HUNT, Circuit Judge
(after stating the facts as above). We pass extended notice of questions of practice presented by appellees by saying that while in the first decision of the Supreme Court of the territory the court, in a sense, determined the law applicable to the Mokuleia leasehold, still the decree was not final or appealable, and ,no decree was made which became final in form until after the second appeal. Rumsey v. New York Life Ins. Co. (C. C. A.) 267 Fed. 554. We therefore consider appellants’ main assignments of error as presenting for consideration the questions: (1) Whether the net rents or part of them, received from the Mokuleia leasehold, are corpus; and (2) whether the correct method was pursued in determining what portions, if any, of the net rents from the leaseholds are corpus.
It is argued by the appellants that the will is free from ambiguity,' that parol evidence was not admissible to show the intent of the testator against the construction on the face of the will, and that the state of his property at the time of his death cannot be resorted to to explain testator’s intention. We are unable to agree with the appellants that the will is clear and “singularly free from ambiguity” and therefore speaks for itself. No real estate was involved; all the assets were perishable or wasting, but under the will there was the clause directing the conveyance of the trust estate, with all additions and increase thereto to the grandchildren. It was therefore natural that counsel for the trustees should question the acts of his clients in construing the will as requiring that all of the net rentals should be paid to the life tenants without making provision for the preservation of the corpus of the estate for the benefit of the remaindermen. It is our duty, therefore, to follow that “first and great rule,” what was the intention of the testator ? Let us endeavor to put ourselves in the situation of Mr. Gay when he made his will, and from that position gather what he intended. Adams v. Cowen, 177 U. S. 471, 20 Sup. Ct. 668, 44 L. Ed. 851.
At the time of his death testator had a wife and seven children, ranging in age from 4 to 16. Testator lived with his family on the Mokuleia ranch, and, as already shown, his personal property, excluding the leaseholds, was of small value; his cash was about $816. Testator carried on the business of ranching and sublet various parts of the Mokuleia estate from which he received rentals. Referring to the Ookala lease, testator had a sublease with a sugar company; the lease yield[724]*724ing certain percentage rentals of the sugar produced upon the land. About the time of the death of Mr. Gay, the gross annual rentals from the subleases of portions of the Mokuleia property amounted to less than $3,000, out of which he was obliged to pay a head rent of $1,250 to his lessor. This left a very limited sum. The receipts from the Ookala lease for the year just before the death of Mr. Gay were $643, and the taxes were about $40. During 1893-94 the lease yielded gross $642; in 1894-95, gross $851. At the time of the death of the testator the lessee Under the Ookala lease had possesssion for 12 years, and but 7 years were left under the sugar contract. While it is true that in after years the profits from the Ookala lease increased very materially, still during the first 7 years of the trust the average amount received from that lease was about $1,400. No definite amount can be ascertained of other revenue received by Mr. Gay from the ranching business, but taking the business as conducted by the trustees during the first seven years of the trust, the average net return on the Mokuleia property was less than $1,000 per annum, after including income from alk sources at Mokuleia and from the subleases, sale of cattle, and ranch profits generally. The widow and children lived on the ranch until 1895, when the widow died, and the children were taken away. At the time of the death of the testator he owed about $5,000. In the inventory the value of the Mokuleia leasehold was $7,500, and of the Ookala leasehold $5,000. . The evidence is that about the time of testator’s death the sugar business was undeveloped. That Mr. Gay expected hjs trustees to go ahead with the business of ranching and stock raising at Mokuleia is evidenced by the specific statement t.o that effect in his will, and there is nothing to show that he believed there would be such development in the raising of sugar as that some of his grazing land would become more valuable for sugar raising than for stock. Another circumstance is that Mr. Gay was mortally ill when he made his will. It is in evidence that he knew of the seriousness of his illness and that on May 24 he asked his physician to bring Mr. Brown “to make a new will.” He executed the will in question on the 25th, and died on the 28th.
