Lots of good advice here. I'll post my two cents as well....

Your Father-in-Law clearly let his anger get the best of him, however you can also turn this into a great lesson for your son. I would have a conversation with your son about how letting your temper "get the best of you" is never a good thing. Also let him know that everyone gets angry, it is how you deal with that emotion that makes you a "Man".

The idea of the buddy-box is also a great lesson for your son. Sometimes the folks that act up, just need to be shown a better way of doing things.