Question

Mr. Santos owns a parcel of land in the province of Laguna. He decides to sell a portion of his land to Mr. Hernandez. They enter into a contract of sale and Mr. Hernandez pays the agreed purchase price. However, before the transfer of title could be completed, the said portion of land was destroyed by a fire caused by a neighboring property. Mr. Hernandez now demands a refund from Mr. Santos for the amount he paid for the land.

Discuss the rights and obligations of Mr. Santos and Mr. Hernandez in this situation, particularly with regard to the effects of the destruction of the subject matter of the sale. Support your answer with relevant provisions of the Civil Code.