Claraification,

the card states "Whenever a character moves into a space that has an Enemy, he must end his move there instead of moving the full distance as indicated by the die roll."

If there is a character in that space as well, can he choose to encounter that player instead of the enemy?

If that's all the wording on the card, then yes, you have to stop in the space with the Enemy, but can encounter a possible character instead (didn't find the card on Talismanwiki).

You could also evade the monster since the card doesn't state that you must fight it.