You might want to review some other threads in this section, because they have a lot of good potty training advice. Of the top of my head, there are a couple things you can do to keep him from ripping up the pee pads. First, you can spray them with bitter apple scent. Second, someone here said they got a pee pad holder that locks the pee pad in place. I haven't seen one of these myself, but apparently you need to make sure to get a sturdy one.
Bottom line, he's a baby, and he probably can't hold it all the way through the night yet. This will likely change in the next few months, or even the next few weeks. I suspect that GeorgiesMama is right -- you've successfully trained him to go outside (congratulations!), and he is trying to do what he's been taught.
I see you live in California. If you do end up deciding to re-home your dog, please PM me. I am looking into getting a second yorkie, and I would really like to get a "rescue".
