Go to the Wendel Cathedral at Night, where "Inger" will tell you something has been stolen. Talk to her before you leave the screen, and tell her you will find the thief. Your job is to catch the thief. Go to the screen with the Blacksmith and Inn. The thief is near the bottom left of the screen, and is visible between a crate and a rooftop (at night). Talk to him to "catch" him. He will run off again, so you must find him again. Next, head to the General Store (any time seems to be fine), where you will find him on the right side of the room. Talk to him and he will disappear again.