In Torres versus Ventura, 187 SCRA 96, the Supreme Court laid, that:

“the sale of the homestead by the homesteader is

null and void and his heirs have the right to recover the
homestead illegally disposed of. The contract of sale, being void
ab initio, must be given no effect at all. The parties in such a case
are to be placed in status quo which was the condition prevailing
prior to the execution of the void sale.”

The Supreme Court likewise elaborated in Egao versus Court of Appeals, 174 SCRA
484:

“The parties to the transactions with knowledge of

its invalidity cannot seek affirmative relief to the courts for they
are in pari delicto. However, this doctrine has certain exceptions.
The rule of pari delicto non oritur action (where two persons are
equally at fault neither party may be entitled to relief under the
law) does not apply to an inexistent contract, such as sale void
ab initio under the Public Land Act, when its enforcement or
application runs counter to the public policy of preserving the
grantee’s right to the land under the homestead law.”

Section 118 of Commonwealth Act 141, as amended by Commonwealth Act No. 456,
provides:
“FROM THE DATE OF THE APPROVAL OF THE APPLICATION
AND FOR A TERM OF FIVE (5) YEARS FROM AND AFTER THE DATE
OF ISSUANCE OF THE PATENT OR GRANT, LANDS ACQUIRED
UNDER FREE PATENT OR HOMESTEAD CANNOT BE SUBJECT TO
ENCUMBRANCE OR ALIENATION, NOR SHALL THEY BECOME
LIABLE TO THE SATISFACTION OF ANY DEBT CONTRACTED
PRIOR TO THE EXPIRATION OF SAID PERIOD, EXCEPT IN FAVOR
OF THE GOVERNMENT OR ANY OF ITS BRANCHES, UNITS OR
INSTITUTIONS. THIS EXCLUDES THE IMPROVEMENTS OR CROPS
OF THE LAND WHICH MAY BE MORTGAGED OR PLEDGED TO
QUALIFIED PERSONS, ASSOCIATIONS OR CORPORATIONS.”

De Los Santos versus Roman Catholic Church, et.al., G.R. No. L-6088, February
25, 1954, that failure on the part of the government to undertake such a remedy, the
vendee is considered a mere intruder:

“While the government does not take steps to assert its title, by
reversion, to a homestead sold in violation of the Public Land Law, the
vendor or his heirs is better entitled to the preservation of the land, the
vendee being in no better situation than as intruder”.