[244]*244WARREN, J.
Plaintiffs, two of the residuary beneficiaries of a trust which has terminated, commenced this action for breach of trust, seeking declaratory relief and damages. They claim that defendant United States National Bank breached its duty as trustee by imprudently renewing a lease of real property, which was the principal trust asset, and by failing for seven years to require payment of a demand note which was also a trust asset. The trial court concluded that the trustee acted prudently and did not breach its duty and entered judgment for defendants. Plaintiffs appeal. We review de novo.
Paul Schatz (Senior) was the settlor of the inter vivos trust which this case concerns. The trust was created on March 12, 1971, and was funded with 403 shares of stock in Senior’s business, the Paul Schatz Furniture Company (Company), and the real property and furniture store building on N. E. 41st Avenue in Portland. Senior reserved the right to receive payments of income and to withdraw principal from the trust during his life as he directed. He executed a will on the same date as the trust. The will left Senior’s personal effects to his wife, his shares of stock in Company to his son, Paul Schatz, Jr. (Junior), and the residue to the trust. The trust provided that, after Senior’s death, Junior was to receive the remaining shares of stock in Company and the trustee was to pay to Senior’s wife all the income from the remaining assets and had authority to invade the principal to maintain her standard of living. After the wife’s death, the trustee was to distribute all the real property to plaintiffs, Senior’s two daughters, and to distribute the rest of the trust corpus equally among those two daughters and his son.
Shortly after executing the trust and the will, Senior executed a lease of the real property to Company. The lease was pre-dated to July 1, 1970, was for a five-year term and reserved a rent of $2,100 per month. The lease gave the lessee “four five-year successive options to renew this lease for an additional five years each upon the same terms and rental payments” upon giving the lessors written notice of intent to renew at least 120 days before the termination of the lease period. It also provided that “[t]ime and the punctual and exact performance and observance * * * of the conditions herein contained are of the essence of this lease.” The lease [245]*245also gave the lessee the right of first refusal if the lessors received an offer to purchase the building.
Another trust asset was a promissory note payable on demand for $36,548.98, dated March 1, 1971, from Company to Senior, which bore interest at seven per cent per year on the unpaid balance. After Senior’s death in October, 1973, the lease and interest on the note were the sole sources of his widow’s income from the trust. She died on August 31, 1980.
Plaintiffs first claim that the circumstances under which the trustee permitted Company to renew the lease in 1975 involved a breach of the trustee’s fiduciary duty. Company and Junior are also named as defendants in this action. The original lease term of five years expired on June 30,1975, and Company had until March 2, 1975, to give written notice of its intent to exercise its option to renew the lease. The bank did not receive that notice, and on June 11, 1975, the bank’s real estate trust officer first discovered the renewal option and became aware that Company had not yet exercised it. He then contacted Junior, informed him that the time to exercise the option had passed, and asked him to exercise the option. Junior did exercise the option for Company, by letter dated June 16, 1975. The trustee made no effort to renegotiate or terminate the lease, as it could have done because the lessee did not comply with the 120-day notice condition of the renewal option. Defendant’s trust officer testified that, before renewal, he had evaluated the reasonableness of the rent based on the return on investment and on comparable properties’ rentals and concluded that it was reasonable. He did not recall if he had conducted this evaluation before or after he contacted Junior.
Plaintiffs claim that the trustee breached its duties of prudent management1 and loyalty by failing to test the market to determine if it could obtain a lease which was more favorable to the beneficiaries when it had the opportunity. [246]*246They introduced evidence that the market rent for the premises was $3,340 per month on June 1, 1975. The trustee conceded, in closing argument, that $2,100 was below market value, but argued that it effectuated the settlor’s intent by waiving the 120-day notice requirement and renewing the lease. In order to establish the settlor’s intent, Bank offered double hearsay concerning Senior’s intent to perpetuate his business after his death. Plaintiffs assign error to the admission of this statement, to the court’s finding that the settlor intended that Company operate at the same location with the same rental for the entire 25 years of the lease and to the court’s concluding that Bank did not breach its fiduciary duties in renewing the lease.
When a will or a trust instrument is fully integrated and is not ambiguous on its face, extrinsic evidence is not admissible to establish the testator’s or settlor’s intent. Roehr v. Pittman, 256 Or 193, 472 P2d 278 (1970); Rowe v. Rowe, et al, 219 Or 599, 608, 347 P2d 968 (1959); Allen v. Hendrick, 104 Or 202, 212, 206 P 733 (1922). The trust instrument on its face was not ambiguous and did not indicate any purpose of Senior to favor Company. Bank argues that the trust and the lease were silent as to what Senior intended the trustee to do if the lessee failed to give the 120-day notice of renewal and that extrinsic evidence is admissible to establish his intent in this case. We do not agree. The lease unequivocally stated that “[t]ime and the punctual and exact performance * * * of the conditions * * * are of the essence of this lease.” The instruments do not indicate that the settlor intended the trustee to be lenient with regard to waiving the notice condition. If anything, they indicate the opposite. Because the instruments are not ambiguous as to the consequence of failure to comply timely with the lease conditions, extrinsic evidence as to the settlor’s contrary intent is not admissible.
