Quick historical note: A coup de grace was considered an honourable and merciful way of despatching a mortally wounded enemy (bearing in mind most bad wounds could easily turn septic). It was only done to those that you respected. Common soldiers were normally left to bleed out on the ground/die of sepsis, as were those enemies you did not respect.
Using a CdG against a sleeping creature is not a merciful act - it's murder. Probably justifiable as self defence (in a medieval court - not a modern one!) under our circumstances. Not that anyone's going to find out, right?

Sorry, slipped into character for a minute...
Re: beating, killing and torturing...
Am not convinced that it is "evil" per se. Not good, certainly, but not convinced it is an evil act unless your character enjoys it, I guess. Paladins and those that hold themselves to a high moral ideal (some clerics, for example) should be the only ones avoiding it outright. Such interrogations were pretty standard in the European Middle Ages.
Now, there was no alignment box on doghead's character sheet which I was hoping would mean he doesn't want to straitjacket any of us into playing a certain way (personally I am not a fan of the D&D/PF alignment system). Still, if I had to put an alignment to Bayar he'd be LN, probably hovering near the boundary of LE (certainly closer to it than the LG or NN boundary). He's capable and unsqueamish enough to deal with beatings et al by himself (hell, officially he's the Chancellor's standover man...) while the rest of the party sits outside with some tea and crumpets. And listen to Jan play the lute to drown out the noise.