Hi Peggy, welcome to YorkieTalk. I am so glad that you joined our family of Yorkie Lovers. Being new to the breed, I can understand your questions. Unfortunately it sounds like you were dealing with a less than scrupulous breeder. I would never ever release a pup at less than 12 weeks - and even 12 weeks is iffy. Each pup should be carefully evaluated for his/her readiness to leave his/her birth home.
I, too, would be very upset if I purchased a purebred pup only to learn that my pup had questionable parentage. Sounds like that the litter may have had multiple sires OR the "breeder" simply didn't know which stud sired the litter and took a guess. As for the price $850.00 is actually a very reasonable price for a healthy pet yorkie pup.
You are to be commended for adopting pets from shelters and rescues. And I can understand getting "Yorkie Fever". Would love to see pics.