When Margaret sees her brother Frederick off at the train station, Thornton happens to pass by and see them from a distance. Since Frederick could be arrested as a mutineer, the Hales have kept his existence secret, meaning that when Thornton sees Frederick with Margaret, he assumes the young man must be Margaret's lover. However, readers know that it's just her brother, creating a moment of dramatic irony.
The very falsehood that stained her, was a proof how blindly she loved another—this dark, slight, elegant, handsome man—while he himself was rough, and stern, and strongly made. He lashed himself into an agony of fierce jealousy.
This quote gives Thornton's perspective—he assumes Margaret has been hiding a secret lover, and her secrecy shows that she really loves this man. The dramatic irony lets readers enjoy some understated humor at Thornton's expense. It's especially funny that Thornton is ragingly jealous of the fact that Margaret appears to prefer Frederick's looks to his own.
The irony also creates darker suspense. Thornton's jealousy makes it clear just how strongly he feels for Margaret, so it's ominous that his false assumption about Frederick's identity will damage Margaret in Thornton's eyes. Readers also must wonder whether Thornton will blow Frederick's cover and end up getting him arrested.
