I'm working on the assumption that D&D alignment is an objective mechanic: in a world where alignments can grant magical power and create planes of existence, and a spell can tell the difference between a man who saves babies for Pelor and a man who eats babies for Pelor, alignment must be objective and intent counts for very little.
This is a social issue, not a mechanical one.
Mandating changes to a player's character is a Big Deal and can destroy the trust in a group if handled poorly. If he thinks his actions don't merit punishment, he will go on the defensive and there will be Bad Feelings in the group regardless of the mechanical outcome. Before you lay down a ruling like this that will so seriously impact his character, understanding must be reached. To this end:
First decide if it's worth it.
I've had at least one chaotic monk who I just let alone because of the group's social dynamics: the player was younger by several years at an age when that was significant; his actions were rarely negative for the party; and he actually made the group laugh.
Alignment, especially as a class requirement, isn't a balance issue. Although alignment is almost impossible to excise from the system, exactly which alignment a character has is largely irrelevant to mechanical balance. So if everyone's safe and happy, maybe just let it drop because the problem is entirely cerebral and not actually impacting the game as it's played. Assuming that's not the case...
Work with him to create a common baseline.
Many alignment debates spring from both parties feeling the definitions are obvious when in fact everyone has a different idea of what the alignments mean and look like.
Before you bring in the alignment hammer, sit down with him outside the regular session. A lawful character is probably acting in accordance with a code of some sort, so ask him to help you understand his actions by writing down his code. Come prepared to study the D&D alignment concepts together (not to lecture him on them). Work with him to make the code fit the D&D definition of lawful while still being as close as possible to his vision of the character.
This gives you both a clear idea of what is and is not lawful for that character; now your discussions can have a reference point you both agree on. You might even find that he has some vision or insight you didn't understand before.
Make it a story.
Now that you have common ground outside the game, give his PC a chance to make the change organically from within: whether he adjusts his behavior to match his code, or changes his alignment, if you make it a cool story instead of a decree from on high there'll be more buy-in from the player.
- He defies the outdated passiveness of his order and strikes off to be a vigilante hero; the Doctor in Doctor Who is a grand example of this concept.
- His respected mentor needs the party's help and while they work together the monk is reminded of the importance of an ordered life.
- He falls in love with a chaotic neutral druid and renounces his old life.
- He's been influenced by some subtle mind magic and must throw it off before it destroys him.
- An injustice that he feels personally about cannot be addressed through lawful channels; he still follows a personal code but disregards the societal structures that have failed him.
You get the idea: help him do something cool whatever the mechanical result is.
You're not the boss
Again, this is a social issue. The Game Master is rarely the leader of the social group and he's certainly not the High Judge of Fun. Remember this whatever you do, and remember that everybody needs to be safe and happy first. Only then can we worry about following the rules.
“Always” alignment does not actually mean always
Always: The creature is born with the indicated alignment. The creature may have a hereditary predisposition to the alignment or come from a plane that predetermines it. It is possible for individuals to change alignment, but such individuals are either unique or rare exceptions.
Note that creatures with acquired templates do not experience “birth,” so the first line does not apply. Becoming a vampire “always” changes one’s alignment, but in rare cases (perhaps as in the case of your NPC), that can be subverted.
And even in the cases of Evil vampires, they can be reformed. There’s even an explicit spell for doing that (santify the wicked from Book of Exalted Deeds), though I strongly encourage you to completely ignore it as it’s very poorly designed (like most of that book), and has some extremely unfortunate implications (if you ignore the fact that the books says it’s good, and read it, it sounds like a pretty awful, evil thing to do to a person).
Thus, yes, you can have a non-Evil vampire. Redeeming Evil creatures is not just a Good act, it is the quintessential Good act.
That said, no character is ever required to always act for the maximum Good; it is not an Evil act to choose to not perform a possible Good action.
That said, assault and murder are pretty much definitively Evil...
Evil Alignment is consistently not an acceptable reason to attack someone
Attacking someone without specific cause is assault, which is Evil and in most jurisdictions illegal. Continuing that assault until the target dies is murder, which is definitely Evil and illegal most everywhere.
A paladin who attacks someone purely on the basis of pinging for detect evil should, under the rules, fall on the spot, for willingly commiting an Evil act.1
This is described in multiple rulebooks. It’s one of the few things about alignment that actually is somewhat consistent.
