diff --git a/compiler/cgen.nim b/compiler/cgen.nim
index a456b7d51..3982f60cc 100644
--- a/compiler/cgen.nim
+++ b/compiler/cgen.nim
@@ -945,11 +945,12 @@ proc allPathsAsgnResult(n: PNode): InitResultEnum =
     # assignment this is not good enough! The only pattern we allow for
     # is 'finally: result = x'
     result = InitSkippable
-    for it in n:
-      if it.kind == nkFinally:
-        result = allPathsAsgnResult(it.lastSon)
+    allPathsInBranch(n[0])
+    for i in 1..<n.len:
+      if n[i].kind == nkFinally:
+        result = allPathsAsgnResult(n[i].lastSon)
       else:
-        allPathsInBranch(it.lastSon)
+        allPathsInBranch(n[i].lastSon)
   else:
     for i in 0..<n.safeLen:
       allPathsInBranch(n[i])
diff --git a/tests/destructor/tnewruntime_misc.nim b/tests/destructor/tnewruntime_misc.nim
index e6be5824d..025383565 100644
--- a/tests/destructor/tnewruntime_misc.nim
+++ b/tests/destructor/tnewruntime_misc.nim
@@ -7,6 +7,7 @@ axc
 0  new: 0
 ...
 destroying GenericObj[T] GenericObj[system.int]
+test
 '''
 """
 
@@ -117,3 +118,19 @@ proc main12() =
   echo "..."
 
 main12()
+
+#####################################################################
+## bug #12827
+type
+  MyObject = object
+    x: string
+    y: seq[string]
+    needs_ref: ref int
+
+proc xx(xml: string): MyObject =
+  let stream = xml
+  result.x  = xml
+  defer: echo stream
+
+ 
+discard xx("test")