Not only have I done this in game, but BOTH Paladins were PCs.

I was playing a Paladin of Helm, and the other PC was playing a Paladin of Torm. For clarification, the DM had been playing Torm as a little more Lawful than Good, and Helm as a little more Good than Lawful, and this was reflected in each of our Paladins. This is also in 2E days.

We’d been working on two quests. We were trying to defeat a demon that had been terrorizing the realm, and the Paladin of Torm had sworn to destroy that demon whatever it took. We were also trying to find out what had happened to the souls of an entire small city (about 5000). We knew the souls were being held captive somewhere, and I had sworn an oath to free them to either return to their bodies or to move on to their final resting place. So of COURSE the two are connected…..

We discover the demon is using the souls to power a machine that opens a permanent rift between the Abyss and Toril. Some analysis and scrying, and we determine that the souls will be permanently destroyed if the ritual is completed. We also learn we can banish the demon back to the Abyss by smashing the machine. This seems pretty easy to do as he’s currently distracted by the ritual to open the portal. However, the souls go with him. On the other hand, if we interrupt the ritual by attacking the demon and successfully kill him, then we can figure out how to free the souls (killing him that way would banish him only). However, it’s a tough fight and the odds would definitely be against us (even I put odds at about 30% and I was the most optimistic). We back off to discuss (ritual has about 2 hours to go).

I (of course) want to fight. I’m not going to let the souls be destroyed and I’m not willing to let them be sent to the Abyss. The other Paladin wants to destroy the machine, since that guarantees the safety of Toril. They make an (excellent) speech about how there are unfortunate casualties in war, but sometimes you have to make the hard call and accept that you can’t save everyone (I’m, shortening, and this was back in the early 90s). I respond that even one is too much to sacrifice, and that I’d rather risk the world than give up those souls. They reply that their faith is strong enough to see this through, and I reply that mine is strong enough to stop them…

And we go to war. All abilities are working. We even ask the DM why one of our Gods hasn’t stepped in, and he responds that as far as he can tell we are both in character and following the beliefs of our Gods as he had established at the beginning of the game.

Thanks primarily to lucky dice rolls I ended up winning (and sparing my opponent). We healed up, and attacked the demon. We nearly lost that fight, until one party member finally figured out a clue that we hadn’t been able to understand for a while. A WILLING sacrifice by good characters would destroy the machine and free all souls. So of course both Paladins jump in. Souls are freed, demon is banished… and the two of us materialized in the Abyss. But that’s another story.

And the other Paladin? Did this situation between two PCs lead to future conflict? OF course there was future conflict. After all, I did marry her (22 years this September).