Alignment is not a detailed or consistent system
Alignment is described in different ways in different books, and the definitions are vague, ambiguous, and conflicting. The system is a historical artifact of D&D’s roots: it is designed for a simplistic, hack-and-slash dungeon crawl, where the players are Good because they are the players, the goblins, orcs, and vampires are Evil because they’re the enemies, and no one ever thinks too hard about that. Unfortunately, D&D has evolved but alignment hasn’t evolved with it; though people play far more serious and varied games than a straight dungeon crawl, alignment is still the same nine boxes. Don’t expect much from it; I actually strongly encourage you to ignore it. Outside of those simple dungeon crawls, it causes more headaches and arguments than it will ever be worth.
1 I cannot more strongly recommend against the actual falling rules, however. Instead of stripping the paladin of class features (boring, interrupts the story, punishes the player), I strongly recommend switching the character to the appropriate alternate alignment variant paladin, so he keeps his powers they just become “dark” (or chaotic if that’s the way he falls).
Best Answer
The Rules
It is always good to go back to first principles and look at what the rules actually say. From the Basic Rules (pp. 33-34) (Player's Handbook is identical I believe; p. 122), I have highlighted what I consider to be key points:
The overarching concept is one of choice (unless you are a devil etc.); to my mind, the alignment written on a character sheet is aspirational - this is the type of person the character wants to be; not who they are.
This contrasts sharply with the earliest editions of D&D where the consequences of consistently acting outside alignment were severe (loss of a level in AD&D - a fate worse than death for a character!)
The problem of Evil (and Good)
How do you recognize an evil (or good, lawful or chaotic) act? Are they objectively quantifiable or are they contextual?
The problem is akin to that addressed by Justice Stewart when considering pornography:
Similarly, evil (or good, lawful or chaotic) is hard to define but I know it when I see it!
Part of the problem is that even after several thousand years of thinking about this stuff, there is no consensus of what "good" is: is it altruism, utilitarianism, liberalism, egalitarianism, something else? Similarly with "law", do we need: democracy, communism, feudalism, socialism, something else?
I contend that the ethical content of an act is a combination of its consequences and the intent of the perpetrator. This is reflected in most judicial systems: to be a crime the perpetrator must have criminal intent.
Under the RAW, an act done by an angel is both Lawful and Good simply because an angel is doing it. Equally, the same act is both Chaotic and Evil if done by a demon for the same reason. It is within the DMs purview to decide that there may be acts that one can perform which the other is incapable of but I argue that these should be the exception rather than the rule. For example, both should be able to comfort or kill a child in the right circumstances; in either case an angel acting for the greater good and a demon acting on a titillating whim.
When the act is done by a PC, things really get confusing.
Reading the description of the alignments as they apply to those with moral agency, it is clear that you do not have to be vicious to be evil nor does being good mean you can't be vicious. As written, good is synonymous with altruism, evil with selfishness, law with community and chaos with individuality. An evil character may kill with regret, a good character with satisfaction, what matters is the motive for the killing.
The Specifics
The druid is acting bang on to his personality, he has no reverence for society, either the broader state or his current companions: chaotic to the core. Although he is clearly putting self interest first here, it is clear that he does not consider depriving his companions of their "fair share" to be either evil or good: in his mind it doesn't hurt them and he can use the money for useful stuff like saving the forest. The question of goodness comes when the fighter or paladin needs the money for something - will the druid give it to him?
You give no information about the the paladin except his alignment. He is clearly not acting to his alignment; he is not showing loyalty to the fighter (chaotic) and is acting in the paladin's own self interest (evil). Oh well, the paladin set high ideals for himself and failed to live up to them, don't we all? Maybe he will feel guilty about his small acts of Chaotic Evil, maybe he won't. Of course, maybe he doesn't like the fighter, maybe he feels he has earned the extra money, maybe he feels the fighter would just blow it on drink while he can use it to help the poor (that is, the poor who are not innkeepers).
Unless he is breaking his oath (which he isn't because he hasn't taken it yet) there are no in game consequences. You have some interesting opportunities, however, when he does reach 3rd level: perhaps he can't take his oath. Some quests to find out why and to make amends might be in order, hmmm?
Summary
To my mind, alignment for PCs is a role-playing guide like traits and flaws. I consider them as aspirations of who the character would like to be and I don't see it as the DMs role to castigate them when they turn out to be someone else so long as everyone is having fun.
If you really want to meddle in this, then some positive reinforcement through inspiration when the character plays to their alignment at a cost is the way to go.