Well, in our family "house rules" take precedence--when you are at grandma's HER rules apply--my children learned this very early and we have carried it through with my grandchildren. Kids learn very quickly what is acceptable under which circumstances. If the parents want to let him break his brother's toys, just tell them, NOT at my house. I think you handled it well. I just don't understand "he will get it back" WHY do you feel you should give him back his money. It seems to me that negates the point of the punishment???