I know in my area, dog bites are supposed to be reported to the police, by calling 911, for the purposes of disease control and safeguarding the public, especially children. The police respond, take a report, and in this situation, the dog would be taken out of the home to the SPCA for testing and to safeguard the child. I don't think that I'd feel safe having my child in a home where a dog that bites is present. Even a small dog can damage a child's vulnerable face, even take out an eye. Perhaps this is why the past owners were taking the dog to the pound, to safeguard the children in their homes.
I love dogs. My labrador sleeps on the foot of my bed every night, and we're very close. As much as I love her, I would have to get rid of her if she presented a threat to my children. Kids' safety comes first, last, and always.
Love,
KJ