All perfect praise be to Allah, The Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad is His slave and Messenger.
It is assumed that the religion and faith of the Muslim should lead them to have good traits and a good moral conduct. It is for this reason that the Prophet likened the Muslim to a date-palm tree, as in the hadeeth which was narrated by ‘Abdullah ibn ‘Umar, may Allah be pleased with him, who related that the Prophet said, “Amongst the trees, there is a tree whose leaves do not fall, and it is like a Muslim. Tell me which tree it is.” ... They (the Companions) asked, “O Messenger of Allah, tell us what tree it is.” He replied, “It is the date-palm tree.” [Al-Bukhaari and Muslim]
An-Nawawi said:
“The scholars said: He likened the date-palm tree to a Muslim because of the abundance of its goodness and its constant shade, and because its fruits are good and their presence is constant because people eat the dates as soon as they appear and keep doing so until even after they have become dry; similarly, a believer is all good because of his abundant acts of obedience, his noble morals, his regular performance of the prayer and fasting, his recitation of the Quran, mention of Allah, giving charity, keeping ties with kinship, and all other acts of obedience.”
However, it can happen that a Muslim may have qualities that are contrary to these.
On the other hand, the disbelief of a non-Muslim may lead him to commit major sins, such as fornication and adultery, drinking alcohol, consuming people’s money without a right, as there is nothing to deter him, but this does not negate that some non-Muslims may have good qualities.
This is supported by the hadeeth of 'Aa'ishah, may Allah be pleased with her, as she said, “I said, ‘O Messenger of Allah, Ibn Jud'aan used to maintain ties of kinship and feed the poor in Jaahiliyyah (pre-Islamic time). Will that be of any avail to him?’ He said, ‘It will be of no avail to him as he never said, ‘O my Lord, forgive my sins on the Day of Judgment.’’” [Muslim]
It is not permissible to issue a general ruling saying that non-Muslims are righteous because the basis of righteousness is faith. As for mere praise of a non-Muslim for his good morals, then there is nothing wrong in it. In the version of the above-mentioned hadeeth narrated by Imaam Ahmad in his Musnad, ‘Aa’ishah, may Allah be pleased with her, said, “I praised him (i.e. Ibn Jud'aan).” However, the Prophet did not rebuke her for that; rather, he clarified to her that what Ibn Jud'aan did of good deeds will not benefit him on the Day of Judgment because he died as a disbeliever.
Therefore, a person who attributes good conduct and noble deeds to Muslims or attributes what is contrary to those who disbelieve in Allah is not blamed, and this is not to be judged as strange. It is appropriate that good is attributed to good people and evil is attributed to evil people.
Nonetheless, some Muslims may fail to have the traits and conduct of the people of Islam and may have the qualities of disbelievers and hypocrites, as is known. It is also possible that some non-Muslims shun indecent behavior and are honest in dealing, for example, and fulfill their promise and are keen on having good virtuous morals.
Hence, you should know that what your father said is acceptable and that what you did in considering him to be wrong is neither Kufr (disbelief) nor a sin, because you were neither pleased with the Kufr of the disbeliever nor did you praise him for what does not deserve praise in him.
Allah knows best.