Results: Activist Gone Wild!

Scenario: My neighbor (self-described animal activist) sees a small dog a few times wandering around our neighborhood, although there's a leash law. After a couple times of the owners retrieving their dog from other neighbors (thanks in part to the tag on the collar), the dog is back again. This time he takes the dog, removes the collar & gives the dog away to people he knows who live elsewhere. When the owners come back looking for the dog (naturally they search in the area where it was last found), my neighbor tells them they didn't deserve the dog (he has never met them before) & that he gave it away. They are shocked & angry, demanding that he get their beloved dog back. No reason was given as to why or how the dog became loose. He refuses to tell them where the dog is, so they call the police. The police orders my neighbor several times to tell them where the dog has been taken or risk going to jail, in order to end the dispute quickly. He stubbornly refuses & ends up being charged with theft & is taken to jail. After many days, he finally provides the name/location of the new owners several counties away. They were totally unaware of the original owners, the theft & had already spent a lot of money on the dog (grooming, neutering, vet bills). The original owners have no ownership papers. With this in mind & putting yourself in the place of each of these people, please answer the following questions.