This is from the " Sed Contra… " section of the Summa Theologiae, Part 1, ques 87, ans 2
On the contrary, Habits like powers are the principles of acts. But as is said (De Anima ii, 4), “acts and operations are logically prior to powers.” Therefore in the same way they are prior to habits; and thus habits, like the powers, are known by their acts.
Basically it means that ones habits or dispositions are known or can be perceived through ones actions. For example, the habit of drunkeness is known to exist if one is always drinking ( alcohol ).
The phrase also happens to be the title of several books on human psychologhy by that name.
In addition to the excellent explanation of Linus above, Thomas also uses the principle of knowledge of habit through acts to develop his distinction between acquired (or natural) and infused virtue. Acquired virtues are those habits we can develop by our own powers. But nothing we can do by our own power can merit grace or eternal life. And so God infuses grace, in some or in those he choses, grace into certain habits so that they become meritorious.
In his treatise on Virtue, Thomas considers the objection that there is no difference in species between acquried and infused habits, since all habits are known by their acts. If that is the case, then acts flowing from acquired virtue (not virtue properly speaking) will look the same as virtue infused immediately by God. For example, someone can, by their own efforts, courageously rush into a burning building to rescue a child. But this effort of a person cannot, in itself, be meritorious of heaven (otherwise, we would be committed to Pelagianism). God can “add grace” to the same act to make it meritorious (in other words, infuse a natural act of virtue to make it an infused act of virtue).
Thomas distinguishes aquired and infused virtue not simply by their acts (or matter) but by their form (which, in the case of infused virtues is the love of God).
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