In a game where a fush beats a full house , not that there is anything wrong with that, I would expect some allowance for what is a fold and what is not. I would hope that a verbal declaration of "fold" or he or the dealer actually mucking the cards would be what is required. In this case he exposed his hand face up and made NO offical declaration of fold. Also the cards were NOT mucked and were retrievable. Now some places have different takes on this , but most rooms allow the hand to be live. Best hand wins yadda yadda. Home games rules and structures vary a lot , and that's also cool. Does this game/host have a distinct rule on this? If not, get one. This situation can happen again very easily!