The dissent argues that the extrinsic evidence is admissible to put the court in the position of the settlor to ascertain his intent. The court has no occasion to put itself in the settlor’s position when it construes a fully integrated, unambiguous trust document, because the intent of the settlor can be ascertained from the face of the document. ORS 42.220 and ORS 41.740 permit a court to consider the circumstances surrounding the execution of an agreement only when the agreement is ambiguous on its face or is not fully integrated. [247]*247Bonded Credit Co. v. Hendrix, 282 Or 35, 576 P2d 795 (1978); Webster et ux v. Harris, 189 Or 671, 677-78, 22 P2d 644 (1950). Resort to extrinsic evidence to make an unambiguous document ambiguous is not permissible, but that is the sole purpose of the dissent’s resort to it in this case. See Sund & Co. v. Flagg & Standifer Co., 86 Or 289, 299, 168 P 300 (1917).
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[244]*244WARREN, J.
Plaintiffs, two of the residuary beneficiaries of a trust which has terminated, commenced this action for breach of trust, seeking declaratory relief and damages. They claim that defendant United States National Bank breached its duty as trustee by imprudently renewing a lease of real property, which was the principal trust asset, and by failing for seven years to require payment of a demand note which was also a trust asset. The trial court concluded that the trustee acted prudently and did not breach its duty and entered judgment for defendants. Plaintiffs appeal. We review de novo.
Paul Schatz (Senior) was the settlor of the inter vivos trust which this case concerns. The trust was created on March 12, 1971, and was funded with 403 shares of stock in Senior’s business, the Paul Schatz Furniture Company (Company), and the real property and furniture store building on N. E. 41st Avenue in Portland. Senior reserved the right to receive payments of income and to withdraw principal from the trust during his life as he directed. He executed a will on the same date as the trust. The will left Senior’s personal effects to his wife, his shares of stock in Company to his son, Paul Schatz, Jr. (Junior), and the residue to the trust. The trust provided that, after Senior’s death, Junior was to receive the remaining shares of stock in Company and the trustee was to pay to Senior’s wife all the income from the remaining assets and had authority to invade the principal to maintain her standard of living. After the wife’s death, the trustee was to distribute all the real property to plaintiffs, Senior’s two daughters, and to distribute the rest of the trust corpus equally among those two daughters and his son.
Shortly after executing the trust and the will, Senior executed a lease of the real property to Company. The lease was pre-dated to July 1, 1970, was for a five-year term and reserved a rent of $2,100 per month. The lease gave the lessee “four five-year successive options to renew this lease for an additional five years each upon the same terms and rental payments” upon giving the lessors written notice of intent to renew at least 120 days before the termination of the lease period. It also provided that “[t]ime and the punctual and exact performance and observance * * * of the conditions herein contained are of the essence of this lease.” The lease [245]*245also gave the lessee the right of first refusal if the lessors received an offer to purchase the building.
Another trust asset was a promissory note payable on demand for $36,548.98, dated March 1, 1971, from Company to Senior, which bore interest at seven per cent per year on the unpaid balance. After Senior’s death in October, 1973, the lease and interest on the note were the sole sources of his widow’s income from the trust. She died on August 31, 1980.
Plaintiffs first claim that the circumstances under which the trustee permitted Company to renew the lease in 1975 involved a breach of the trustee’s fiduciary duty. Company and Junior are also named as defendants in this action. The original lease term of five years expired on June 30,1975, and Company had until March 2, 1975, to give written notice of its intent to exercise its option to renew the lease. The bank did not receive that notice, and on June 11, 1975, the bank’s real estate trust officer first discovered the renewal option and became aware that Company had not yet exercised it. He then contacted Junior, informed him that the time to exercise the option had passed, and asked him to exercise the option. Junior did exercise the option for Company, by letter dated June 16, 1975. The trustee made no effort to renegotiate or terminate the lease, as it could have done because the lessee did not comply with the 120-day notice condition of the renewal option. Defendant’s trust officer testified that, before renewal, he had evaluated the reasonableness of the rent based on the return on investment and on comparable properties’ rentals and concluded that it was reasonable. He did not recall if he had conducted this evaluation before or after he contacted Junior.
