When do you pay a stud fee?

Usually pay it at time of breeding, but with a puppy guarantee. In other words, if the dog doesn't have a live puppy there will be a free breeding at a later heat.

Shouldn't you have asked this of the stud owner before he dropped his dog off?

I have always understood that it was the pick of the litter (puppy or the money from the first sold) unless you and the stud owner had agreed on a cash price instead. If no arangement was made, wait till the puppies are born offer the stud to take his choice of puppies. If yall agreed on a price, I would of talked about when to pay when you were negotiating the price, but at worst I would go with what the previous poster said about the puppy gaurantee