Situational irony is when something happens that is the direct opposite of what is expected to happen, a common literary device often employed by O. Henry to play with shifting perceptions around expectations and reality. It is expected that Jimmy will show up on time, because Bob describes Jimmy as being the truest man ever. It is satisfying that Jimmy does, indeed, show up, and enjoys a happy reunion with his friend. However, the man Bob had a happy interaction with is not Jimmy but is in fact the very entity that he has spent the better part of 20 years running from: the law. And yet the irony still doesn’t end there, as it turns out Jimmy did indeed show up for the reunion, he just didn’t reveal himself until the very end as the police officer who had been speaking with Bob for most of the story.

Foreshadowing is when writers prepare that narrative for something that will happen later. The intention is that the reader will pick up on the foreshadowing in some way (be it emotional, factual, etc.) and it will affect their experience with the story.