car had about 70,000 miles.
- On March 10, 1987, Stem notified Braden by letter that he refused the car and intended to rescind the sale.
- Stem nonetheless continued using the car; by the time he sued about seven months later, he had driven nearly 9,000 miles.
- After an ore tenus bench trial, the trial court found Braden failed to disclose the disconnection of the oil sensor light and the speedometer problem, and that the car had been wrecked and reconstructed by welding two vehicles together.

## Issues

1. Whether a buyer who gives timely notice of rescission/revocation loses the remedy as a matter of law by continuing to use nonconforming goods after notice under Ala. Code §§ 7-2-606 and 7-2-608.
2. Whether post-notice use is “wrongful” under Ala. Code § 7-2-602(2)(a) in a way that automatically extinguishes rejection or revocation rights.

## Decision

- The Supreme Court of Alabama reversed the Court of Civil Appeals and reinstated the trial court’s judgment for Stem.
- The court held that continued use after notice did not, as a matter of law, bar revocation/rescission under Article 2.
- The court treated the effect of post-notice use as a fact-sensitive inquiry, including whether the buyer’s conduct was reasonable in light of necessity and the nature of the nonconformity.
- The ore tenus findings supported that the defects substantially impaired the car’s value to the buyer and justified revocation/rescission.
- The court indicated that continued use may affect the remedy (including possible offsets) rather than automatically converting the transaction into an acceptance that defeats revocation.

## Legal Principles

- Under Ala. Code § 7-2-608, a buyer may revoke acceptance when nonconformities substantially impair the value of the goods to the buyer and the buyer provides timely notice.
- Continued use of goods after notice of rejection or revocation is not an automatic bar to revocation; it is relevant to the reasonableness of the buyer’s conduct and the form of relief.
- “Wrongful” exercise of ownership under Ala. Code § 7-2-602(2)(a) and “acts inconsistent with the seller’s ownership” under Ala. Code § 7-2-606 are applied contextually rather than as rigid rules that categorically defeat revocation.
- When a trial court resolves disputed facts after ore tenus testimony, appellate courts generally defer to those findings absent clear error, and should not reweigh the evidence.

## Conclusion

The court reinstated rescission and restitution for the buyer, holding that necessary continued use of a substantially nonconforming automobile after timely notice did not automatically defeat UCC revocation and was for the trial court to evaluate on the facts, with potential adjustment of relief rather than forfeiture of the remedy.


Ex parte Stem, 571 So. 2d 1112 (Ala. 1990)