Enough has been shown to impel the belief that by the direction to the trustees to pay the rents, income, issues, and profits arising from and out of the trust estate to his wife and children, testator wished to provide for the maintenance of his large family out of the estate he would leave. How were his children to be supported unless the trustees complied with the testator’s will, and went on with the ranch business so long as it could be done profitably? The pressing anxiety and the concern most natural and uppermost in the mind of one in the circumstances surrounding testator would be for his family, his wife and seven children—concern for future grandchildren was more remote.
It is not possible to accept the contention that the doctrine of equitable conversion is applicable. The wish and direction of the testator to the trustees to “conduct and carry on the business of ranching and stock raising at Mokuleia” pertain to the business that Mr. •Gay had followed, out of which he was receiving an income by treat[725]*725ing the subrentals as available for operating costs and expenses. Testator understood that the Mokuleia lease was to exist for a limited term and was of wasting kind; yet, if the ranch business could be carried on profitably and without loss,- the trustees were to conduct that enterprise. Conversion was inconsistent with going on with the business if profitable. Testator meant that the lease was to be held, the wasting away thereof not being looked upon as loss. Pickup v. Atkinson, 4 Hare, 624. Appellants give special weight to the clause empowering the trustees at any time when, in their discretion, they think a sale would by reinvestment of money received from sale be beneficial and inure to the benefit of the trust estate created under the will, to sell and convey the Mokuleia property free and barred of the trust created. Those words, however, do not express or imply direction that the original form of the property shall be changed. Testator distinctly gave discretion to sell when in the conduct and management of the business the trustees. might believe it advantageous to sell. In this clause distinct reference is made to a sale of all the property at Mokuleia. We cannot agree with appellants that—
“For tbo purpose of carrying out the direction to carry on the business, and ¡of choosing the best tim°e to sell, after the trustees cease to carry on the business because they cannot do so profitably, they must retain it, but for no other purpose.”
The discretion is not merely as to the time and manner of making a sale,-but is broader in its scope, for it empowers the trustees at any time when in their discretion
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HUNT, Circuit Judge
(after stating the facts as above). We pass extended notice of questions of practice presented by appellees by saying that while in the first decision of the Supreme Court of the territory the court, in a sense, determined the law applicable to the Mokuleia leasehold, still the decree was not final or appealable, and ,no decree was made which became final in form until after the second appeal. Rumsey v. New York Life Ins. Co. (C. C. A.) 267 Fed. 554. We therefore consider appellants’ main assignments of error as presenting for consideration the questions: (1) Whether the net rents or part of them, received from the Mokuleia leasehold, are corpus; and (2) whether the correct method was pursued in determining what portions, if any, of the net rents from the leaseholds are corpus.
It is argued by the appellants that the will is free from ambiguity,' that parol evidence was not admissible to show the intent of the testator against the construction on the face of the will, and that the state of his property at the time of his death cannot be resorted to to explain testator’s intention. We are unable to agree with the appellants that the will is clear and “singularly free from ambiguity” and therefore speaks for itself. No real estate was involved; all the assets were perishable or wasting, but under the will there was the clause directing the conveyance of the trust estate, with all additions and increase thereto to the grandchildren. It was therefore natural that counsel for the trustees should question the acts of his clients in construing the will as requiring that all of the net rentals should be paid to the life tenants without making provision for the preservation of the corpus of the estate for the benefit of the remaindermen. It is our duty, therefore, to follow that “first and great rule,” what was the intention of the testator ? Let us endeavor to put ourselves in the situation of Mr. Gay when he made his will, and from that position gather what he intended. Adams v. Cowen, 177 U. S. 471, 20 Sup. Ct. 668, 44 L. Ed. 851.
