Even if there is a guard on a train the guard is supposed to charge the full first class single in cases such as this and not even take into account the fare already paid so it's not just DOO trains.
That is not what the NRCOC provides though.
To the OP, I believe you have been unfairly treated. Click http://www.nationalrail.co.uk/system/galleries/download/misc/NRCOC.pdf and on http://www.southernrailway.com/download/17308.2/penalty-fare-leaflet-december-2011/
The national rail conditions of carriage are the terms and conditions that cover your journey. I draw your attention to clause 39, which I reproduce in full:
39. Travelling in frst class accommodation with a standard class ticket
If you have a standard class ticket (other than a Season Ticket), no standard class accommodation is available, and ticket staff on that train give their permission, then you may travel in frst class accommodation (or the equivalent) where this is available without extra charge.
On-train ticket staff will not give you permission to use frst class accommodation (or the equivalent) unless they are satisfed that it is not required by anyone with a frst class ticket and the standard class accommodation on the train is full. This permission may be withdrawn if a person holding a frst class ticket requires the accommodation during your journey or standard class accommodation becomes available.
If you have a standard class ticket and you travel in frst class accommodation without permission (which includes occupying seats or standing in any part of the carriage), you will have to pay:
(a) the difference between the price of that ticket and the price of the frst class ticket for the accommodation you have used; or
(b) where Condition 4 (b) applies, a Penalty Fare.
If you have a standard class Season Ticket, you may only travel in frst class accommodation (which includes occupying seats or standing in any part of the carriage) if:
(a) the difference between the full single fare for frst class accommodation and the full single fare for standard class accommodation has been paid before your journey starts;
(b) any other relevant supplement set out in the notices and other publications of the Train Companies has been paid before your journey starts;
(c) notices are displayed allowing passengers with standard class tickets to use frst class accommodation; or
(d) on-train ticket staff have given you permission.
In all other cases, if you travel in frst class accommodation (or the equivalent)
with a standard class Season Ticket, you will be treated as having joined the train without a valid ticket, and the relevant parts of Condition 2 or 4 will apply.
Your hope lies in a few little words. Season ticket holders are told "If you have a standard class Season Ticket, you may only travel in frst class accommodation (which includes occupying seats or standing in any part of the carriage) if:
(a) the difference between the full single fare for frst class accommodation and the full single fare for standard class accommodation has been paid before your journey starts..." Before your journey starts, so at the ticket office.
People with normal return tickets are told "If you have a standard class ticket and you travel in frst class accommodation without permission (which includes occupying seats or standing in any part of the carriage), you will have to pay:
(a) the difference between the price of that ticket and the price of the frst class ticket for the accommodation you have used; or
(b) where Condition 4 (b) applies, a Penalty Fare." We'll ignore 39b for now. The first bit says you "will have to pay theh difference" - not "must pay the difference before your journey" but "will have to pay" implying during your journey when the guard comes round.
39a and 39b are joined by the word "or" - this suggests that one or the other applies. In consumer law, if there are conflicting terms, "the interpretation most favourable to the consumer will prevail".
_if_ clause 39 had intended to read "in penalty fare areas caluse 4b always applies" then they would have said so. What they have said is "in penalty fare areas paying the difference or a penalty fare either could apply
You also have the points around the guy inviting you to sit down (which is giving permission as I see it), him not letting you part-pay, not giving a PF to the next stop, and the seats being identical to the first class ones.
Please try to think about where exactly this happened, what station I mean.