If you are in complete control of your dog and he is on a leash while walking you are fine. If an unleashed dog approaches you and your dog attacks and kills it you are not at fault. If someone tries to say you are do not believe them. According to leash laws any animal that is not on a leash or under complete control of its owner is considered to be at large, and the owner can be fined, and even serve jail time if it attacks a person or animal. If
A perfect example is this. I was walking my Shepherd Mix in our neighborhood when a Min Pin, who had been running loose for over a year, decided he wanted a piece of me. He came at my ancle, and I kicked him away. When he came at me again my dog Dio intercepted him in order to protect me, and started shaking him like a rag doll. I told Dio to let go, and he did, but the little dog was bleeding profusely, and had a huge gaping hole in its neck. It ran off somewhere, and I couldn’t see where but assumed it was going to die from its injuries. Despite everything I still felt bad for the little guy. A few minutes later a man came out of his house yelling at me because I let my dog attack his kids dog. I told him that he should have had his dog on a leash, and that his dog attacked me. He tried to say Dio was at fault, and I told the man Dio was protecting me, but the man thought that since his dog was so little it didn’t matter if it attacked me or not because he couldn’t hurt me. He basically wanted me to let his dog bite me, and my dog. YEAH FREAKIN RIGHT!! Oh, and I did have to get a rabies shot. FREAKIN HURTS. OMG!!!
Anyway, two weeks later I’m summoned to court and told to bring my dog. The guy tried to sue me, but of course I presented my ancle, and the rabies shots I had to endure because of this jerk, and was awarded compensation for my medical expenses, and the guy was fined for having a viscious dog at large, and the dog was put down.
So, if you see any bite wounds on your dog or yourself from those little buggers; that is a lawsuite. Just because a dog is small doesn’t give the owner the right to let it run free to attack other people and their pets.

Leash laws vary from state to state, but I’d imagine there is a leash law where you live. I really can’t imagine that you would get in trouble if your dog hurt one of the little dogs out in the street (not on private property).

I can see why you wouldn’t want to make your dog pay for others’ mistakes. Instead, you should try to drive the little dogs off before they get too close to your dog. A walking stick could be used to make them keep their distance. A call to animal control is not out of the question either.

Wrap up the “rats” and throw in to the rubbish bin.