Plaintiffs claim that the trustee breached its duties of prudent management1 and loyalty by failing to test the market to determine if it could obtain a lease which was more favorable to the beneficiaries when it had the opportunity. [246]*246They introduced evidence that the market rent for the premises was $3,340 per month on June 1, 1975. The trustee conceded, in closing argument, that $2,100 was below market value, but argued that it effectuated the settlor’s intent by waiving the 120-day notice requirement and renewing the lease. In order to establish the settlor’s intent, Bank offered double hearsay concerning Senior’s intent to perpetuate his business after his death. Plaintiffs assign error to the admission of this statement, to the court’s finding that the settlor intended that Company operate at the same location with the same rental for the entire 25 years of the lease and to the court’s concluding that Bank did not breach its fiduciary duties in renewing the lease.
When a will or a trust instrument is fully integrated and is not ambiguous on its face, extrinsic evidence is not admissible to establish the testator’s or settlor’s intent. Roehr v. Pittman, 256 Or 193, 472 P2d 278 (1970); Rowe v. Rowe, et al, 219 Or 599, 608, 347 P2d 968 (1959); Allen v. Hendrick, 104 Or 202, 212, 206 P 733 (1922). The trust instrument on its face was not ambiguous and did not indicate any purpose of Senior to favor Company. Bank argues that the trust and the lease were silent as to what Senior intended the trustee to do if the lessee failed to give the 120-day notice of renewal and that extrinsic evidence is admissible to establish his intent in this case. We do not agree. The lease unequivocally stated that “[t]ime and the punctual and exact performance * * * of the conditions * * * are of the essence of this lease.” The instruments do not indicate that the settlor intended the trustee to be lenient with regard to waiving the notice condition. If anything, they indicate the opposite. Because the instruments are not ambiguous as to the consequence of failure to comply timely with the lease conditions, extrinsic evidence as to the settlor’s contrary intent is not admissible.
The dissent argues that the extrinsic evidence is admissible to put the court in the position of the settlor to ascertain his intent. The court has no occasion to put itself in the settlor’s position when it construes a fully integrated, unambiguous trust document, because the intent of the settlor can be ascertained from the face of the document. ORS 42.220 and ORS 41.740 permit a court to consider the circumstances surrounding the execution of an agreement only when the agreement is ambiguous on its face or is not fully integrated. [247]*247Bonded Credit Co. v. Hendrix, 282 Or 35, 576 P2d 795 (1978); Webster et ux v. Harris, 189 Or 671, 677-78, 22 P2d 644 (1950). Resort to extrinsic evidence to make an unambiguous document ambiguous is not permissible, but that is the sole purpose of the dissent’s resort to it in this case. See Sund & Co. v. Flagg & Standifer Co., 86 Or 289, 299, 168 P 300 (1917).
The three cases that the dissent cites for the proposition that, regardless of whether the writing is ambiguous, extrinsic evidence relating to the circumstances surrounding the execution of the documents is admissible, 81 Or App at 251, do not support that position. In two of them, the court held that the documents it construed were ambiguous. Welch v. U. S. Bancorp, 286 Or 673, 690, 596 P2d 947 (1979) (“The contract is not unambiguous.”); Taylors Coffee Shop v. Taylor, 56 Or App 419, 424, 643 P2d 347, rev den 293 Or 235 (1982) (“[T]he escalation clause was ambiguous.”) Any language in those cases to the effect that a court may consider extrinsic evidence in construing an unambiguous contract is pure dictum. In Card v. Stirnweis, 232 Or 123, 374 P2d 472 (1962), the court considered an unambiguous, but only partially integrated, contract. The contract there did not address the disputed issue of whether the optionee had to be a shareholder at the time he exercised an option to purchase more stock. Because the agreement was only partially integrated, the court considered extrinsic evidence to determine what the parties would have agreed to in the situation that arose in order to supply the omitted term. None of the cases supports the dissent’s position that extrinsic evidence is admissible to construe a fully integrated, unambiguous document, as in this case.2
In the absence of any specific directions, trustees must manage trust property in accordance with the statutory duty of prudent management and in the best interests of the beneficiaries. When Company failed to exercise its option [248]*248timely, the trustee was obligated to determine the market rental of the property either by. appraisal or by testing the market. Hatcher v. U.S. Nat’l Bank, 56 Or App 643, 652-53, 643 P2d 359, rev den 293 Or 373 (1982). We do not think that the trustee fulfilled its duty in this case but, instead, took the easiest course by permitting the lessee to renew the lease, which locked up the property at the below market rental possibly for another 20 years. The trustee’s assertion that it did evaluate the lease before renewal is equivocal and its claim that it sought to effectuate the settlor’s intent seems to be an after-the-fact rationalization. The trustee did not even discover the existence of the option until June 11,1975, long after the right to exercise it had expired. The trustee’s employe called Junior and asked him to exercise it, which Junior did on June 16, 1975. The trustee breached its, fiduciary duty by waiving the notice provision and offering to renew the lease without attempting to negotiate a rental more favorable to all the beneficiaries or even to consider that option.