At the time of his death testator had a wife and seven children, ranging in age from 4 to 16. Testator lived with his family on the Mokuleia ranch, and, as already shown, his personal property, excluding the leaseholds, was of small value; his cash was about $816. Testator carried on the business of ranching and sublet various parts of the Mokuleia estate from which he received rentals. Referring to the Ookala lease, testator had a sublease with a sugar company; the lease yield[724]*724ing certain percentage rentals of the sugar produced upon the land. About the time of the death of Mr. Gay, the gross annual rentals from the subleases of portions of the Mokuleia property amounted to less than $3,000, out of which he was obliged to pay a head rent of $1,250 to his lessor. This left a very limited sum. The receipts from the Ookala lease for the year just before the death of Mr. Gay were $643, and the taxes were about $40. During 1893-94 the lease yielded gross $642; in 1894-95, gross $851. At the time of the death of the testator the lessee Under the Ookala lease had possesssion for 12 years, and but 7 years were left under the sugar contract. While it is true that in after years the profits from the Ookala lease increased very materially, still during the first 7 years of the trust the average amount received from that lease was about $1,400. No definite amount can be ascertained of other revenue received by Mr. Gay from the ranching business, but taking the business as conducted by the trustees during the first seven years of the trust, the average net return on the Mokuleia property was less than $1,000 per annum, after including income from alk sources at Mokuleia and from the subleases, sale of cattle, and ranch profits generally. The widow and children lived on the ranch until 1895, when the widow died, and the children were taken away. At the time of the death of the testator he owed about $5,000. In the inventory the value of the Mokuleia leasehold was $7,500, and of the Ookala leasehold $5,000. . The evidence is that about the time of testator’s death the sugar business was undeveloped. That Mr. Gay expected hjs trustees to go ahead with the business of ranching and stock raising at Mokuleia is evidenced by the specific statement t.o that effect in his will, and there is nothing to show that he believed there would be such development in the raising of sugar as that some of his grazing land would become more valuable for sugar raising than for stock. Another circumstance is that Mr. Gay was mortally ill when he made his will. It is in evidence that he knew of the seriousness of his illness and that on May 24 he asked his physician to bring Mr. Brown “to make a new will.” He executed the will in question on the 25th, and died on the 28th.
Enough has been shown to impel the belief that by the direction to the trustees to pay the rents, income, issues, and profits arising from and out of the trust estate to his wife and children, testator wished to provide for the maintenance of his large family out of the estate he would leave. How were his children to be supported unless the trustees complied with the testator’s will, and went on with the ranch business so long as it could be done profitably? The pressing anxiety and the concern most natural and uppermost in the mind of one in the circumstances surrounding testator would be for his family, his wife and seven children—concern for future grandchildren was more remote.
It is not possible to accept the contention that the doctrine of equitable conversion is applicable. The wish and direction of the testator to the trustees to “conduct and carry on the business of ranching and stock raising at Mokuleia” pertain to the business that Mr. •Gay had followed, out of which he was receiving an income by treat[725]*725ing the subrentals as available for operating costs and expenses. Testator understood that the Mokuleia lease was to exist for a limited term and was of wasting kind; yet, if the ranch business could be carried on profitably and without loss,- the trustees were to conduct that enterprise. Conversion was inconsistent with going on with the business if profitable. Testator meant that the lease was to be held, the wasting away thereof not being looked upon as loss. Pickup v. Atkinson, 4 Hare, 624. Appellants give special weight to the clause empowering the trustees at any time when, in their discretion, they think a sale would by reinvestment of money received from sale be beneficial and inure to the benefit of the trust estate created under the will, to sell and convey the Mokuleia property free and barred of the trust created. Those words, however, do not express or imply direction that the original form of the property shall be changed. Testator distinctly gave discretion to sell when in the conduct and management of the business the trustees. might believe it advantageous to sell. In this clause distinct reference is made to a sale of all the property at Mokuleia. We cannot agree with appellants that—
“For tbo purpose of carrying out the direction to carry on the business, and ¡of choosing the best tim°e to sell, after the trustees cease to carry on the business because they cannot do so profitably, they must retain it, but for no other purpose.”
