hmm
there is a quest (threads of life) giver there asking to find and speak to restless souls in SS to 'help them move on.'
He sounds like one of the quest givers to convert Cloaks of Corruption into either Cloaks of Life, Cloaks of Death, of Cloaks of Power. There was one quest giver for each type of cloak transformation.
You can still transform a cloak of corruption as long as you have the Threads to do it. There were three types of thread Life, Fate, and Thought. They were obtained from different types of souls, each requireing a different method of retrieval (Spirit Speak, Excorcism, or slaying).
This quest was started sometime after Magincia was destroyed, but before the other towns were being invaded by the armies led by the Crimson Dragons.
Stayin Alive,
BG