Plaintiffs, who now have title to the property, request that the lease be rescinded as a result of the trustee’s breach. A contract made between a trustee and a third party can be rescinded if the third party “knows or should know of the existence of the trust and that the trustee is committing a breach of the trust in making the lease.” Ill Scott on Trusts § 189.1, 1539-40 (3d ed 1967).
“A third person has notice of a breach of trust, although he does not have actual knowledge of it, if he knows facts which under the circumstances would lead a reasonably intelligent and diligent person to inquire whether the person with whom he is dealing is a trustee and, if he is, whether he is committing a breach of trust, and if such inquiry when pursued with reasonable intelligence and diligence would give him knowledge or reason to know that the trustee is committing a breach of trust. ***
“Whether a person who deals with another who is in fact a trustee is under a duty to inquire whether he is a trustee and whether he is committing a breach of trust in making the transfer, and if so to what extent inquiry should be made, depends upon the circumstances.” IV Scott on Trusts, § 297, 2405-06 (3d ed 1967).
See also Clearwater v. Wagner, 272 Or 491, 496, 537 P2d 532 (1975).
[249]*249We do not think that Company should be charged with knowledge that the trustee breached its duty in waiving the notice requirement under the circumstances of this case. First, in this case the trustee did not make the lease; the grantor made the lease which gave Company significant advantages. The trustee only permitted Company to renew the lease despite its having failed to give timely notice. Because the trustee’s role was more minor than had it created the lease, Company could reasonably think that the trustee’s conduct was proper. Second, Junior, president of Company, testified that he did not know how the figure of $2,100 was originally determined or how it compares with other rents in the area. He also testified that he would not have gone along with a rent increase, had the trustee proposed one. Third, there was evidence that, if Company did not renew, the property might have been difficult to rent and could have been vacant for up to one year. Extensive remodeling would have been required to lease the premises to other than a furniture company. The information with which Company was faced justifies different inferences as to the prudence of the trustee’s acts, and Company could plausibly have inferred that the trustee was acting in the beneficiaries’ best interests by waiving the notice requirement. Because we cannot say that Company should have known of the trustee’s failure to consider options other than renewing the lease, we deny the beneficiaries a rescission of the lease. The trustee is, however, liable for damages which the beneficiaries have suffered and will suffer in the future, and we remand for a determination of those damages.
Plaintiffs claim the trustee committed a second breach of trust by failing to demand payment on the aforementioned promissory note after interest rates rose above seven per cent. The note became a trust asset after Senior died in October, 1973. Evidence showed that the bank’s prime lending rate surpassed seven per cent in September, 1977, and reached 10 per cent in October, 1978, 12 per cent in August, 1979, and rose to 20 per cent in April, 1980. The trial court admitted hearsay offered to show that Senior would not have wanted the trustee to collect the demand note and found that the bank was prudent in failing to demand payment until September, 1980. Plaintiffs assign these rulings as error.
Extrinsic evidence of the settlor’s intent was not [250]*250admissible, because the trust instrument was not ambiguous with regard to the trustee’s duty in managing the asset. The trust instrument specifically authorized the trustee to realize upon any promissory note and did not indicate any intent of the settlor not to have the trustee demand payment. Prudent investment management would call for the trustee to demand payment on the note as soon as it could realize a return on this asset which was greater than seven per cent. The trustee breached its fiduciary duty by failing to demand payment on the note after September, 1977, and is liable to the beneficiaries for the lost income to the trust.
The dissent argues that plaintiffs’ damages were de minimis from what it concedes was a breach of defendant’s fiduciary duty. The note was a trust asset, and the trustee’s failure to make that asset more productive harmed all of the beneficiaries. If the trustee had called the note and reinvested it more productively, it would have increased both the value of the corpus and the trust’s income. An increase in the corpus clearly is a direct benefit to the residuary beneficiaries. An increase in the trust’s current income would also provide at least an indirect benefit to plaintiffs in that it would reduce the potential need to invade the corpus to provide for the widow’s needs. The entire trust and all the beneficiaries would have benefitted from the trustee’s demanding payment on the note earlier, and plaintiffs were sufficiently damaged to hold the trustee responsible for the breach of trust.
Reversed and remanded for a determination of plaintiffs’ damages.