Ich habe mit dem Hasen gewettet, dass ich schneller laufen KANN als er.
Is there any reason why in the subordinate part of this sentence "als er" follows "laufen kann" instead of preceding it? Isn't the conjugated verb supposed to be in the last position in a subordinate clause?
Good question.
Technically, I believe that you are correct, that the subordinate clause should be "dass ich schneller ALS ER laufen kann," in the context of a whole sentence. But this usage is considered a bit "heavy" even by Germans.
So the native speaker treats it as two separate clauses. 1) dass ich schneller laufen kann and 2) als er. In this context, the verb phrase "laufen kann" finishes the first clause (thought), and "als er" begins a second clause/thought in the same sentence. It goes back to the idea of putting the verb phrase at the end of the CLAUSE, not at the end of the sentence.
This effectively breaks up the one subordinate clause into two separate clauses, so that one can keep the two thoughts separate. Even in English, "so that I can run faster/ than he," (two clauses) reads more smoothly than "so that I can than he run faster" (one connected clause). Spoken German "follows" the first pattern (reluctantly), even though the rules call for the second.
This looks like a completely arbitrary decision to me. The problem is, that the action is composite (schneller laufen), but schneller is also a comparative, where one may want to have the comparison object follow soon.
It has to be decided from the context, whether laufen is already more clear (and therefore can be somewhat postponed) or, as in this case, the competitor (already mentioned, even if only as the one making the bet). The second variant also has the advantage in spoken language, that the emphasis steadily increases, reaching the maximum at als er and then ebbing off. In the other case the trailing als er would receive a secondary emphasis.
P.S. The tale Der Hase und der Igel is originally recorded in Low German, so the Grimm brothers can't be made responsible for the sentence given.
While in principle the conjugated verb comes last in a subordinate clause, there are various circumstances where a certain part of the sentence can follow this verb. One of those is a comparitive clause with wie or als, see canoo for details and examples (and for more circumstances where this is allowed).
In addition, you can also interpret your example as a shortening of "..., dass ich schneller laufen kann als er laufen kann." The rule for such shortenings is that repeated words can be omitted, but the word order doesn't change.
