## Facts

- Troy McNeill and his wife owned a home in a residential subdivision subject to recorded restrictive covenants limiting lots to residential use.
- The Arkansas State Highway Commission acquired adjoining lots within the same subdivision (not the McNeills’ lot) to build a cloverleaf highway interchange.
- The McNeills alleged the interchange would decrease their property’s market value by about $10,000 due to proximity effects and because using restricted lots for a highway would violate the covenants benefiting their lot.
- They sought an injunction requiring the Commission to post a bond to secure any damages later awarded.
- The trial court rejected recovery for general depreciation from highway proximity but awarded damages on the theory that the Commission’s nonresidential use of other restricted lots violated the covenants and caused compensable harm.
- The Commission appealed the damages award.

## Issues

1. Whether a landowner whose property is not taken is entitled to compensation for depreciation caused by a nearby highway when the injury is the same kind as that suffered by the public generally, though greater in degree.
2. Whether a lot owner benefitted by residential-use restrictive covenants is entitled to compensation when the State acquires other lots burdened by those covenants and uses them for a highway, thereby diminishing the benefitted lot’s value.

## Decision

- The Arkansas Supreme Court reversed the damages award and remanded with directions to dismiss the claim for damages.
- The court reaffirmed that, absent a taking, an owner cannot recover for injuries of the same kind as those sustained by the public generally, even if the owner’s injury is greater in degree.
- The court held that the State’s violation of restrictive covenants on neighboring lots, by itself, did not amount to a compensable taking or compensable damage to the McNeills’ property.

## Legal Principles

- When no portion of a claimant’s land is taken, compensation is unavailable for diminution in value and related harms that are of the same kind as those suffered by the public generally, even if more severe for the claimant.
- Restrictive covenants may create enforceable rights among private parties, but breach of such covenants by the State’s public use of other parcels does not, without more, create a constitutional or statutory right to compensation in eminent domain.
- Compensation generally requires either a direct taking of the claimant’s property or a special injury different in kind from that experienced by the public.

## Conclusion

The court limited compensation in highway projects to situations involving a taking or a special, distinct injury, holding that neither general proximity-related depreciation nor the loss of value attributed to the State’s nonconforming use of other covenant-burdened lots is compensable.


Ark. State Highway Comm'n v. McNeill, 381 S.W.2d 425 (Ark. 1964)