delivered the opinion of the Court:
All the assigned property had been sold and the proceeds-were in the possession of the assignee before any distribution was ordered. The sale included the mortgaged property as well as that not subject to priority of liens. The court recognized the right of the secured claims to be first paid out of the mortgaged property. The secured claims were the note secured by the mortgage of June 2, 1892, and the divers claims secured by the mortgage of June 21, 1892. The mortgaged property, when sold, paid in full the note secured by the mortgage of June 2, together with the expense incident to seizing the same before the execution of the deed of assignment, aggregating the sum of $5,339.10. This sum constituted a part of the claim proven by appellant, which amounted to the sum of $11,113.10. And the question presented by this record is whether the appellant shall receive a dividend on the sum of $11,113.10, or on that sum less $5,339.10 paid in full. It is insisted by appellant, that that part of section 6 of the act concerning voluntary assignments, which provides that: “The said court shall order the assignee or assignees to make from time to time fair and equal dividends among the creditors of the assets in his or their hands, in proportion to their claim,” etc., gives the appellee a right to a dividend on the amount of' his whole claim; and it is urged that the decision of this court, In re Bates, 118 Ill. 524, is conclusive of that question. In the Bates case, the insolvents were indebted to Annie G. Paddock in the sum of $1,000.00, and had executed a mortgage to secure the indebtedness. After the assignments, her claim was filed and proven in the sum of $1,017.00. The value of the property mortgaged was $765.75, and the court ordered that she be paid a pro rata dividend on the excess of her claim over the value of the: mortgaged property, and a like per cent on the value of the mortgaged property should be retained by the assignee until the creditor had realized on the mortgaged property. This court held: “After the assignment, she could claim her dividend on her whole debt out of the general assets of' the estate, though possessed of a special security,” and after a full discussion and examination of the authorities held the rule to be, in the settlement of insolvent estates, that the creditor should be allowed to prove his whole debt, without regard to any collateral security he might hold, and should be paid pro rata dividends on his whole debt. The question was again before this court in reference to-claims against an insolvent estate, in Furness et al. v. Union-Natl. Bank, 147 Ill. 570. The facts of that case were, that the creditor held two notes, both secured by a certain, collateral, and it was there held: “It makes no difference, in the application of the rule permitting an allowance of the full claim and dividends upon the full claim as so? allowed, whether the allowance by the court is a judgment or not, or whether it draws interest or not. In case of' insolvency, the claims to be paid pro rata are the claims-allowed.” In Yates et al. v. Dodge, Fxr., 123 Ill. 50, a similar question was before this court, and it was held: “Whatever dividend he might receive from the general assets in the hands of the assignee would be applied to the-reduction of his claim, and whatever surplus might remain after applying'it to the claim as thus reduced, the proceeds of the real estate under the judgment in the attachment-, proceedings would belong to the assignee, to be used for the benefit of the other creditors.” In each of these cases, there was a single claim, one debt—secured by certain collateral; and the facts are different from those in this record. The rule of law announced in the foregoing cases is applicable, however. Here, appellant has two classes of debts—one, a note secured by collateral, sufficient to pay that debt in full; the other, a debt evidenced by several notes, secured by collateral that pays on that debt a prorata dividend of 14§ per cent, and a distribution is further* made from the proceeds of property not mortgaged. As filed in the County Court as a claim against the insolvent estate, they are consolidated, and it is urged that they constitute one claim. In the administration of insolvent estates the County Court may exercise equitable powers, and may examine into and segregate claims made up of different items, and make a distribution thereon that will avoid preferences and unjust advantage. By the payment of the debt of $5,339.10, it was extinguished as a debt. It had no existence as a claim after such payment, and could not enter into any claim as a part thereof and be a basis for adding to the distributive amount of another claim, or another item going to make up the whole claim. To do so, would be to give such other part of a claim an advantage byway of preference. If the assignee, instead of paying that claim in full out of the proceeds of the mortgaged chattels, had retained in his hands a sum sufficient to pay the claim in full, and had paid 18 per cent on the whole claim proven by appellant, then on this whole claim of $11,113.10 there would have been paid $2,000.35. The proportionate part paid on the debt with the prior lien, $5,339.10, would have been $961.03. With this sum paid on that debt, out of assets derived from the sale of the mortgaged property, the residue could have been paid in full, and there would have remained in the hands of the .assignee $961.03 to be distributed on other claims.
Because of its being proven as a part of a claim, one of several items going to make up the whole claim, does not destroy its character in equity as a separate debt. It can not be held, after its payment, it has any existence to receive a proportionate dividend, or add to the dividends to be paid on the other items of the claim.
The County Court erred in ordering that each creditor should -be paid a dividend upon the full amount of his ■claim as the same was proven, after ordering an item constituting a part of appellant’s claim paid in full. There was no error on the part of the Appellate Court in reversing and remanding that order. The judgment of the Appellate Court is affirmed.
Judgment affirmed.