The discretion is not merely as to the time and manner of making a sale,-but is broader in its scope, for it empowers the trustees at any time when in their discretion they think a sale of all the property would by reinvestment of the money realized from such sale be beneficial to the trust estate created, to sell and convey. Thus it was within their discretion to make a sale or not, as they might deem wise, without imperative direction to convert. The general rule is firmly settled that in order to work a conversion while the property is yet actually unchanged in form, there must be a clear and imperative direction in the will to convert. Pomeroy’s Equity, § 1160, says:
“If the act of converting—that is, the act itself of selling the land, or of laying out the money in land—is left to the option, discretion or choice of the trustees, or other parties, then no equitable conversion will take place, because no duty to make the change rests upon them.” Hemenway v. Hemenway, 134 Mass. 446; Hobson v. Hale, 95 N. Y. 605; Sauerbier’s Estate, 202 Pa. 187, 51 Atl. 751.
In some of the controversies which have arisen between claims of remaindermen and life tenants there are recognitions of presumptions whereby intentions are implied. In Lovering v. Minot, 9 Cush. (Mass.) 151, Chief Justice Shaw said that it was contrary to the presumed intent of the testator to narrow the benefit intended for the first object of his bounty, for the benefit of an object more remote. Barber v. Pittsburg R. Co., 166 U. S. 83, 17 Sup. Ct. 488, 41 L. Ed. 925; Alexander on Wills, § 808. Howe v. Dartmouth (1802) 7 Ves. 137, cited by appellants as the leading case, has been recently commented upon by the Chancery Division on appeal (Re Evans Will Trusts, [1921] 2 Ch. Div. 309), with the statement that the principle as declared in Howe v. Dartmouth was that where the residue or bulk of the property is left [726]*726by the testator en masse and is given to several in succession as tenants for life and remaindermen, the duty of the court is to make effective the apparent intention of the testator. Justice Eve, for the court, asked how the apparent intention of the testator is to be ascertained where no particular directions have been given, and among other things said:
“It is equally clear that if a person gives certain properties specifically to one person for life with remainder over afterward, then although there is a danger that one object of his bounty will be defeated by the tenancy for life, lasting as long as the property endures, yet there is a manifestation of intention which the court cannot overlook.” Pickering v. Pickering, 4 Myl. & C. 289.
Direction to the trustees to pay the share or portion of the income belonging to any child who may die to the surviving heirs of such, child dying does not call for a construction at variance with that we have given. Testator placed in trust all of his estate, real, personal, or mixed, and then created the trust to pay the rents, income, issues, and profits arising from and out of his “said estate” to his wife for life, to be applied by her for the support of herself and the children. The testator had in mind the estate he first mentioned, which consisted of personal property, stock, and leases.0 Rentals, income, and profits from the leases are to be distinguished from the leases which have not been converted.^ He continued the trust by providing that after the death of the wife the trustee was to pay “the rent, income, issues and profits” arising from and out of “said trust estate” for the support and maintenance of his sons and daughters. “Said trust estate” meant the same estate which he had put in trust by the disposing words of his will. Subsequent clauses which directed that after the death of all of his children his trustee should convey one-half of said trust estate and all additions or increase thereto unto the children of his sons relate to the estate left in trust. In Bowden v. Bowden, 17 Sim. 64, the testator gave all of his leaseholds and other estates and effects to trustees for the benefit of his wife, daughters, and the children of his daughters, using the words “rents, issues, dividends and annual proceeds.” He empowered his trustee to sell his leaseholds and to invest the proceeds on mortgage of freehold or other leasehold estate, and to lease any part of his estate. In behalf of the widow it was urged that the leaseholds, the principal part of the trust property, should be sold. The vice chancellor held that the leaseholds should not be sold. In re Nicholson, 2 Ch. Div. 111. In Chambers v. Chambers, 15 Sim. 183, holding a different view, in the language of the trust, the word “rents” was confined to freehold. Here there was nothing in the Gay estate to produce rentals except the subleases, from which he was deriving funds for the conduct of his ranch business and for the support and maintenance of himself and his family. Eewin on Trusts, star p. 809. The fact that a leasehold may be coming to an end does not change the result. Instances where life tenants may mine are not rare. Higgins Oil & F. Co. v. Snow, 113 Fed. 433, 51 C. C. A. 267, and cases cited in note to Deffenbaugh v. Hess, 36 L. R. A. (N. S.) 1105. Nor is the case altered by the fact that about 1906 the trustees stopped carrying on the ranch business. In their discretionary power [727]*727they could have sold at any time, or held, or sublet. Gray v. Siggers (1872) 15 Ch. Div. 74; Vachell v. Roberts, 32 Beav. 140; Cafe v. Bent, 5 Hare, 24; In re Pitcairn (1895) 2 Ch. Div. 199.
