This is a very bad situation.

Two dogs living mostly outdoor (because you have a baby??

)....very silly reason for them to have to live outside.
Dogs that spend so much time alone start making their own rules. You have an intact, dog aggressive dog...and only a 4.5 foot fence.
You let an 8 year old child play outside alone in your yard with your dogs??
Terrible idea.

Lack of supervision at both homes.
Please get a higher fence, start allowing your dogs to live in your home....and NEVER let anyone but your own family out with your dogs unless you are right there.
Adults in both homes are to blame and a dog died because of it.
Gina