I have a few questions about battles in Ultima IV involving a mix of both evil and non-evil creatures:

Sometimes I am attacked by evil creatures, but there are non-evil creatures on the battlefield. For example, I just fought a battle with nixies, but there were also seahorses on the battlefield that were also attacking me. I killed the evil creatures and then got my party to flee without attacking the seahorses, but I got a message saying the "battle was lost". So, here are my questions:

If you start a battle with evil creatures (either by attacking or being attacked):
1) is it OK to also kill the non-evil creatures without penalty to virtues?
if not,
2) will fleeing such a battle after killing the evil creatures result in a penalty to valor/sacrifice?

Also, for ships:
3) is there a way to flee a battle when you're on a ship on the battle screen? (other battle screens you can just walk off the edge, but you can't do that on a ship "battlefield")

Thank you!

You can kill non-evil creatures if they first attack you. I'm pretty sure this also works if you attack an evil creature, and then you find that there are non-evil creatures in the midst. No way to flee that I know of. If you figure out a way, let me know!

I don't know, but if the message "BATTLE IS LOST" appears when you flee, then you lost virtue. If it does not appear, then running away did not make you lose virtue.

Also, i believe that you can't lose virtue in dungeon rooms.

(By the way, the NES version simplified this mechanic; all enemies are treated as evil (though initiating combat with an NPC will cost virtue even on NES), you can flee from ship battles (at the cost of Virtue), and the Blink spell will warp you out of the current battle without loss of virtue (but can't be used to teleport outside of battle).)

Thank you, that's good to know! Seems like I was meant to attack everything on the battlefield then.

Note that it may actually grant virtue to flee a non-evil enemy!

Further, note that it grants virtue to allow non-evil enemies to flee the battlefield--you don't have to kill them!

(You can find more-detailed information on how the virtues are calculated on the page linked-to below, I believe:
https://wiki.ultimacodex.com/wiki/Virtues_in_Ultima_IV
)

Ulitma IV is fickle. disarm your charactes and "Punch" them until they flee. And some of these pesky sea horses will bumble around. snakes have been known(on Apple II) to hurl poison at the edge of the screen for long periods and in "flee flag" mode never doing so! In the IBM version(aka DOS box sold here!), usually they will if you flag them to do so by hitting them, but yoiu can kill any creature by hitting it too hard-despite strenght. Mariah in my party had almost no strenth but killed spiders and snakes with just one punch at her beginniing unaltered level. (small chance).. But it is the only way. to get them gone. you don't flee non-evil battles you stand your ground and hit them and make them flee instead. bloodie their noses. you(and any character reguardless of HP will make you "loose an eighth" if you flee any battle for ANY reason!)

What you say is actually incorrect. Fleeing will only make you lose virtue if:
* There's at least one evil enemy present
* The battle is not a dungeon room (you can flee rooms with no karma consequences)

Someone reverse engineered the game, and looking through it, I did notice some things (note that I'm working from memory here):
* Having someone with full health flee will result in a loss of virtue (if not in a dungeon room, and I believe only if fighting something evil)
* Having someone (at least other than the main character; don't remember if the main character is special here) not with full health flee won't result in a loss of virtue unless your whole party runs away (so no issue with having your injured companion flee to safety)
* Letting a non-evil enemy flee will boost virtue (though not Valor, in this case)
* Killing a non-evil enemy, after combat has started, will *not* cause a loss of virtue. In other words ,you don't need to be overly careful to not accidentally kill non-evil enemies.
* On the other hand, if you *start* a battle with a non-evil enemy by using the attack command before combat starts, then you will lose virtue.

So, the answer to some of the original questions:
1: There is no penalty for killing non-evil enemies in self-defense.
(Not sure about 2; I'd have to check.)
3: Not unless you are playing the NES version. (And the NES version is quite different. There's no notion of non-evil enemies, for example.)