
I must admit with just the situation as portrayed with no additional infop I think it most unfair of the stud dog owner to try and control where pups are homed to if this wasn't part of the agreement for using the dog at time of mating. If such an agreement was made then it shouold have been in writing, as it is not usual for a stud dog owner to have this much say over what the bitch owner does with the litter, other than if a pup is the stud fee.
This is the downside of owning stud dogs, little or no say in how they are reared or where they go, the up being that you don't have the hard work reaing the pups.