All the enemies are dead except the boss who says he surrenders, what do you do?

[Quertus]

No witnesses is not stated in the scenario - merely that all the bandits were dead. Have a few possibilities (this is not exhaustive):
1) People don't exist in a vacuum, not even bandits. Are you going to consider that little 7 year old orphan some of the bandits took in, who's done nothing more than cook and clean for the only folks who ever cared for her, a "bandit" and kill her?
2) The bandits may have had some number of prisoners of their own; perhaps a noble they were planning on ransoming off. Are you going to silence him with the sword?
3) Folks engage in trade, even bandits. It's entirely possible there's a merchant in earshot of the fight who hears the declaration of surrender, followed by a gurgle, but is far enough away that you can't see or hear him in the din of combat.

Even without a non-stated witness, though, such things spread. Have a few possibilities (also not exhaustive):
1) It's stated that there's a paladin in the party. Even if he doesn't specifically act against the action, how certain are you that he's not going to mention events that don't necessarily sit well with him to others?
2) You loot the bodies and sell the gear, right? For anyone who knows the bandit boss well enough to know he'd surrender in a losing fight, it's not hard to piece together what happened on seeing anything recognizably his in a shop. A few subtle questions to the shopkeeper on where the gear came from, and you're fingered.
3) Patterns of behavior still tell. If you never have prisoners, people will figure out you don't take them soon enough.

As bandits are usually a low-level adventure, none of the above examples require magic. With magic involved, have some more (again, not exhaustive):
1) You could also have a necromancer that decides to raise them as a templated undead, and finds out that way.
2) There could be a druid who owes the bandit boss a favor, and reincarnates him.
3) The bandit boss might rise as a restless spirit because he wasn't given a chance to reform after he'd seen the light and come to the realization that good does triumph over evil.

Well played. "No bandits" is not an equivalent statement to "no witnesses".

Mindrape handles many of these (especially the annoying Paladin), as could Diplomacy or Murder. And selling the spoils does not equate to his death, or, if he is dead, that he got an opportunity to surrender.

Quertus wouldn't care who saw him use a shovel. Armus *wants* witnesses that it was the Paladin's idea to take him prisoner. Briq, Datch, and Raymond/Tivek *totally* took him prisoner (what happened to him (a few minutes) after that is not their concern). Illyrian wants witnesses to the execution, just as Pidge wants witnesses to "and this is why you don't mess with Pidge". Witnesses just prove that Anna was out of earshot when the leader's head exploded. Witnesses just increase Eladove's reputation of Mercy to those who deserve it, and terrible vengeance to those who do not. Not that Delock cares, but his reputation is pretty solid, too. Rita would only be concerned if the witnesses were in the AoE.

Various forms of Resurrection (or even Speak with Dead) would be troublesome to the reputation of… Raymond. I don't think anyone else would care (beyond killing him again, this time with balefire).

"They say mercy is the virtue of a great man."
*poke*
"Guess I'm just a good man."
*jab*
"Well, I'm alright."

Nice QUOTE