The following is from the web page Luther, Exposing the Myth, under the heading "On Lying":
Christ taught: “You are of your father the devil: and the desires of your father you will do. He was a murderer from the beginning: and he stood not in the truth, because truth is not in him. When he speaks a lie, he speaks of his own: for he is a liar, and the father thereof” [John 8:44]...Luther teaches: “To lie in a case of necessity or for convenience or in excuse – such lying would not be against God; He was ready to take such lies on Himself” (Lenz: Briefwechsel, Vol. 1. Pg. 375.)
Luther Exposing the Myth says their stated purpose is to show that "from Luther’s own words we shall see him for what he really was, that is a rebellious apostate, who abandoned the faith and led many into apostasy from God under the guise of “reformation” in order to follow his perverse inclinations." With this quote, they attempt to show Luther taught contrarily to Jesus on lying. This has been a popular charge against Luther for centuries- that he blatantly taught lying was an acceptable practice.
Luther, Exposing the Myth cites "Lenz: Briefwechsel, Vol. 1. Pg. 375." Lenz refers to German historian Max Lenz. Lenz edited the correspondence and documents related to Philip I, Landgrave of Hesse. "Briefwechsel" refers to correspondence, so this particular reference appears to be to his work, Briefwechsel des Landgrafen Philipp mit Bucer. Vol. I. Leipzig. 1880. This volume covers materials from February 1540 to February 1546 from Phillip of Hesse. Here is page 375 which documents material from the a protocol to the Eisenach Conference, July 17, 1540. The quote therefore is not specifically to one of Luther's writings. It is actually from documentation of what was said at this meeting.
The chances that Luther, Exposing the Myth actually used Lenz as the source for this quote are slim. If this source was used, the quote was mined out of a writing from an out-of-print book from something written in German and then translated into English. As with other quotes used by this webpage, it was probably taken from Peter Wiener's Martin Luther, Hitler's Spiritual Ancestor, page 41. Wiener probably took the quote from Hartmann Grisar, Martin Luther, His Life and His Work (Maryland: Newman Press, 1930), p. 522 or Grisar's Luther IV page 51. Wiener uses two quotes in the same order and documentation as that presented by Grisar (and also Luther, Exposing the Myth does the same). So, the ultimate source for this quote is in this form is probably Grisar. As I've looked into this quote, it appears that Grisar is the primary source for the English translation, and perhaps the only source for the English translation in its multiple uses on contemporary Internet webpages. Denifle provides the following, typical of Roman polemicists in regard to the context:
On July 17, the Reformer went to still worse lengths. There is much that is right before God, he said, which before the world must be suppressed. Were one to acknowledge all that is right before God, not right before the world, that is the devil's work. That the Landgrave cannot compass some stout lies, it matters not. There is a maiden here concerned. He would lose land and people, were he to attempt to stick to his decision. "A lie of necessity, a lie of utility, a helping lie — to bring about such lies were not against God; he would take them upon himself." They had granted a dispensation to the Landgrave, because it was a case of necessity. He and his associates "give the advice and suffer him to retain the maiden secretly and on denial or "he should bear no burden in telling a lie on account of the girl for the sake of the advantage to Christendom and all the world."A curious thing about this quote (and another covered previously) is that one would think the context for such a popular quote would be easy to track down. That is, a context would be readily available. But it isn't. The reason is probably due to the complexity of the primary source. the source appears to be the account of a meeting, not a specific writing. Moreover, it's usually the case that Internet polemicists don't really care what a context says anyhow. That has been my finding, particularly with Roman Catholic polemicists.
If you've got a Luther biography, chances are a treatment of the incident of Philip's bigamy is included. As it stands though in English, the most thorough historical thorough treatment of the bigamy of Philip of Hesse incident may be that found in Grisar's Luther IV (and this would be a Roman Catholic evaluation). It begins on page 13 and stretches to page 79. The strength of Grisar's treatment is his attention to detail. I've discussed the historical context of this incident before, and I've done a number of entries on Luther and polygamy or bigamy. To attempt to provide a complete historical response to Grisar would probably wind up being the size of a small book. That being said, Grisar was responded to by his contemporaries:
1) W.H.T. Dau, Luther Examined and Reexamined: A Review of Catholic Criticism and a Plea for Revaluation. Dau almost certainly had Grisar in mind throughout this book. His discussion of this incident begins on page 225 and ends on page 235.
2) Heinrich Boehmer, Luther and the Reformation in the Light of Modern Research (London: G. Bell and Sons, 1930), 213-224. An earlier shorter version of this book is available online, with the discussion beginning on page 227. Boehmer also wrote in light of Grisar's work.
