"Let justice be done," they say (and the word is here used in the juridical sense of strict and absolute law),—"let justice be done, though the world should be ruined." And we may well say in reply:—Woe to mankind, woe to every individual, woe to the world, were they doomed to be finally judged according to this rigid justice, and this rigid justice only, by Him who alone has the power and the right to dispense such severe justice unto men, and judge them by its rules. But since such full and inexorable justice belongs to God only, who is incapable of error; and since all human justice is but the temporary delegate of the divine; it should necessarily be mild, indulgent, qualified by circumstances; and should on the principle of equity be as lenient as possible, and be ever mindful of its due limits. And this principle is applicable to the most important as well as the most insignificant relations of life, and is so thoroughly connected with them all that, according as we adopt the one or the other principle of strict and absolute law, or of mild equity, the whole of our conduct, opinions, and views of the world must differ. The power of the state is only a temporary and delegated power, destined to accomplish the ends of divine justice; and this dignity, indeed, is sufficiently exalted, and the responsibility attached to it sufficiently great; but this supreme human justice, unless it disregard its own limits, as well as those of mankind, is not divine justice, nor the immediate authority of God, nor God himself.
Friedrich von Schlegel, The Philosophy of History, Robertson, tr., p. 266.
One of the consistent themes of The Philosophy of History is that the absolute is out of human reach, and that whenever anything human is treated as absolute, this is an expression of the corruption of the Zeitgeist. Thus he says later (p. 461),
In science, the absolute is the abyss which swallows up living truth and leaves behind only the hollow idea and the dead formula. In the political world, the absolute in conduct and speculation is that false spirit of time, opposed to all good and the fulness of divine truth, which in a great measure rules the world, and may entirely rule it, and lead it forever to its final ruin. As errors would not be dangerous or deceptive, and would have little effect, unless they contained a portion or appearance of truth, this false spirit of time, which successively assumes all forms of destruction since it has abandoned the path of eternal truth, consists in this: it withdraws particular facts from their historical connexion, and holds them up as the centre and term of a system, without any limitation, and without any regard to historical circumstances. The true foundation, and the right term of things, in the history of society as in the lives of individuals, cannot be thus severed from their historical connexion and their place in the natural order of events.
Thus in the original quotation, Schlegel is concerned with the tendency in classical Roman civilization to treat law as a kind of absolute. This creates what Schlegel calls a 'political idolatry', which in the long run debases a people, which serves as an excuse for endless series of abuses, and which (connected with both of these) teaches people to ignore the true value of the human beings around them. The principle of equity, of course, is that while law must be upheld, circumstances must be taken into account, and that the letter of the law should not be pursued to the extent of killing the spirit of the law.