Aggressive Play?

Question
I have a Catahoula that is 5 years old, we got her as a small puppy from the pound, and a Yorkie that is 6 1/2 years old that we got from a rescue agency at 1 1/2 years old.  He was a rescue because he was living in a puppy mill and they were going to put him down because he was too big for a Yorkie and no one wanted him.  He was neutered when we got him.  At first, he was always timid and shy, but now he barks at anyone walking down the street (so does the Catahoula) and when the neighbor child, 8 years old, comes over, he is extremely aggressive towards him.  He jumps and nips at his clothes and fingers.  We have to remove him from the room because he scares the child.  Also, whenever we take him outside, we have to keep him on a leash because if he sees ANY other dog, squirrel, bird, anything, he's off chasing it.  We have a chain link fence in the backyard, and our neighbors have 2 pit bulls, well Chewie goes ballistic through the fence at them.  He has actually cut his lip on the fence trying to get at them.  To keep him from doing this, we take him on a leash in the front yard, or else he's too concerned with the pit bulls that he doesn't want to potty.  That is just some background information about him, but not the real issue.  We would love to fix it so that he's not so aggressive towards other people, dogs, birds, or squirrels, but that's not the main reason I'm writing.  

The main reason I'm writing is that Chewie, the Yorkie, plays really rough with Lily, our Catahoula.  At first it starts out ok, but then he just lunges at her and bites at her ears and neck.  He will also relentlessly lick her ears.  Sometimes it's so bad, Lily tries to hide from him because she knows she's not supposed to growl and snarl at him.  She is a very passive dog.  Well today, my husband was in the shower and he heard a huge commotion and came out to find Lily's back paw stuck in Chewie's mouth.  Lily's toenail had gotten caught between some of Chewie's teeth and Chewie was trying to get it free and Lily was screaming.  We think she's going to be ok, but I'm going to take her to the Vet to be sure because the nail is broken and hanging off.  

We don't know what to do about Chewie.  My husband and I both work, and we don't believe in crating them during the day, but we know they are our responsibility and we want to keep them safe.  Any instructions or information you can give me about my issue will be extremely appreciated.  We just don't know what to do.

Thank you for reading, I look forward to hearing from you.
Laura

Answer
Laura, you'll have to find a way to keep these dogs apart unless you can monitor their interactions.   Lily is being incredibly tolerant of Chewie's rude behavior.  She SHOULD growl and snarl at him.  How else is he going to get the message that what he's doing isn't appropriate?  Very soon, she'll lose her cool with him and you'll have a seriously injured Yorkie (or worse).  When you witness Chewie annoying Lily, redirect him to do something else. Teach him some basic cues that he can respond to and you can reward him for.

It sounds like you need professional help with Chewie.  His aggressive displays with children and other dogs is going to get him in trouble and you will be liable if he bites a child.  There are a number of techniques that a professional trainer or behaviorist can use to help ease his fears of things outside.  The prey drive with small critters is another matter and it's best to keep him on leash or in the fenced yard.  You're doing the right thing by not allowing him in the backyard when the neighbor dogs are out.

You don't say what part of Texas you are in, but here are the best places to find training in your area.  If you're near Ft Worth, look me up and give me a call!

http://www.karenpryoracademy.com/find-a-trainer
http://positively.com/dog-training/trainersearch/
http://www.ccpdt.org/
http://www.apdt.com/petowners/ts/default.aspx
http://iaabc.org/consultants