Luther and Lying
The main thrust of Luther, Exposing the Myth with this quote is not bigamy, but rather the aspect of lying. Boehmer tackles this directly:
But even if the reformer was not a falsifier, did he not take up a very equivocal attitude towards the commandment of truthfulness and himself transgress this commandment in the most reprehensible way? It is true, indeed, that he did not scruple to declare Nutzlügen, expedient or beneficial lies, as theoretically permissible, and in one' famous case even advocated such a white lie. These are facts which are beyond doubt, but let us once more listen to the accused before indulging in the exquisite pleasure of outraged morality. Luther defines as "Nutzlügen" those lies which are told for the advantage and happiness of another, such as the lie of the Egyptian midwives in favour of the Hebrew male children whom they were ordered by Pharaoh to throw into the Nile (Exodus 1. 18, 19). Certain early Christian theologians such as Hilarius, Chrysostomn, Cassian, also declared such beneficial lies to be, morally blameless. Augustine, however, stamped them as sinful, and he was followed by St. Thomas and the whole Thomist school; still they regarded this kind of lie as a venial sin, and on the other hand held the clever concealment of the truth (dissimulatio) to be permissible. Other theologians were of opinion that in certain circumstances it might be a greater sin to speak the truth than to be guilty of a Nutzlüge. For it is only the harmful lie which God unconditionally forbids (mendacium adversus proximum prohibet), the beneficial lie He only restricts (pro proximo cohibet). Luther adopted the latter view, but in many respects, while choosing almost the same examples as illustrations went along lines of his own. He found that the Holy Fathers in the Bible had occasionally made use of the Nutzlüge without their conduct receiving blame on that account from the authors of the Holy Scriptures; indeed it seemed to him that St. Paul, Christ and God did not always say exactly what they meant. This to him was sufficient to prove the permissibility not only of the ordinary lie of necessity, but also of the expedient lie to the benefit and advantage of one's neighbor. This method of proof will not be countenanced by any Protestant today. But that does not prove that Luther was wrong in, his view of the question itself As far as the question itself' is concerned, most ethical writers think exactly as he does, with the exception of a few rigorists. And even those rigorists often find their principles very hard pressing among the minor and major emergencies of life...[Boehmer (1930), 211-212].While not a primary source, Preserved Smith includes a Table Talk entry on what Luther is purported to have stated about lies:
33. CONCERNING LIESThis statement finds some verification in the transcripts of Luther's Genesis Commentary. In regard to Genesis 12:3, Luther is said to have stated:
Lies are of four kinds: First the sportive lie, a hearty, ludicrous jest, which affords amusement or cheers up those who are depressed. Second the charitable lie, a good useful lie, which springs from the desire to help our kindred or our friends, as for example, that of Abraham, when he said that his wife Sarah was his sister, or of Michal, when she saved David, or of Elisha, when he said to the Syrians: 'This is not the way, nor is this the city.' The third kind is the noxious lie, which seeks to deceive and injure, according to the way of the world. The fourth is the irreverent lie, by which God is blasphemed. The first two are praiseworthy, since they do no harm; the last two are intolerable, since they offend both man and God. There is also another kind, namely, the necessary lie, although it does not differ much from the second kind, the charitable; and this may be resorted to without fault, if it is not accompanied by an oath such as 'really,' 'truly,' 'by God,' or the like." "A liar is far worse than a murderer and does more harm, because he deceives, while the murderer is unable to deceive. Judas, however, was both a liar and a murderer, like his father the devil." "It is a marvel that when Judas was eating at table with Christ and the disciples he should not have blushed with shame,when Christ said 'One of you shall betray me.' The other disciples had not the slightest suspicion that Judas was about to betray Christ; each one feared indeed that he himself would be the traitor rather than Judas, to whom Christ had entrusted the purse and the whole business management, on account of which he was held in the highest esteem among the apostles."
Thus this passage has given rise not only to many questions but also to a variety of offenses; for Abraham values his own life more highly than the chastity of his wife and the welfare of others. We shall first speak about lying, concerning which Jerome and Augustine engage in an argument. Augustine assumes three kinds of lies: the playful, the obliging, and the deadly. Playful lies he calls those of poets or of actors on the stage. We know that they are lying when they represent something as actually having been done; yet the lie does no harm and is even pleasing, because it entertains and provokes laughter. This, therefore, can be termed a literary sin. The second kind of lie is the obliging one, when we lie for the sake of someone’s good, as Michal lies when she says (1 Sam. 19:17) that David had threatened her with death. Augustine relates the example of a certain bishop who was unwilling to betray someone who had taken refuge with him. Such is the lie of Hushai the Archite (2 Sam. 15:34) and that of the woman at the well of רֹגֶל (2 Sam. 17:20). This lie is called “obliging” because it not only serves the advantage of someone else, who would otherwise suffer harm or violence, but also prevents a sin. Therefore it is not proper to call it a lie; for it is rather a virtue and outstanding prudence, by which both the fury of Satan is hindered and the honor, life, and advantages of others are served. For this reason it can be called pious concern for the brethren, or, in Paul’s language, zeal for piety. Strictly defined, it is a lie when our neighbor is deceived by us to his ruin and our own advantage. Out of respect for the fathers I am keeping this distinction, even though it is not precise enough[Luther, M. (1999, c1960). Vol. 2: Luther's works, vol. 2 : Lectures on Genesis: Chapters 6-14 (J. J. Pelikan, H. C. Oswald and H. T. Lehmann, Ed.). Luther's Works (2:291). Saint Louis: Concordia Publishing House].
When Luther's actual views on lying are fleshed out a bit, it becomes apparent how a simple context-less quote can mean something more than it intends. Luther did not believe that lying in all its various forms was allowable. As a trained medieval theologian, he made crucial distinctions.
The question as I see it in regard to the historical context of the quote is if the situation was such that a lie of necessity was prudent and acceptable. That's a different question. In the end, Luther was to find out that Philip was not entirely honest about his extra-marital activities and said that had he knew beforehand, he would never have given Philip permission to take a second wife. Even after the entire situation was exposed, more controversy followed as supporters of Philip published treatises defending his polygamy. Luther immediately began writing against this, writing things like, "Anyone following this fellow and his book and takes more than one wife, and thinks that this is right, the devil will prepare for him a bath in the depths of hell. Amen" (Martin Brecht, Martin Luther the Preservation of the Church Vol. 3 1532-1546 , p. 214). This writing was stopped for publication for political reasons. Brecht concludes that in the end Luther realized giving confessional advise to Philip was one of the worst mistakes he made (p. 214).