INGENOHL vs.

OLSEN AND COMPANY, INC

FACTS: In 1919, the acting Alien Property Custodian of the United States, by virtue of the
Trading with the Enemy Act as amended, required and caused to be conveyed to him the
property and business then belonging to the company known as Syndicat Oriente, formed
under the laws of Belgium, of which the plaintiff was the gestor, and an enemy as defined in
said Act. The primary purpose of the proceeding was to seize, sell and convey any and all of
the property owned and held by the company within the jurisdiction of the United States, as a
war measure, upon the ground that they were alien enemies of the United States.
During the public sale, defendant corporation was the highest bidder. The said Alien Property
Custodian of the United States having thereafter accepted said bid and received from the
defendant corporation in cash the amount of said bid, did execute in favor of the defendant
corporation a deed of conveyance. The defendant paid in good faith, and took over the
property and assets of the company, including its trade-marks and trade names and its business
as a going concern
After obtaining the proceeds from the sale, the plaintiff in violation of the conveyance,
wrongfully instituted an action in the Supreme Court of Hongkong against the defendant in
which the plaintiff claimed to be the sole owner of the trade-marks for the exports of the
business. The Supreme Court of Hongkong ruled in favor of the plaintiff, allegedly through
misrepresentation, ordering defendant to pay the former for costs and AF. The Court ruled that
the deed of conveyance limited the sale of the business to the trademarks within the
Philippines, implying that the plaintiff is still entitled to the sell the cigars under the same
trademarks through exporting, which accounts to 95% of the total sales of the company. (This
means that the plaintiff paid the cash equivalent of the whole of the business but only entitled
to 5% of the such, the sales within the Philippines)- UNFAIR TALAGA!
The CFI rendered judgment for the plaintiff for the full amount of his claim, with interest,
from which the defendant appeals. Defendant company alleges that when he purchased the
property and business, all trademarks are included; that the subject of the sale is not only those
trademarks for sales within the Philippines.
ISSUE: Should the judgment rendered by the Hongkong court be enforced by Philippine
courts?
HELD: NO; we do not hesitate to say that the judgment rendered in the Hongkong court was
a clear mistake of both law and fact, and that it ought not to be enforced in the Philippine
Islands.

The business of the plaintiff is almost exclusively an export business, and that the transfer of
the goodwill thereof necessarily carried with it the transfer of said export business and of the
trade-marks and trade names which could not be disconnected therefrom
- It is conceded that the Hongkong court had jurisdiction and that the defendant appeared in
the action and contested the case on its merits. Hence, there was no collusion. Neither is it
claimed that there was any fraud, but it is vigorously contended that the Hongkong judgment
was a clear mistake of both law and fact. Exclusive of the provisions of section 311 of the
Code of Civil Procedure, it is very doubtful whether it could be sustained upon the ground of
comity or the Law of Nations. As between allied nations and under the law of comity, their
mutual policy should be to sustain and enforce the spirit and intention with which the seizure
and sale of any property of an alien enemy was made rather than to minimize, destroy or
defeat them.
We are construing a deed of conveyance from the United States to the defendant. The primary
purpose of the whole proceeding was to seize and convey all of the property of the plaintiff or
his company within the jurisdiction of the United States, including trade names and trademarks as those of an alien enemy. To now give the defendant the use and benefit of only 5 per
cent of such trade names and trade-marks, and to permit the plaintiff to have and retain the
other 95 per cent to his own use and benefit after he has ratified and confirmed the sale, would
impugn the honor and good name of the United States in the whole proceeding and defeat the
very purpose for which it seized and sold the property of an alien enemy, to wipe Ingenohl and
his company out of existence and put them out of business in so far as the United States had
the power to do so
Be that as it may, this court is bound be section 311 of the Code of Civil Procedure. That law
was enacted by the Legislature of the Philippine Islands, and as to the Philippine Islands, it is
the law of the land. In the absence of that statute, no matter how wrongful the judgment of the
Hongkong court may be, there would be strong reasons for holding that it should be enforced
by this court