It was good that your husband stood up to his Mother for you, it shows her that you are both in agreement on how to deal with your child. However, to take the child from her home because you don't agree with how she disciplines would not be right.You said you want someone to discipline him while he is their care, but do you think that she does not make him behave? He is in a home where he is loved and cared for, you may not find that result somewhere else. You also have to look at how your child feels about that...to all the sudden not be going to grandma's may truly confuse him.
I watch my grandchildren at various times for my kids, and I know that I don't discipline the way they do, but the kids do have to behave when they are here. Our 2 year old grandson actually lives here and when Mom is gone and we have him, he knows he has to behave. I agree it was wrong to undermine you, and my grandkids know that there is no way that will happen, but it's a 2 way street...my older grandsons are 11 & 12, if they get in trouble here and I ground them, they are grounded at home too. They know this and it helps me and their parents.
Think long and hard about taking him from someone who loves him. Sit down and talk with your MIL about the rules you have and see if you both can agree on a discipline that will benefit everyone. If done during a time when there is no conflict, you may find it helps with the outcome! Hope things work out for the adults for the benefit of the child.
L.