OK, so a party of chaotic good players + paladin are hired by an old sickened man to find his son and bring him back to the father. The father became estranged from all three of his sons. When his wife died, she placed a curse on the old man until he found his sons and repaired his relationships with his sons. The old man told the group he has found 2 of his 3 sons and offered the group treasure in exchange of finding his last son and returning him to his father.
The party fight their way through an underground Kuo-Toan lair and find the son, who has taken on a God-like position to the Kuo-Toans, subdue him and bring him back to the city to return him to the father.
As the group arrive back into the city the magic user has decided that the son is of some mystical value and does not want to return the son to the father until he can determine exactly what the son's role is in the evil plot the magic user has imagined.
When the father arrives to collect his son the Paladin refuses to turn over the son because the magic user in his group has expressed reservations on releasing the son (the son is struck with insanity at this point and cannot be spoken to - he is just a zombie like person once they subdued him and sprung him from the kuo-Toans).
When the father asked the Paladin to give his son in return for the agreed upon treasure (which the father offered to the Paladin) the Paladin refused. Paladin tried to be elusive but the father called him out and said-
"You are being dishonorable - we had a deal. I offered you treasure on the return of my son. Here is the treasure but you will not release my son. That is kidnapping! Please give my son to me!"
Regardless of the pleading the Paladin refused to turn over the son even though he did NOT detect any evil OR that the father was lying to him. He upheld the magic users reluctance based upon only what the magic user in his party said.
My question - How much of an infraction of the Paladin code was his refusal to return a son to his father when all aspects of the deal were being fulfilled?
I am inclined to make the Paladin play without his Paladin powers until he atones for his actions. In my story the next big event is rescuing a lost Paladin so I thought it was perfect that he would have to do this part of the adventure as a plain-jane fighter until he rescued the Paladin.