I am so sorry this happened to you, but it was in NO WAY you fault ( or your dog's)! I completely understand how you feel, last year a small dog somehow got into my backyard and one of my dogs went after it. He grabbed by the neck, but luckily didn't get a firm grip and eventually (seemed like hours, was probably a few minutes) I got him to drop it. I wrestled him into the house and went back out to find the dog, expecting it to be seriously injured, but it had managed to get out of the yard and disappear. Like you, I tried to find it, but never did. You did everything you could, it was not your fault! Please don't muzzle your dogs when you walk them. If they are attacked by a loose dog, they will not be able to defend themselves, and honestly, your dog could still have grabbed the little dog even with a muzzle on. I sincerely hope the little dog was not badly injured.