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Here's the full situation:

The players are tracking a small pack of gnolls (one of each in the MM plus two hyena and a cacklefiend) that have left a long trail of bloodshed, and may have captured one of the players. This is lead by the elven ranger (whose passive perception is ungodly high), who finds each kill zone to be a bit fresher. After a full day of tracking, the elf hears the sounds of combat over the next hill.

When they crest the hill, they find the gnolls and hyenas decimating a small band of helpless travelers. Off to one side of the battle, two children are hiding in the tall grass, and on the near side, the limp body of the party's compatriot has been discarded for the duration of the battle. These two pieces of information are quickly passed on by the elf to the rest of the party.

The group charges into battle, the elf staying at the crest of the hill with his bow, the paladin rushes to the unconscious PC, and the rest of the party rushes into combat (just as the gnolls finish off their prey).

The battle rages, blood flies, tempers flare. And, in the midst of it, the player who had been captured heals the first fallen gnoll and agrees to follow him, if he will spare the party (as she has seen before that the huntmaster controls the flow of battle).

He whistles to break contact as he and the bargaining player escape. Before the rest of the gnolls can react, one of them is dropped (the marauder). On their initiative, the claw fighter manages to flee at full speed (faster than even the elven ranger), leaving only the scourge, a hyena, and the cacklefiend.

The scourge shifts away and begins to walk away from combat, the two hyenas on his heels. They are well withing closing distance of the party, so the clever scourge decides to play on the "good" nature of the party (including a paladin of Pelor and a dwarven cleric of Thane [read: Moradin]).

As the first player advances to attack, he turns and delivers a quick ultimatum. Should they even touch him, he swears that the children will be slain before he dies.

The children have been ignored up to this point, though clearly marked on the battlefield.

The player, an unaligned dragonborn warlord, attacks one of the (very) bloodied hyenas, and drops it with the swing. The paladin rushes to the children, barely making it with a run, though has already blown his interposing daily ability, so is less of an obstacle than he would like to be.

The scourge then drops his weapon, gestures to the cacklefiend to fulfill te ultimatum, and raises his hands in surrender, readying an action to shift away, should anyone make an attack. The scourge, with its prolific speed, is able to bound around the paladin and charge in for the kill (the children were a low level "minion swarm"), slaughtering the both of them.

Now, with the scourge presenting no threat, the cleric (of a lawful good deity) charges in to kill the surrendered gnoll, when the gnoll shifts away the dwarf even spends an action point to press the attack, and is able to kill the gnoll (who's hp were in the single digits at this point).

I contest that the act, while perhaps justified, flies in the face of Thane, and as a consequence the cleric will not have his prayers answered for a short time (temporary losing his powers).

I made sure to stop the player, clarify the point that the gnoll had surrendered, asking the basic "are you sure?" question, so he performed the act knowingly.

This was the end of the session for the night, and has sparked some controversy in the group. So I am here to seek some opinions on the matter.

I specifically do not want to hear about whether it is legal to strip a divine character of powers if he violates the tenants of his religion.

I think you handled it well.

I would also argue from a morality point that innocents whose lives hang in the balance should always be the number one priority of such a Cleric or a Paladin. I like that your focus is on the tenants of their religious belief rather than the good vs. evil argument.

Save the children, then live to pursue the badguys another day.

Furthermore, if I was adjudicating this campaign, I would think some penance and redemption is in order for the return of the divine powers. It doesn't make it the end of the world for the character, but adds story and character depth.

To quote the player of the cleric's email to the group:

...I also proffered the opinion about the gnoll not really surrendering and ordering his soldier to kill as gnoll treachery and not true retreat. Consider this: If a swat team enters a building and victims are killed by hostage takers after not heeding the criminals' threats to stay away, do you imprison or fire the swat team? Are they to blame for the deaths? No the hostage takers are. If a hostage taker is killed in the process of surrendering, do we shed a tear? No, they could have been doing any number of things that day instead. Gnolls will never be picking flowers or painting a house, and I think most gods and orders would know that.

If it had been a creature that could reasonably had a change of heart, deadly force would be extreme. But surrendering gnolls? Would a gnoll surrender? And to save its own life? They are agents of chaos, what is death to them?

To which I added, "to kill on the merit of racial prejudice is evil," and...

If the swat team has the situation under control (i.e. the sole surviving hostage taker has dropped his weapon and surrendered) and one person on the team fires a few rounds into his chest, you can be assured that there will be an investigation, accompanied by a cooling off period.

Hippokrene wrote:

Would you allow the cleric and paladin to kick the warlord from the group?

They haven't kicked the city-destroying tiefling warlock demon-worshiper from the group, so this isn't very likely. Though, yes, in-character consequences inflicted by other players' characters is well within their right. Though I would think that they would come to some sort of agreement before that happened, and I don't think that they lay the blame on the warlord, but rather the gnoll itself.