Toto was serving Usagi and the newly orphaned Yuki some fish while waiting for Inspector Ishida to return to town. Usagi is attacked by gangsters and in the ensuing melee was about to be stabbed in the back. Toto slaps the gangster with a fish to the face (a tribute to Scott Shaw!).
Stan Sakai reveals that Toto is based on his father-in-law, who owns Fish King Seafood and Poultry, a restuarant in Glendale, CA.
Usagi Yojmbo issue #159 "The Hatamoto's Daughter"