This is an expression. To 'fall from grace' means to suffer a loss of respect or prestige. It originated from the Bible:
Galatians 5:4 (King James Version):
Christ is become of no effect unto you, whosoever of you are justified by the law; ye are fallen from grace.
Mr Dollengangar was mocking Mr and Mrs Foxworth's excessive piety by using the expression so gallantly.