Objection 1. It would seem that mercy is not a virtue. For the chief part of virtue is choice as the Philosopher states (Ethic. ii, 5). Now choice is "the desire of what has been already counselled" (Ethic. iii, 2). Therefore whatever hinders counsel cannot be called a virtue. But mercy hinders counsel, according to the saying of Sallust (Catilin.): "All those that take counsel about matters of doubt, should be free from... anger... and mercy, because the mind does not easily see aright, when these things stand in the way." Therefore mercy is not a virtue.
Objection 2. Further, nothing contrary to virtue is praiseworthy. But nemesis is contrary to mercy, as the Philosopher states (Rhet. ii, 9), and yet it is a praiseworthy passion (Rhet. ii, 9). Therefore mercy is not a virtue.
Objection 3. Further, joy and peace are not special virtues, because they result from charity, as stated above (28, 4; 29, 4). Now mercy, also, results from charity; for it is out of charity that we weep with them that weep, as we rejoice with them that rejoice. Therefore mercy is not a special virtue.
Objection 4. Further, since mercy belongs to the appetitive power, it is not an intellectual virtue, and, since it has not God for its object, neither is it a theological virtue. Moreover it is not a moral virtue, because neither is it about operations, for this belongs to justice; nor is it about passions, since it is not reduced to one of the twelve means mentioned by the Philosopher (Ethic. ii, 7). Therefore mercy is not a virtue.
On the contrary, Augustine says (De Civ. Dei ix, 5): "Cicero in praising Caesar expresses himself much better and in a fashion at once more humane and more in accordance with religious feeling, when he says: 'Of all thy virtues none is more marvelous or more graceful than thy mercy.'" Therefore mercy is a virtue.
I answer that, Mercy signifies grief for another's distress. Now this grief may denote, in one way, a movement of the sensitive appetite, in which case mercy is not a virtue but a passion; whereas, in another way, it may denote a movement of the intellective appetite, in as much as one person's evil is displeasing to another. This movement may be ruled in accordance with reason, and in accordance with this movement regulated by reason, the movement of the lower appetite may be regulated. Hence Augustine says (De Civ. Dei ix, 5) that "this movement of the mind" (viz. mercy) "obeys the reason, when mercy is vouchsafed in such a way that justice is safeguarded, whether we give to the needy or forgive the repentant." And since it is essential to human virtue that the movements of the soul should be regulated by reason, as was shown above (I-II, 59, A4,5), it follows that mercy is a virtue.
Reply to Objection 1. The words of Sallust are to be understood as applying to the mercy which is a passion unregulated by reason: for thus it impedes the counselling of reason, by making it wander from justice.
Reply to Objection 2. The Philosopher is speaking there of pity and nemesis, considered, both of them, as passions. They are contrary to one another on the part of their respective estimation of another's evils, for which pity grieves, in so far as it esteems someone to suffer undeservedly, whereas nemesis rejoices, in so far as it esteems someone to suffer deservedly, and grieves, if things go well with the undeserving: "both of these are praiseworthy and come from the same disposition of character" (Rhet. ii, 9). Properly speaking, however, it is envy which is opposed to pity, as we shall state further on (36, 3).
Reply to Objection 3. Joy and peace add nothing to the aspect of good which is the object of charity, wherefore they do not require any other virtue besides charity. But mercy regards a certain special aspect, namely the misery of the person pitied.
Reply to Objection 4. Mercy, considered as a virtue, is a moral virtue having relation to the passions, and it is reduced to the mean called nemesis, because "they both proceed from the same character" (Rhet. ii, 9). Now the Philosopher proposes these means not as virtues, but as passions, because, even as passions, they are praiseworthy. Yet nothing prevents them from proceeding from some elective habit, in which case they assume the character of a virtue.
Source: Summa Theologica (New Advent)