Exhibit 5.1
25 Research Drive, Westborough, Massachusetts 01582
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July 31, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Common Shares of New England Electric System
Dear Commissioners:
The undersigned, counsel for New England Electric System (the Company),
have been of counsel for the Company in connection with its proposed issue and
sale of up to 1,000,000 additional common shares in connection with the
acquisition of assets, businesses, or securities of energy-related companies
as defined in Rule 58(b) of the Public Utility Holding Company Act of 1935.
As such counsel, I have reviewed the various documents and proceedings
relating to said issue, including, without limiting the foregoing, the
prospectus and registration statement and the corporate and regulatory
authority with reference to said issue. Accordingly, I am 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 my opinion that:
1. The Company is a duly created and existing voluntary association in
The Commonwealth of Massachusetts. The authorized shares of the Company
consist of 150,000,000 shares of the par value of $1 each. The Board of
Directors has authorized the proposed issue and sale of up to 1,000,000 common
shares, as permitted by the Agreement and Declaration of Trust dated January
2, 1926, as amended (the Agreement). The common shares to be issued in
connection with these transactions will be newly issued shares, treasury
shares which are currently held or may be acquired by the Company, or shares
purchased on the open market.
2. When duly issued and paid for, the additional common shares will be
validly issued, full-paid and nonassessable, 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 to 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 nonassessable 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. I consider the possibility of any such liability
remote because, in my opinion, shareholders are protected under the laws of
Massachusetts from personal liability on contract obligations arising from
instruments containing the substance of such of 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, I
understand that unincorporated voluntary associations have been treated as
general partnerships under the laws of a few states. Even so, for the reasons
cited above and because of the substantial capitalization of the Company and
its subsidiaries, I consider the possibility of personal liability of the
shareholders of the Company to be remote.
3. The issue of these 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 consideration 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.
As required by Section 7 of the Securities Act of 1933, as amended, I
hereby give my consent to the use of my name in the accompanying registration
statement and related prospectus of the Company with reference to the
additional common shares, to which this opinion is an exhibit, and to the use
of this opinion in connection therewith.
Very truly yours,
s/ Robert King Wulff
Robert King Wulff
Corporation Counsel