Exhibit 5.1
25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582
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June 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: New England Electric System
Common Shares
Dear Commissioners:
The undersigned, Corporation Counsel and Assistant General
Counsel for New England Electric System (the Company) have
been of counsel for the Company in connection with the
proposed issuance of up to 160,000 common shares of the
Company to be used for the acquisition of Nantucket Electric
Company pursuant to a Merger and Acquisition Agreement, dated
as of March 22, 1995, (the Merger Agreement). The Merger
Agreement contains a number of conditions precedent to the
merger and therefore to the issuance of these additional
shares. As such counsel, we have reviewed the various
documents and proceedings relating to said issue, including
without limiting the foregoing, the registration statement on
Form S-4 and the prospectus. We have also reviewed the
corporate and regulatory authority for the issuance.
Accordingly, we are familiar with the proceedings taken in
connection with such issue.
Based on the foregoing, and subject to the additional
actions yet to be taken indicated below, it is our opinion:
1. That the Company is a duly created and existing
voluntary association in The Commonwealth of Massachusetts;
and that the authorized shares of the Company consist of
150,000,000 common shares of the par value of $1 each, and
that authorized but unissued shares are greater than said
160,000 common shares.
2. That the issuance of the additional common shares as
permitted by the Agreement and Declaration of Trust dated
January 2, 1926, as amended (the Agreement), has been duly
authorized by the Board of Directors of the Company, subject
to approval of regulatory authorities having jurisdiction;
3. When duly issued and paid for, the authorized common
shares will be, validly issued, full-paid and non-assessable,
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June 1, 1995
and the holders thereof will be entitled to the rights and
privileges appertaining thereto set forth in the Agreement.
Article 9 of the Agreement provides in substance that no
shareholder, director, officer, or agent shall be held to any
liability in contract, tort or otherwise; that every person
shall look only to the trust estate for payment or damages or
otherwise, and that in every written agreement or obligation
reference shall be made to the Agreement and to the substance
of such part of the above provisions of Article 9 as are
applicable, and that neither the Board of Directors nor the
Trustee nor any officer, agent or representative shall have
any power or authority to enter into any agreement or
obligation on behalf of the Company except in accordance with
the provisions of said Article 9. Article 10 of the Agreement
provides that no trustee, director, officer, or agent of the
Company shall be entitled to look to the shareholders
personally for indemnity against liability incurred by them or
call upon the shareholders for the payment of any assessment
except only in the case of shares which by their express terms
are issued part-paid and assessable and then only as therein
provided. In Article 27 of the Agreement it is further
provided that all shares issued and to be issued shall be
full-paid and non-assessable except to the extent otherwise
specifically provided in the certificates representing such
shares. The Agreement expressly declares in Article 39 that
a trust and not a partnership is deemed to be created and that
the shareholders shall be deemed to hold only the relationship
of cestuis que trustent to the Trustee. Despite these
provisions, the shareholders of a voluntary association such
as the Company might, with respect to the liability of
shareholders under Massachusetts law, be treated in legal
contemplation as partners and as such under some circumstances
might be held personally liable for certain obligations or
liabilities of the Company. We consider the possibility of
any such liability remote because, in our opinion,
shareholders are protected under the laws of Massachusetts
from personal liability on contract obligations arising from
instruments containing the substance of such said provisions
of Article 9 as are applicable (it being the practice of the
Company to insert such in all contract obligations, including
all debt securities), and because the Company is a holding
company so that the possibility of substantial liabilities
arising from torts or statutory liabilities or penalties,
other than tax liabilities, is not as great as in the case of
companies operating physical properties. Notwithstanding the
fact that the Company is a holding company, in suits and
claims against its subsidiaries, including environmental
claims, courts and agencies might disregard corporate
formalities and assign liability to the Company despite
traditional principles of corporate law. Further, we
understand that unincorporated voluntary associations have
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June 1, 1995
been treated as general partnerships under the laws of a few
states, including Texas in which the Company's oil and gas
subsidiary has qualified to do business as a foreign
corporation. Even so, for the reasons cited above and because
of the substantial capitalization of the Company and its
subsidiaries, we consider the possibility of personal
liability of the shareholders of the Company to be remote.
4. The issue of the additional common shares is subject
to appropriate action by the Securities and Exchange
Commission under the Public Utility Holding Company Act of
1935 and receipt of full payment for the shares, and the sale
of the additional common shares is subject to a registration
statement with respect thereto becoming effective under the
Securities Act of 1933, as amended. This opinion does not
relate to qualifications or registration of shares under
securities or "blue sky" laws of the several states.
We hereby consent to the use of our names in the
registration statement and related prospectus of the Company
with respect to the additional common shares and to the use of
this opinion in connection therewith.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Assistant General Counsel