x-\ppellants urge that under any circumstances the value of the subleases for the remainder of the term of the head lease after 1896 must be amortized, as was the sum received from the sale of the live stock and movable assets, and that such sum so realized should be held as corpus of the estate. The premise upon which this point is advanced is that the subleases were made for the whole term of the head lease, and therefore were in effect a sale or assignment of the head leases; but the leases (made a part of the record) were made to several different persons, and in some the rentals were not fixed at a definite sum of money, but were contingent upon the quantity of sugar produced on the premises. Furthermore the subleases were not made for the full term of the head lease, but ended a short time before the head lease expired, and each sublease had a reversionary clause for surrender to the sublessor prior to the termination of the head lease. Claims that there was an assignment are, therefore, necessarily defeated. Washburn on Real Property, §§ 692, 693, 694; Murdock v. Fishel, 67 Misc. Rep. 122, 121 N. Y. Supp. 624. We conclude that the trustees, having acted in good faith in the exercise of their discretion, will be protected in their acts with respect to the Mokuleia leasehold and the payments of the rents therefrom to the life tenants.
No appeal having been taken from the decree of the Supreme Court by the life tenants or the trustees, they will not be heard to say that the Supreme Court was in error in holding that there is a distinction between the proper construction to be put upon the will as to the two leases. We are therefore limited to the second question presented by appellants; that is, as to the method of ascertaining the corpus or capital value of the Ookala leasehold. Sanborn-Cutting Co. v. Paine, 244 Fed. 672, 157 C. C. A. 120; Guaranty Co. v. Phoenix Ins. Co., 124 Fed. 170, 59 C C. A. 376.
The circuit judge in Hawaii ascertained the rentals produced by that particular leasehold from the time of the death of the testator to the expiration of the lease, and after finding the true actuarial value of the leasehold in 1893, directed the trustees to set aside the amount so found as capital, or corpus, of the estate. The opinion of the Supreme Court states how the apportionment of the sums'representing income for the life tenants and capital for the remaindermen was made.
“In order to arrive at that value, each installment of rent received by the trustees from said leasehold was considered to be part income and part capital. To determine what portion of each installment of rent constituted capital, calculations were made by the actuary to ascertain what sum put out at 6 per cent, interest, with annual rests, on the date of the testator’s death, would amount to each installment actually received at the time it was received. Each installment was figured separately, and the sum of the amounts thus ascertained equals the value found by the circuit judge.”
The rule adopted by the circuit judge was considered in Kinmonth v. Brigham, 5 Allen (Mass.) 270, and became very fair in its applicability to the case, where, as the Supreme Court of the territory has said:
[728]*728“It is obviously difficult * * * to determine what was the value of the investment at the testator’s decease, by any other mode than a computation based upon the whole product ultimately realized from it.”
Similar methods of arriving at correct results are approved in Underhill on Trusts and Trustees, pp. 236, 237, 244; Lawrence v. Littlefield, 215 N. Y. 561, 109 N. E. 611; and in the recent case In re Hollebone (1918) 2 Ch. Div. 93.
The decree is affirmed. Costs of this appeal to be paid one-half by appellants; one-half by appellees.