Try to find him in the day, its like a warband towns. You know, in the midnight nobody is in the town except the older

Dont know about Warband version but in 1.011 these people were sometimes in weird places. Once found the guy standing deep in a lake.

I also found one deep underwater in a lake lol. When I went down I couldnt see him on screen. Had to come out of the water look where he was roughly then dive down to "Talk"

If it does happen, go at night and make sure cheats are on. Press ctrl + f4 (i think that was the one) and it will knock someone unconcious. That way you will succeed in the quest.