Seelenfreund

This case comes before us upon the sustaining of a demurrer to the complaint without leave to amend. Plaintiff in the court below has appealed from the judgment of dismissal thereupon entered.

In 1974, appellant hired respondent to make a termite inspection of certain premises that appellant was in the process of buying. The inspection and report were made in February 1974. Appellant then purchased the property. In February 1976, appellant had respondent make another termite inspection. This 1976 inspection disclosed a number of problems which had not been reported in the 1974 inspection but which allegedly existed then.

In 1977, appellant filed a complaint against respondent, alleging a negligent breach of an oral contract. Respondent demurred on the ground that the cause of action was barred by the two-year statute of limitations. (Code Civ. Proc., § 339, subd. 1.) Both sides agree that two years is the applicable time period. They disagree as to when the two years began to run.

We hold that the statute of limitations began to run when appellant knew or should have known that the contract had been negligently breached.

A statute of limitations starts to run upon the…