Okay - thanks for the information.
I believe what is happening is two fold 1) Buddy is not yet accepting Nick. This is not uncommon when there is an age difference like this. Older dogs have less tolerance for the antics of young ones so they can lose their patience easily. 2) Nick has now matured into his adulthood - and this is a time when behaviors can appear that have not been seen before. This new stage of his life is likely to start the behavior you are seeing. He's now capable of practicing the common 'pack mentality' of who is going to top dog, or the more dominant of the two. Buddy is comfortable about who he is and where he is in his life. Young Nick is like a young adult 'finding his way' in life.
When you have more than one dog, it is important for them to work out who is going to be who in the pecking order between themselves however, the botXXXXX XXXXXne has to be that YOU are the leader, or top dog above all.
One thing that is important is specifically how they are 'fighting.' Family dogs can get on each other's nerves once in awhile and display some toughness however bullying one another is not acceptable. And it sounds from your description like Nick is bullying Buddy - if all it takes to start something is for Buddy to just walk by Nick.
The best way to get a handle on this and prevent any 'damage' from happening is to hire a trainer or behaviorist that will work specifically with this problem. You need to find someone with experience and that uses positive reinforcment techinques in their training method. ANY use of physical discipline, such as rolling the dog over and holding him down to show him 'who's boss', use of choker chains, for example, are techniques where I guarantee will make matters worse - it WILL make Nick even more aggressive. So again - positive reinforcement is crucial. (if you need help finding someone, let me know what city you live in).
While you are searching, you can start now by immediately stopping any of this behavior as soon as it starts. No second chances. If Nick should start to growl at Buddy, he immediately needs to go into a 'time out.' You would do this by telling him "NO!" in an authorative voice and placing him in his crate or a room. A time out needs to be an isolated spot away from anyone. Time out's for this behavior should last about 3 minutes. At this time, you let him out of his time out, do not pay much attention to him at this time, and let him go about his business. Repeat as often and as much as necessary. Also make sure Buddy has his own space and time away from Nick once in awhile. You do need to respect he's been around longer and his age.
It's really important you find someone to help you with this. If Nick shows this type of behavior to Buddy, he'll end up acting this way around other dogs AND people, especially children.
You're being a very responsible pet owner by searching for answers to this problem and I applaud you for it. Yorkies may be small, but they still can bite and it can do as much damage as a dog of any size could do.